JANAKPURDHAM: Capital expenditure in Madhesh Province has failed to gain momentum due to mismanagement within the provincial finance ministry.
Although recurrent expenditure has reached around 9% in the first four months of the fiscal year 2025/26, capital expenditure stands at just 1%.
Officials from other ministries say that development and construction works have been affected as the finance ministry has frozen capital budget allocations. Ram Kumar Khang, Officiating Secretary of the Ministry of Energy, Irrigation and Water Supply, said the primary reason for the extremely slow capital expenditure is the freezing of capital budget entries by the finance ministry for the past three months.
“In previous years, around 20% of the budget would be spent by mid-November. But this year the budget has been frozen, and we have not been able to spend even when we wanted to. Barely 2–3 percent has been spent,” Khang said. “That too went mainly to activities such as deep boring works that were necessary due to drought conditions. After the budget freeze, even those works have come to a halt.”
Sanjay Sah, officiating secretary of the Ministry of Physical Infrastructure Development, said that development works have been severely affected due to the freezing of the capital budget.
Dilip Kumar Thakur, officiating secretary at the Ministry of Education and Culture, expressed dissatisfaction with the finance ministry and refused to comment further.
Finance Secretary Ram Kumar Mahato did not respond to queries of Himal Press about why the budget was frozen. He has been avoiding the issue, saying only that he would respond later.
The online-based Provincial and Local Government Financial Management System (PMLS) should remain operational until five days before the fiscal year-end in mid-July. However, provincial government employees say that the system has been locked, citing budget expenditure guidelines.
In the last fiscal year, the PMLS was opened only in March after prolonged pressure. Ministry secretaries are worried this year as there is still no indication of when it will be open.
According to the Provincial Treasury and Comptroller’s Office, expenditure has remained extremely low across several ministries and subordinate bodies. Several agencies like the Madhesh Provincial Assembly, Office of the Chief Attorney, the Ministry of Home Affairs and Communication, the Ministry of Sports and Social Welfare, and the Provincial Planning Commission have recorded zero capital expenditure.
The provincial government has allocated Rs 16.72 billion for recurrent expenditure for the current fiscal year. of this, only Rs 1.55 billion had been spent by mid-November. In contrast, only Rs 403.59 million, or about 1%, of Rs 30.26 billion allocated for capital expenditure has been spent by mid-November.
