Kathmandu : The Government of Nepal has revised downward the size of the current fiscal year’s budget following the mid-year review, projecting that only 85.96% of the original allocation will actually be spent.

According to the mid-year budget review presented by Finance Minister Rameshwar Khanal, total expenditure for the current fiscal year (FY 2082/83) is now estimated at NPR 16.88 trillion (16 kharab 88 arab 32 crore 67 lakh), significantly lower than the original budget of NPR 19.64 trillion presented on May 15 last year by then-Finance Minister Bishnu Prasad Paudel.

The revised targets also include achieving 6% economic growth and containing consumer inflation at 5.5%.

“This revision demonstrates the government’s commitment to fiscal discipline and a realistic approach to public finance management,” Finance Minister Khanal stated while briefing the media.

Breakdown of Revised Expenditure Projections

• Recurrent (Current) Expenditure: NPR 11.26 trillion (11 kharab 25 arab 97 crore 94 lakh), or 95.34% of the original allocation.
• Capital Expenditure: NPR 2.43 trillion (2 kharab 43 arab 30 crore 34 lakh), or only 59.65% of the original capital budget.
• Financial Management (including debt servicing): NPR 3.19 trillion (3 kharab 19 arab 4 crore 39 lakh), or 85.02% of the original provision.

The most significant cut has come in capital spending, reflecting ongoing challenges in project implementation, procurement delays, and low absorption capacity.

Reasons for the Revision and Reallocation

The government cited multiple factors for the downward revision, including the economic disruptions caused by the Janta Janardan Gyanjyoti (JGY) movement in Bhadra (August-September) last year, which affected project execution and created an uncertain environment.

In response:

• Unproductive and unprepared small-scale projects worth NPR 119.54 billion (1 kharab 19 arab 53 crore 65 lakh) have been deferred or postponed.
• An additional NPR 42 billion has been released for projects where procurement processes had already begun and ministries provided justification.

The funds released from deferred projects are being redirected to:

• Strategically important national priority projects,
• Reconstruction of infrastructure damaged during the JGY movement,
• Meeting mandatory obligations and committed liabilities.

The original budget presented in May 2025 had allocated:

• Recurrent: NPR 11.81 trillion (60.1% of total),
• Capital: NPR 4.08 trillion (20.8%),
• Financial management: NPR 3.75 trillion (19.1%).

The sharp reduction in capital spending projection — from 20.8% to an estimated 14.4% of the revised total — once again highlights Nepal’s persistent challenge of low capital expenditure execution, a long-standing criticism of successive governments.

Finance Ministry officials emphasized that the revised budget reflects a more cautious and realistic planning approach amid global economic uncertainties, domestic political transitions, and implementation bottlenecks.

The mid-year review comes at a time when the government is under pressure to deliver on development promises while maintaining fiscal stability ahead of the upcoming fiscal year planning.