MB Subba

The country spent Nu 10.6 billion (B) as capital expenditure in the first half of the fiscal year 2021-22, according to the budget performance report for the second quarter of the fiscal year.

This is a little over 25 percent of the total capital budget for the fiscal year, which has been revised to Nu 41.785B.

However, the capital expenditure increased by 55 percent as compared to that of the same period last year, according to the report which is prepared by the Department of National Budget.

Only 16 percent of the capital budget was spent in the first half of the fiscal year 2020-21. The first half of the fiscal year begins on July 31 and ends on December 31.

The report attributes the increase in the expenditure budget performance to the relaxation of the Covid-19 restrictions.




The government, the report states, has pre-financed some of the donor-funded activities where the release has not been received yet from the development partners.

This is an interim measure that the government undertakes to meet the cash requirement indicated by the budgetary agencies in executing donor-funded activities.

Ramping up spending is one of the main strategies of the government to offset the impact of the Covid-19.

An official familiar with the issue said that the low capital expenditure utilisation rate and the fourth lockdown would have adverse impacts on the government’s ability to utilise budgets.

He said that the implementation of activities normally gathers pace in the second quarter and will be in full swing in the third quarter.

“The lockdown will have some impact on the utilisation of the capital budget,” he said.

The expenditure (capital and current), however, stands at 34 percent, which is a slight increase from the same period last year.




The report states that the implementation of capital work is expected to gather pace from the third quarter as the booster dose against Covid-19 has been rolled out.

“Further, with the successful completion of the mid-year review of budget and the Annual Performance Agreements, the budgetary agencies are expected to pick up the implementation of activities to utilize the budget and meet the targets.”

However, the government has not faced many problems when it comes to spending the current budget.

The current budget for the fiscal year was revised to Nu 35.597B, of which the actual expenditure reported at the end of second quarter was Nu 16.475B.

This means that 46 percent of the total current budget was spent as of December 31.




The report also states that some portion of the budget that was released has yet to be utilised. Out of Nu 37.635B that was released during the first half of the fiscal year, Nu 29.787B was spent.

The Ministry of Finance released 44 percent of the total annual budget for the fiscal year in the first half. Similarly, 35 percent of the budget was spent as on December 31.

More than Nu 2.267B was provided to various budgetary agencies for Covid-19 containment measures.

Advertisement