In the final stretch of Fiscal Year (FY) 2024/25, the Government of Nepal disbursed Rs 15.42 billion in development spending within just two weeks, a familiar trend of last-minute fiscal activity. This brings the total capital expenditure to Rs 159.92 billion, accounting for only 45.38 percent of the Rs 352.35 billion allocated for development projects.
For most of the fiscal year, development spending lagged behind. As of the end of 11 months, only 41.01 percent of the capital budget had been utilized. This sudden increase in expenditure at the close of the fiscal year reflects a chronic issue that has long plagued Nepal’s budget implementation: delayed project execution followed by a hurried attempt to meet spending targets.
The phenomenon is not new. In FY 2023/24, the government spent Rs 50 billion—27 percent of the annual capital expenditure—between mid-June and mid-July. In FY 2022/23, 17.28 percent of the development budget was used in the final month alone, with Rs 88.66 billion disbursed in the last week.
Such delays impact public infrastructure and services. “Most roads in the capital are dug up during monsoon season, creating problems for commuters,” said Manju Neupane, a resident of Chabahil, Kathmandu. This poorly timed work not only inconveniences the public but often results in substandard quality due to rushed implementation under adverse weather conditions.
According to Uttar Kumar Khatri, joint-secretary at the Ministry of Finance, year-end spikes in spending are largely due to late payments for completed works and the settlement of pending bills. However, this reactive approach highlights systemic inefficiencies and poor planning in budget execution.
Historically, Nepal has struggled to fully utilize its capital expenditure. Over the past decade, development budget utilization has consistently remained below 70 percent. In FY 2023/24, only about 61 percent of the development budget was spent by year-end.
In total, the government spent Rs 91 billion in the past two weeks alone, including Rs 54.72 billion under recurrent expenditure. This wave of expenditure occurred despite the Financial Procedure and Fiscal Responsibility Act-2020, which prohibits public agencies from making payments in the final week of the fiscal year—a rule that continues to be ignored in practice.
The recurring pattern of last-minute spending raises concerns about fiscal discipline, quality of public works, and accountability in the use of taxpayer funds. It underscores the urgent need for systemic reforms to improve planning, execution, and monitoring of development projects throughout the fiscal year.
