With just a few days left for the conclusion of the current fiscal year, the government has spent only 44.68 percent of the funds allocated for development projects.
The report with the Financial Comptroller General Office (FCGO) shows that the government spent Rs 134.97 billion as of Friday, the last day of the first 11 months of the current fiscal year. The government has earmarked a budget of 302.07 billion under capital expenditure for FY 2023/24.
Every year, the government speeds up its capital expenditure only in the last hours of the FY. By the end of the first half of the current FY, the capital expenditure stood at only 16.3 percent, while in the next five months; the exhaustion of the budget was over 28 percent. The FCGO records show that the government spent Rs 37.6 billion in the past three months, which makes up more than 12 percent of the total allocated budget.
Likewise, government agencies also attempt to exaggerate their spending of the development budget by making last-hour spending rampantly when the end of fiscal year comes nearer. According to the Ministry of Finance, the government carried out cash transfers of Rs 2.40 billion in one month during mid-April and mid-May.
The government’s capital expenditure is crucial for developing economies like Nepal, where inadequate infrastructure poses a major obstacle for both public and private sectors. According to economists, the slow capital expenditure adversely affects the cash flow, which hits the generation of employment opportunities and the targeted economic growth.
Similarly, the government’s revenue collection also appeared pathetic during the review period. The government collected Rs 919.19 billion in revenue against the targeted revenue collection of Rs 1.422 trillion. It makes up just 64.62 percent of the target.
With a slow revenue collection amid the ongoing economic slowdown, the government struggled to manage financial resources to meet its liabilities. The grant amount received by the government was only 5.52 percent against the target of Rs 49.94 billion this year.
According to the FCGO, the recurrent expenditure stood at 67.45 percent of the targeted Rs 1.751 trillion. The government spent Rs 223.50 billion for debt servicing.
