The overall expenditures by the federal government thus far in the running fiscal year (FY) have increased although the capital expenditure (capex) has decreased in terms of the total amount.
Overall Expenditure Swings up while Capex Swings Dovish
The overall expenditure swung upwards in the running FY but the capital expenditure has yet to equalize the previous FY record.
The financial comptroller general office (FCGO) data showed that the overall expenditure jumped up by 11.70 per cent to Rs. 1013.3 billion in mid-June 2022 in comparison to Rs. 907.1 billion in the same period of the previous FY.
But in contrast, the capex spending again remained at a dismal position to Rs. 136.18 billion till mid-June which is less by about Rs. 4 billion when compared with the capex in the same period in the last FY when the capex amount was Rs. 140.3 billion.
Out of the overall expenditure, the recurrent and financial have surpassed the previous FY record. The recurrent expenditure went up by 14.41 per cent to Rs. 794.7 billion in the first 11 months of the current FY in comparison to Rs. 694.6 recorded in the same period of the previous FY. Similarly, financial expenditure accounted for Rs. 82.4 billion in the first 11 months which was Rs. 72.6 billion in the same period of the previous FY.
Growth rate of spending decelerating after the stiff pick-up in FY 2016/17
The past FY years’ record showed that the growth rate of spending turned tailspins after the FY 2016/17. According to the annual reports of the Nepal Rastra Bank (NRB), the growth rate of the recurrent expenditure, capital expenditure and financial expenditure went up by 39.8 per cent, 70.6 per cent, 2.0 per cent respectively in year on a year (YoY) basis on the FY 2016/17. However, this trend did not continue. In the FY 2020/21, the recurrent expenditure and capital expenditure grew by 8.6 per cent and 20.7 per cent respectively on the YoY basis whereas the financial expenditure slid down 14.4 per cent.
Fed Govt expenditure down up
The economic survey of the FY 2021/22, stated that the expenditure ratio of the federal government out of the integrated expenditure has been steeply dipping down over the last three fiscal years while the ratio is spiking in case of the province and local levels.
In the FY 2020/21, percentage of the federal government expenditure recorded 58.9 per cent which is lower than 62 per cent recorded in 2019/20. While the percentage of the provincial governments’ spending recorded 12.4 per cent out of the integrated expenditure in FY 2021/22 which is up from 11.2 per cent recorded in the FY 2020/21.
Similarly, the percentage of the local level spending out of the integrated expenditure recorded 28.7 per cent in the FY 2021/22 which is above the 26.9 per cent recorded in 2020/21.
Source : TRN,
