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… in FY 2021-22, 85 percent of the released budget spent 

MB Subba 

The government’s current expenditure exceeded the capital expenditure by almost 2 billion (B) in the fiscal year 2021-22, according to the budget performance report released by the finance ministry.

While the current expenditure amounted to Nu 34.103B, the capital expenditure incurred was Nu 32.366B only.

Current expenditures are the expenses incurred on necessary purchases that keep a business or administration going from day to day, such as rent, utility bills, and office supplies. Capital expenditures are the expenses incurred on long-term investments such as infrastructure development and the purchase of assets.

The government had prioritised capital expenditure over current expenditures and accordingly allocated more capital budget than current.





However, despite the current expenditure exceeding the capital expenditure, the latter increased by about 15.5 percent compared to that of the previous year.

The budget performance report attributes the increase in relaxation of Covid-19 restrictions, which enabled agencies to carry out more capital activities.

During the fiscal year, the government released a total budget of Nu 77.152B, of which the actual expenditure amounted to Nu 71.99B, including domestic lending and repayments of loans.

This means that 85 percent of the total release was utilised during the fiscal year. “The overall expenditure performance shows an improvement of 11.3 percent as compared with the last FY during the same period,” the report states.

However, the government’s expenditure, excluding domestic lending and repayments of loans, was Nu 66.469 billion (B) only.

In the fiscal year 2021-22, the government spent Nu 19.73B, Nu 7.751B and Nu 3.632B on salaries, wages, operations and management, and subsidies and grants, respectively.



The government also transferred Nu 28B as annual grants to local governments, subsidies and equities for State-owned enterprises (SoEs) and grants to other non-budgetary agencies such as Civil Society Organisations. This was 6.61 percent increase from the previous year.

The overall increase in the expenditure was attributed to the rise in the budget allocated as block grants to local governments by 10 percent.

The total resource performance (revenue and grants) decreased by 0.6 percent compared to the previous fiscal year. The expenditure (budget implementation) performance, however, increased by 12.1 percent for the corresponding period.

The increase in expenditure and decrease in the receipts increased the fiscal deficit by 76.9 percent in the fiscal year 2021-22 from the previous fiscal year, according to the report.

During the fiscal year, the government increased the capital budget by 12.42 percent above the initially Parliament-approved budget. This means that the total capital budget was revised to Nu 43B from the initial allocation of Nu 38.32B.

The government wanted to ramp up its spending to offset the impact of the Covid-19 pandemic.



However, the Finance Minister in a recent interview said that the government would be cautious in spending in the wake of the economic crisis in the region. He said, “The government now will not stress too much on GDP growth but correct the fundamental parameters of the economy.”

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