Himal Press 
KATHMANDU: With only two months remaining in fiscal year 2025/26, the government has utilized less than a third of its capital budget.
Latest data from the Financial Comptroller General Office (FCGO) reveals that capital expenditure, the primary driver of infrastructure and job creation, reached a dismal 27.9% at the end of 10 months of the current fiscal year, i.e., mid-May.
The government has set the capital spending target at Rs 407.88 billion in the current fiscal year. However, only Rs 113.85 billion has been spent till mid-May. The fiscal year 2025/26 ends in mid-July.
The government’s total expenditure progress stands at 59.75%. Of the total budget allocation of Rs 1,964.11 billion, Rs 1,173.52 billion has been spent in 10 months. Progress in recurrent spending stands at 68.98%, with the government spending Rs 814.65 billion of the allocated Rs 1,180.98 billion. Likewise, progress in financial management spending stands at 65.3%. The government has managed to spend Rs 245.01 billion of the Rs 375.24 billion allocated under the heading in the review period.
Citing slow revenue mobilization and the need to arrange resources for the House of Representatives elections, the government reduced the budget size from Rs 1,964.11 billion to Rs 1,688 billion through the mid-term review of the budget in mid-February. It reduced recurrent expenditure to Rs 1,125 billion, capital expenditure to Rs 243.3 billion, and financial management expenditure to Rs 319.04 billion.
While other expenditure headings look satisfactory, the government fares very poorly in capital spending. Even if the revised spending targets are considered, progress in capital spending is a mere 46.79%.
In the last fiscal year, only 63.47% of the Rs 302 billion allocated for capital expenditure was utilized. Capital spending has averaged just around 60% over the past four years, down significantly from the pre-COVID average of 70% and far below the over-80% spending recorded in 2017/18.
The government also looks certain to miss revenue targets in the current fiscal year. Of the targeted Rs 1,480 billion in 2025/26, the government has raised only Rs 988.55 billion, or 66.79% of the target, in 10 months.
The progress in tax revenue stands at 67.41%, with the government mobilizing Rs 893.56 billion out of the targeted Rs 1,325.558 billion. Similarly, progress in non-tax revenue and grants stand a 61.51% and 33.28%, respectively.
