Capital spending meagre in first five weeks

Kathmandu, Aug. 23

The challenge to spend capital budget is likely to persist in the current fiscal year 2022/23 as well, as indicated by first five-week figures of the Financial Comptroller General Office (FCGO).

Although the current budget was announced about six weeks before the beginning of the new fiscal year as per the constitutional provision, only 0.47 per cent of Rs. 380.38 billion allocated capital has been used up so far. It means only Rs. 1.79 billion is mobilised.

However, this is a slight improvement compared to the last fiscal year 2021/22 when the government had spent Rs. 1.07 billion – 0.29 per cent – of Rs. 378.09 billion development budget. Last year, only 57.18 per cent of the total capital allocation despite the Minister of Finance Janardan Sharma's promise to spend about 10 per cent of the total allocation each month since October last year.

That achievement was also made with a massive spending of Rs. 37 billion in the last week of the year which is against the budgetary and spending norms.

Meanwhile, achievements in the mobilisation of total budget have stood at 1.5 per cent, Rs. 26.82 billion. The size of budget for the current fiscal is Rs. 1793.83 billion.

However, this progress is backed by a good progress in financing – the budget for government investment and debt servicing – with about Rs. 15.11 billion spending of the total allocation of Rs. 230.21 billion. Only about 0.84 per cent (Rs. 9.91 billion) recurrent budget is used up so far.

Last year's budget size was Rs. 1632.82 billion. But there was a confusion about budget execution since the KP Sharma Oli-led government collapsed after announcing the budget and the succeeding government led by Sher Bahadur Deuba sought some amendments in it.

About two months of the fiscal were wasted in the process which badly affected the development works and budget mobilisation. But the government had collected more than 8.5 per cent revenue of the total target in the first five weeks of the year.

Nevertheless, despite more comfortable situation this year couldn't witness positive impacts on fund mobilisation.

Meanwhile, there has been 6.28 per cent progress in revenue mobilisation. The government has collected Rs. 88.07 billion revenue for Rs. 1403.14 billion annual target. Of the total collection, Rs. 78.15 billion is tax revenue and Rs. 9.91 billion is non-tax revenue. The government has received Rs. 790 million in grants during the period. 

Published in The Rising Nepal daily on 24 August 2022.