Despite total government expenditure reaching Rs 667.60 billion in the first six months of the current fiscal year 2024/25, capital expenditure remained dismally low at just Rs 56.94 billion, according to the Nepal Rastra Bank (NRB).

The ‘Current Macroeconomic and Financial Situation of Nepal’ report, based on data up to mid-January 2025 and published by NRB on Sunday, shows that the bulk of spending went towards recurrent expenses at Rs 452 billion, while financial management for government’s debt servicing stood at Rs 158.66 billion.

In contrast, capital expenditure—which is crucial for infrastructure development and economic growth—accounted for just 8.53% of total government spending in the review period, raising concerns over slow development project execution.

Meanwhile, the total revenue mobilization of the Government of Nepal (including the amount to be transferred to provincial and local governments) stood at Rs 559.61 billion during the review period. The total revenue comprises of tax revenue amounting Rs 489.40 billion and non-tax revenue of Rs 70.21 billion.

The government's cash balance with NRB (including accounts of provincial and local governments) stood at Rs 297.70 billion as of mid-January 2025, significantly higher than Rs 83.99 billion in mid-July 2024.

At the provincial level, total expenditure reached Rs 44.81 billion, while resource mobilization stood at Rs 84.91 billion. This includes Rs 67.17 billion in grants and revenue transfers from the central government and Rs 17.74 billion in provincial revenue and other receipts.

According to experts, the low capital spending, despite substantial available resources, highlights persistent inefficiencies in budget execution and development project implementation.