Capital spending in most ministries remains below 30 percent as fiscal year enters final stretch

Capital expenditure across several ministries in Nepal remains critically low, with less than a month and a half remaining in the fiscal year 2025-26. The government has spent only 30.72 percent of its total capital budget of Rs407.88 billion, totaling Rs124.61 billion. This figure is notably lower than the 37.72 percent spent by the same time in the previous fiscal year.

Most ministries have failed to utilize even 30 percent of their allocated capital budgets. The Ministry of Federal Affairs and General Administration (now merged) is the worst performer, having spent just 3.163 percent of its Rs756.2 million allocation. Officials attribute this low figure partly to accounting delays, with Rs660 million from development partners, intended for local levels, not yet reflected in the system. Additionally, the construction of the National Personnel Record building has stalled due to unresolved land issues.

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A significant portion was frozen at the start of the year. Even though funds were later released, procurement processes alone are taking up the remaining time.

The Ministry of Culture, Tourism and Civil Aviation is another significant under-performer, having utilized only 7.421 percent of its Rs4.8462 billion capital budget. Ministry spokesperson Jayanarayan Acharya explained that a substantial portion of the budget was frozen following the Gen Z movement and remained so until after the elections. Despite its eventual release, he stated that procurement processes alone consume the remaining time, with most projects only reaching the contract stage within the fiscal year.

Other ministries with low spending include Youth and Sports (11.5 percent), Industry, Commerce and Supplies (11.25 percent), Labour, Employment and Social Security (11.96 percent), Information and Communication (14.51 percent), and Agriculture, Forests and Environment (16.33 percent). The Ministry of Urban Development (now Infrastructure Development) has spent 21.4 percent of its Rs72.84 billion budget. Officials blamed budget freezes and delays in financial authority for this weak performance, noting that Rs62 billion was frozen and only Rs24 billion released in February and March.

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The Rs62 billion budget was frozen, and only Rs24 billion was released in February and March.