Year-End Spending Surge Pushes Government Budget Execution to 80 Percent, but Capital Expenditure Remains Weak

Kathmandu: The government’s budget implementation has once again followed the familiar pattern of slow spending throughout the year and a sharp rise in expenditure during the final month. As the fiscal year approached its closing deadline, the government released billions of rupees within days, pushing overall budget utilization closer to 80 percent while development spending continued to lag.

According to the Office of the Financial Comptroller General, the government spent Rs 33.16 billion on a single day before the regular payment system was closed. The large payment release came just ahead of the legal deadline that requires government transactions to be halted one week before the end of the fiscal year.

The one-day expenditure included Rs 12.42 billion under recurrent expenditure, Rs 18.39 billion under capital expenditure, and Rs 2.35 billion under financial management. The sudden release of funds highlights the continued dependence of government agencies on last-minute spending to utilize allocated budgets.

For the current fiscal year, the government had announced a total budget of Rs 1.964 trillion. By Ashadh 25, total expenditure had reached Rs 1.565 trillion, meaning only 79.69 percent of the allocated budget had been utilized.

The biggest concern remains the performance of capital expenditure, which directly affects infrastructure development, employment generation, and economic growth. Out of the Rs 407.88 billion allocated for capital spending, only Rs 181.56 billion has been utilized, representing just 44.51 percent execution.

Despite remaining weak for most of the year, capital spending increased significantly in Ashadh. By the end of Jestha, capital expenditure stood at Rs 132.66 billion, but an additional nearly Rs 49 billion was spent in the final month alone. This indicates that many government projects accelerated payments only near the end of the fiscal year rather than maintaining consistent implementation throughout the year.

In contrast, recurrent expenditure showed relatively stronger performance. The government spent Rs 1.042 trillion out of the allocated Rs 1.180 trillion under this heading, achieving 88.3 percent utilization. Spending related to salaries, administration, and regular government operations continued at a higher pace compared to development activities.

Similarly, expenditure under financial management reached Rs 340.72 billion against an allocation of Rs 375.24 billion, representing more than 90 percent utilization. A major portion of this category includes debt servicing and financial obligations of the government.

The government spent more than Rs 218 billion in Ashadh alone, significantly improving the annual expenditure ratio. Budget utilization increased from 69.56 percent at the end of Jestha to nearly 80 percent by the end of the fiscal year.

Economists have repeatedly pointed out that heavy concentration of spending in the final month reduces the effectiveness and quality of public expenditure. Late payments often create challenges in project monitoring, construction quality, and efficient use of public resources.

The government introduced a provision to stop regular payments seven days before the fiscal year closes to reduce year-end spending pressure and improve financial discipline. However, the continued trend of delayed project implementation followed by accelerated spending at the end of the year shows that improving budget execution remains a major challenge.

The data suggests that Nepal’s public finance problem is not only about the availability of budget resources but also about the capacity to implement projects on time. Improving project planning, procurement processes, and monitoring mechanisms will be crucial to ensure that development expenditure contributes effectively to economic growth.