Kathmandu: The Government of Nepal’s expenditure has exceeded its income during the first eight months of the current fiscal year 2024/25. According to data from the Office of the Financial Comptroller General (FCGO), total government spending stood at Rs 839.36 billion, while total revenue collection reached Rs 738.82 billion by March 13. This has resulted in a budget deficit of Rs 153.47 billion during this period.

Capital Expenditure Remains Low at 23%
Despite the high overall spending, the government’s development (capital) expenditure remains notably low. Out of the Rs 352.35 billion allocated under the capital expenditure head, only Rs 82.34 billion, or 23.37%, has been spent so far. This slow utilization of the development budget has raised concerns about delays in infrastructure projects and inefficient project implementation.

Budget Allocation and Spending Breakdown
For the current fiscal year, the government had announced a total budget of Rs 1.860 trillion. Of this, Rs 1.14 trillion was earmarked for recurrent expenditures (day-to-day administration), and Rs 367.28 billion was allocated for financial management, including debt servicing.

As of mid-March:

-51.21% of the recurrent expenditure budget, amounting to Rs 584.13 billion, has been spent.
-47.07% of the financial management budget, or Rs 172.89 billion, has been utilized.
In total, 45.12% of the annual budget has been spent so far.

Revenue Collection at 50% of Annual Target
Revenue collection has reached 50.2% of the government’s annual target. The government set a revenue collection target of Rs 1.471 trillion for FY 2024/25. As of March 13:

-Rs 738.82 billion in total revenue has been collected.
-Of this, Rs 638.79 billion (49.74% of the target) is from tax revenues.
-Rs 81.54 billion (60.36% of the target) has been collected from non-tax revenues.

Weak Foreign Grant Mobilization
The government’s efforts to mobilize foreign grants have also fallen short of expectations. Against a target of Rs 52.32 billion in foreign grants for the fiscal year, only Rs 9.16 billion has been received so far. This accounts for just 17.51% of the annual target.

Concerns Over Fiscal Management and Development Spending
The widening fiscal deficit and underperformance in capital expenditure highlight ongoing challenges in Nepal’s fiscal management. While recurrent and administrative spending continues at a steady pace, slow progress in development spending could undermine infrastructure development and economic growth targets.