The Deputy Prime Minister and Finance Minister Bishnu Poudel on Monday instructed the government secretaries to increase capital expenditure and reduce current expenditure of their respective ministries. Since he took the charge of the Finance Ministry in December 2022, Poudel has zeroed in on two fronts of improving revenue collection and expedite capital expenditure and controlling recurrent expenditure. During a discussion program on budget implementation at the Ministry of Finance on Monday, Poudel highlighted the need to maintain fiscal discipline. His message to the secretaries was loud and clear. He said, "The situation of capital expenditure and revenue mobilization is worrying, and secretaries have to be strict in revenue management and give special priority to capital expenditure."

Such is the state of poor government spending that seven ministries have spent less than 10 percent of their capital expenditure in the first half of the current fiscal year. Of them, the capital expenditure of four ministries is below five percent. As per the target, ministries should have spent 30 percent of their capital expenditure in the first six months of the fiscal year. The Finance Ministry's data shows none of the ministries have been able to spend capital expenditure as per the target.

The capital expenditure of the ministries having large development budgets has also been dismal in this fiscal. The Ministry of Physical Infrastructure and Transport, the Ministry of Urban Development, the Ministry of Drinking Water, and the Ministry of Energy, Water Resources and Irrigation have not been able to utilize their capital expenditure of even 50 percent of the allocation. According to the Financial Comptroller General Office (FCGO), the government has spent just Rs 53.45 billion, which accounts for just 14 percent of the allocated capital budget since the start of the current fiscal year. This rate of development spending is similar to FY 2021/22 when the capital expenditure stood at 13.44 percent in the first half of the fiscal year. Finance Ministry officials say the poor revenue collection in the first half of the fiscal year has posed a new challenge, that of fiscal imbalance. Unlike in past years, the government's overall revenue collection has decreased significantly in this fiscal compared to the last fiscal year. The revenue administration has been struggling to meet the revenue target from the start of the current fiscal. As resource management becomes challenging, Poudel on Monday directed the secretaries not to ask for additional budget for any heading other than mandatory obligations. Citing the poor revenue collection in this fiscal, secretaries have been told to spend the funds only on the respective headings for which the budget has been allocated. Finance Ministry officials say maintaining fiscal discipline has become of paramount importance for now. Introducing cost-cutting measures, the ministry itself has implemented 17-point guidelines to reduce expenses. "We expect other ministries to follow us in this respect," said a senior official at the ministry.