In the last 10 years, the government has been able to spend an average of only 81.31 percent of the total allocated budget annually. The highest budget spending was in FY 2012/13 when the total expenditure reached 88.7 percent.
The data of the last 10 years shows the government has increased the budget size by an average of 44 percent over the actual expenditure of the previous year. While the actual spending stood at Rs 1,309bn in FY 2021/22, the government came up with an annual budget of Rs 1,793bn for FY 2022/23. The size of the current fiscal year budget was increased by 36.97 percent of the actual amount spent in FY 2021/22. In FY 2016/17, the government brought a Rs 1,048bn budget, which was 74.37 percent higher than the actual spending of FY 2015/16. Official statistics show budget utilization has remained sluggish in the last 10 years. The government has been able to utilize on average only 81.31 percent of the total allocated budget in the past decade. The highest spending was recorded in FY 2012/13 when 88.7 percent of the total budget was spent, while the expenditure was most sluggish in FY 2019/20 when only 71.18 percent of the total budget allocation was spent. Economists say the trend of bringing a bloated budget but spending the allocated amount sluggishly has diminished the public’s trust in the budget. “By not being able to spend the budget, the government has failed to fulfill its responsibilities,” said economist Chandra Mani Adhikari. “While presenting the budget, the government promises many facilities to its citizens. When the government fails to implement the budget, the citizens of the country are deprived of the facilities announced by the budget.” The state of capital expenditure spending (development budget) is much weaker. Even as the federal budget is presented six weeks before the start of the new fiscal year, the government has failed to install measures to expedite the development budget. Every year, the government has struggled to spend the allocated capital expenditure, only to promise that it will resolve the problems next year. According to the Financial Comptroller General Office (FCGO), capital expenditure amounted to Rs 135.44bn till May 14. It means only 35.61 percent of the capital expenditure has been spent in the 10 and half months of the current fiscal year. Official statistics show that the government has managed to spend only 72 percent of the capital budget on average every year. The majority of capital expenditure takes place in the last month of the fiscal year i.e., Asar (mid-June to mid-July). The report of the Office of the Auditor General (OAG) also shows that 40 percent of the total capital expenditure takes place in Asar. This creates room for fiscal indiscipline and also affects the quality of the development works. Economists say capital spending is one of the major factors that determine the country’s economic growth rate. The government's capital expenditure includes spending made in infrastructure development, construction, and other sectors that help generate capital formation in the country. Economists and former government officials cite multiple reasons for the poor state of capital expenditure. According to them, starting construction work without preparing a detailed project report (DPR), no clarity in the project implementation modality, land acquisition, and compensation disputes, and lack of inter-agency coordination in the transfer of utility services have plagued the country's development expenditure. Government officials admit the rushed spending that happens usually in the last month (Ashar) of the fiscal year has raised the quality of such spending. According to them, government agencies generally prepare procurements in the first quadrimester of the fiscal year. The spending picks up in the second half of the fiscal year after the government exerts pressure on agencies to speed up development works. “The late submission of bills, settlement of flaws in documentation, and political pressure to spend in certain areas are the reasons for a large amount of budget being spent in the last month of the fiscal year,” said the former secretary. Economist Adhikari points out the structural weaknesses in project preparation and implementation, bureaucratic delays in approving and re-approving projects, and contractor capacity. Total budget spending
| FY | Total budget allocation (in Rs, in bn) | Actual expenditure (in Rs, in bn) | Of the budget allocation (in percent) |
| 2012/13 | 404 | 348 | 88.7 |
| 2013/14 | 517 | 435 | 84.1 |
| 2014/15 | 618 | 531 | 85.96 |
| 2015/16 | 819 | 601 | 73.34 |
| 2016/17 | 1048 | 831 | 79.24 |
| 2017/18 | 1278 | 1084 | 84.83 |
| 2018/19 | 1315 | 1110 | 84.44 |
| 2019/20 | 1532 | 1091 | 71.18 |
| 2020/21 | 1474 | 1196 | 81.15 |
| 2021/22 | 1632 | 1309 | 80.22 |
| 2022/23 (till first 10 month) | 1793 | 1048 | 58.41 |
| FY | Allocation (in Rs, in bn) | Actual spending (in Rs, in bn) | Of total allocation (in percent) |
| 2013/14 | 102 | 66 | 64.7 |
| 2014/15 | 116.75 | 88.56 | 75.85 |
| 2015/16 | 208.87 | 123.25 | 59.01 |
| 2016/17 | 311.94 | 208.74 | 66.91 |
| 2017/18 | 335.17 | 270.71 | 80.76 |
| 2018/19 | 313.99 | 241.56 | 76.99 |
| 2019/20 | 408 | 189.14 | 46.35 |
| 2020/21 | 352.51 | 189.14 | 64.85 |
