With only two months remaining in the current fiscal year, the government has managed to spend just 34.16 percent of its capital budget, highlighting persistent inefficiencies in development spending. Of the Rs 352.35 billion allocated for capital projects under federal agencies, only Rs 120.37 billion has been utilized as of mid-May (end of Baisakh).
This underperformance echoes last fiscal year’s trend, when only around 37 percent of the capital budget was spent over a ten-month period. In contrast, recurrent and financial management expenditures have been significantly higher. The government spent Rs 773.22 billion on recurrent expenditures—67.79 percent of the allocated amount—and Rs 264.29 billion on financial management, equating to 71.96 percent of the targeted amount, according to data from the Financial Comptroller General Office (FCGO).
Revenue collection has also fallen short of expectations. By mid-May, the government had collected Rs 922.43 billion in total revenue, which is just 64.99 percent of its Rs 1,419.3 billion target for the fiscal year. This includes Rs 828.94 billion from tax revenue and Rs 93.49 billion from non-tax sources. Additionally, Rs 12.69 billion was received in grants, and Rs 11.21 billion from other payments.
In light of the fiscal shortfall, the government reduced its original budget target by 9.01 percent in a mid-term review. The revised total expenditure target now stands at Rs 1,692.7 billion—broken down into Rs 1,029.2 billion for recurrent spending, Rs 299.5 billion for capital expenditure, and Rs 363.93 billion for financial management.
The consistently low capital expenditure underscores ongoing challenges in project execution and fiscal management, especially in critical infrastructure and development sectors. Despite repeated concerns from the private sector and development partners, the government’s inability to improve capital budget utilization continues to hamper economic growth and long-term development.
