Challenges continue in raising Capital Expenditure

Kathmandu / Jan. 3: The capital expenditure in the five months remained 8.16 per cent of its annual target in the current fiscal year (FY).

According to the Financial Comptroller General Office (FCGO), the capital expenditure remained Rs. 35.8 billion at the end of December 2021 out of the annual target of Rs. 439.6 billion.

Also, the size of capital expenditure recorded in the end of December 2021 is lower in comparison to the same period of the previous FY.

The current FY spending remained 10 per cent lower than the review period of the previous FY.

In the first five months, the capital spending remained Rs. 35.8 billion down from Rs. 40.2 billion was recorded in the same period of the previous FY.

The capital expenditure remained slow despite the Finance Ministry’s clear directive for the spending of a minimum of 10 per cent within the first quarter and at least 10 per cent per month thereafter.

Capital spending remained to be a challenging aspect for the government with regard to the overall mobilization of the annual budget.

It has been gradually declining since the fiscal year of (FY) 2018/19. According to the FCGO data, the capital expenditure in FY 2017/18 recorded Rs. 270.7 billion after which the amount continuously went down. In the FY 2018/19 it fell down to Rs. 241.7 billion and in the FY 2019/20, it further went down to Rs. 189 billion.