Despite budget allocations for the current fiscal year (2024/25), various ministries have been unable to effectively utilize their capital budgets.

According to the Ministry of Finance, the expenditure on capital budgets remains notably low, particularly among major development ministries such as Physical Infrastructure and Urban Development, and the Ministry of Finance itself.

The Ministry of Physical Infrastructure and Transport, which received a capital budget of Rs 143.05 billion for the year, has only spent Rs 47.47 billion as of March 24. Similarly, the Urban Development Ministry spent only Rs 11.88 billion out of its allocated Rs 63.17 billion.

The Ministry of Industry, Commerce, and Supplies has been the most ineffective, spending only Rs 78.5 million from its Rs 2.1 billion capital budget. Likewise, the Ministry of Energy, Water Resources, and Irrigation spent Rs 11.25 billion from its Rs 36.18 billion allocation. The Agriculture and Livestock Development Ministry also reported poor budget utilization.

As of March 24, the capital expenditure across ministries stood at Rs 87.33 billion, while the allocated budget was Rs 323.56 billion. The Office of the Prime Minister and Council of Ministers spent only Rs 130 million out of Rs 558.9 million, while the Ministry of Finance spent Rs 1.6 billion from its Rs 13.79 billion allocation.

The Ministry of Water Supply also underperformed, spending Rs 3.52 billion from its Rs 15.37 billion budget. Other ministries, including Home; Culture, Tourism and Civil Aviation; Foreign Affairs; Forests and Environment; Land Management, Cooperatives and Poverty Alleviation; Women's Affairs; Youth and Sports; Defense; Education, Science and Technology; Communication and Information Technology; Federal Affairs; Health and Population; Labor, Employment, and Social Security; also reported unsatisfactory capital budget spending.

Amid growing concerns over low budget utilization, Finance Minister Bishnu Prasad Paudel held discussions with high-ranking officials from all ministries on Wednesday, urging them to proactively increase capital expenditure.

Finance Secretary Ghanshyam Upadhyaya advised ministry officials to propose programs and plans for the next fiscal year's budget based on their spending capacity. Revenue Secretary Dinesh Kumar Ghimire stressed the need to address the inconsistency between budget allocation and spending.

The Finance Ministry has instructed the ministries to surrender unspent budgets if they cannot be utilized within the current fiscal year. However, officials from various ministries have claimed that budget-related programs are in the implementation phase and that the capital expenditure rate is expected to exceed last year's figures by the end of the fiscal year.