24 Ashar, Kathmandu — During the implementation of the fiscal year 2082/83 budget, three finance ministers have had the opportunity to oversee expenditures. The budget, initially announced by then Finance Minister Bishnu Prasad Paudel, was implemented by economist Rameshwar Khanal following Bhadra 2082. Since Chaitra 2082, economist Dr. Swarnim Wagle has been executing the same budget. Although the two expert finance ministers initiated policy and practical measures to reduce the typical spending surge centered around the month of Ashar, this mid-July expenditure trend has resurfaced again.
According to the Office of the Auditor General, the budgeted expenditure for the fiscal year was only NPR 1.346 trillion up to the end of Jestha, but by 23 Ashar, spending had surpassed NPR 1.514 trillion. This means that NPR 168.22 billion was spent within this short period. The office notes that a provision requires payments to close at least seven days before the fiscal year ends, updating expenditure and stopping new payments accordingly. As per the Financial Procedure and Fiscal Responsibility Regulations 2077, payments will be closed from midnight on Thursday. Consequently, there is currently intense pressure on the government system to process payments in the final hours.
The Auditor General’s office reports that in just the last two days (Monday and Tuesday), the government disbursed NPR 4.032 billion in payments, demonstrating that the government continues the historical pattern of conducting expenditures heavily during the Ashar period.
The trend of increased spending in Ashar alongside rapid development work is not new in Nepal. The Auditor General stated that in the fiscal year 2081/82, 31.18% of the total capital budget expenditure occurred in Ashar, with 54% of that spent in the fourth quarter. The first, second, and third quarters accounted for 13%, 12%, and 21% of capital spending respectively. A similar pattern has been observed in the current fiscal year. Up to Tuesday, 38.35% of the total allocated capital budget has been spent. Capital expenditure stood at NPR 149.29 billion on Sunday, increasing by only NPR 713 million in the following three days to NPR 156 billion.
The 63rd Annual Report of the Auditor General highlights that the government has struggled to spend the budget timely due to unrealistic budget formulation that doesn’t properly consider resource availability and spending capacity. Mid-year budget corrections have also failed to make a significant difference. Despite policy reforms, their effect on actual spending remains limited.
This year, to accelerate payment processes towards year-end and enhance budget utilization, the Finance Ministry amended the Financial Procedure and Fiscal Responsibility Regulations to reduce procedural delays between ministries. The amendment empowered accountable officers (such as ministry secretaries or agency heads) to approve budget reallocations directly without waiting for the Finance Ministry, aiming to prevent backlog and speed up payment. However, data does not yet reflect a significant positive impact from this policy.
Analyzing the sluggish public expenditure, the Finance Ministry’s semi-annual budget review indicated that delays in receipt of expected expenditure reports impeded effective public spending. The Ministry explained that prioritizing new projects while allocating smaller budgets to ongoing ones during annual budget preparations often leads to year-end budget transfers based on ad hoc preferences.
Additionally, projects without completed procedural steps such as land acquisition, compensation, forest area use, and damage assessment have disproportionately large budgets allocated, affecting execution. Development and payment activities were adversely impacted by protests on 23 and 24 Bhadra, which damaged 2,134 buildings across 1,693 government offices. Records were also damaged, disrupting reporting, cost, and socioeconomic and technical evaluations essential for planning and budget alignment.
Problems also arose from low-budget proposals for agreed projects and the addition of new projects beyond allocated limits, complicating payment management and increasing the number of unfinished projects. Though the current budget included provisions for project completion starting 16 Jestha, work has not advanced as prioritized. Delay in timely distribution of funds earmarked for new projects and programs also contributed to implementation delays.
Looking ahead, Finance Minister Dr. Swarnim Wagle has pledged that capital spending next year will meet targets, the budget size will remain unchanged, and irregularities in public expenditure will be addressed. He outlined plans to improve procurement processes and indicated that flexible policies for source management and budget reallocation will continue in the next fiscal year. The government plans to operate in a mission mode, mobilizing alternative financing, ensuring project leadership stability, and completing projects within predetermined costs and deadlines.
A Development Project Sunset Law is also set to be introduced to Parliament within this fiscal year. Measures such as tracking and limiting mobilization advance payments to project use only and establishing a preliminary three-month pipeline for infrastructure projects using a hybrid NUT model have been announced.
Due to the conflict in West Asia, rise in prices of fuel, bitumen, and construction materials has posed challenges for builders; addressing these difficulties has been included in the budget. According to the Office of the Prime Minister and Council of Ministers, a secretariat meeting held on 3 Ashar decided that cost estimations and tender processes for the upcoming fiscal year’s budget and programs will be completed by the end of Ashar to ensure effective implementation.
