Government Revenue and Spending Remain Weak in First Five Months, Capital Expenditure Below 10%

Kathmandu — As the first five months of the current fiscal year draw to a close, both government revenue collection and expenditure have remained disappointing. By mid-December (Mangsir-end), the government has failed to collect even 30 percent of its annual revenue target, while total expenditure has been limited to around 28 percent.

According to data published by the Office of the Financial Comptroller General under the Ministry of Finance, capital expenditure has been particularly weak. From mid-July to mid-December, development spending stood at just 8 percent of the annual allocation, highlighting the sluggish pace of infrastructure and development activities.

The data shows that the government has collected around 27 percent of its total revenue target over the past five months. Total revenue collection during the period amounted to Rs 414 billion. For the current fiscal year, the government has set a target of generating Rs 1.533 trillion from tax and non-tax sources.

In contrast, government expenditure has significantly outpaced revenue. While revenue stood at Rs 414 billion, total spending reached Rs 564 billion during the same period, widening the fiscal gap.

A closer look at spending patterns reveals that recurrent (administrative) expenditure accounted for Rs 398 billion, whereas capital expenditure amounted to only Rs 33.87 billion. Although the government had set a capital expenditure target of Rs 407 billion for the fiscal year, spending by mid-December has failed to reach even 10 percent of the allocated budget, raising concerns about delayed development projects.

During the same period, the government mobilized Rs 132 billion through financial management, which represents about 35 percent of the annual target of Rs 375 billion.

Economists attribute the weak spending performance partly to political developments. Following the Gen-Z-led protests on September 9 and 10, the newly formed government has prioritized holding elections scheduled for March 4 (Falgun 21). The need to finance election-related expenses from domestic sources has reportedly led to cuts in small and fragmented development projects, further affecting capital expenditure.

Analysts warn that weak revenue collection combined with slow capital spending could dampen economic activity and delay recovery. They stress the need for faster budget execution, improved project readiness, and a broader revenue base to support economic momentum in the remaining months of the fiscal year.