Govt Demonstrates Poor Capital Spending; Only One-third of Capital Expenditure (CAPEX) Utilized for the 10-Months of FY 2079/80

In the 10 months of ongoing fiscal year 2079/80, the government is able to utilize only 33.04% capital budget expenditure out of the targeted capital budget of 1-year.

Capital expenditure is the money spent by the government on the development of physical assets. In Nepal, the capital budget is met by balancing domestic revenue after meeting the recurrent budget, grants, and loans.  Looking at the details from Financial Comptroller General Office's (FCGO), it seems that only Rs 1.25 Kharba of the capital budget has been spent from the targeted budget of Rs. 3.80 Kharba.

The government is always seen accelerating the costs under capital expenditure at the last minute, and looks like the end of this fiscal year will be no exception to the norm. The modest rate of capital expenditure throughout the review period demonstrates that the government's inability to spend this year. The same is expected to negatively affect employment possibilities, the liquidity of the banking system, and the quality of development projects already in turmoil.

On the other hand, the FCGO has reported tax revenue of Rs. 6.84 Kharba and non-tax revenue of Rs. 71.61 Arba for the 10-months fiscal year-end. A total of Rs. 36.29 Arba in other receipts has been recorded. The record also shows that government has been able to generate only Rs. 7.56 Kharba as total revenue from the targeted budget of Rs. 14.03 Kharba.

The government's entire expenditure for the 10-month period of FY 79/80 is Rs. 10.47 Kharba, which is greater than the total revenue it has received (7.56 Kharba). This shows that the government is unable to meet the expenditure using only tax revenue.

Meanwhile, just 58.79% of the financing amount has been spent. The financing budget is used to repay the government's loan principal and interest, as well as to make investments.