Finance Minister Barshaman Pun has said the government is preparing to allocate the budget only to those projects that have the capacity to spend it.

The finance minister said so during a meeting with the secretaries of different ministries and security chiefs at the finance ministry on Thursday.

On the occasion, Minister Pun stressed that the government agencies should up their capacity to spend the budget, adding that all the ministries except the Ministry of Energy, Water Resources and Irrigation had made less than 40 per cent capital expenditure.

He pointed out that the lack of competence in budget allocation is also responsible for limited capital expenditure besides poor spending capacity. "But, it will not repeat in the upcoming fiscal year. The finance ministry is mulling over allocating budget only to those projects that can spend the budget.

Finance Minister Pun also announced that unrealistic projects will not get a budget in the upcoming fiscal year.

Due to a delay in budget implementation, there is an adverse impact on employment creation and capital formation, the finance minister said.

He argued that limited capital spending and a shrink in revenue collection have created issues in the country's economy although the external sector is improving gradually.