Nepal's Government Spending Outpaces Revenue by Rs 9.72 Billion in First Two Months of FY 2026/27
Nepal's government spent Rs 199.84 billion in the first two months of FY 2026/27, exceeding revenue collection of Rs 190.11 billion by Rs 9.72 billion. Capital expenditure remains critically low at just 1.78 percent of the annual allocation, raising concerns about development spending.
KATHMANDU, Sept 17 — The Nepal government spent nearly Rs 200 billion in the first two months of the current fiscal year 2026/27, with expenditure exceeding revenue collection by Rs 9.72 billion.
According to the Financial Comptroller General Office (FCGO), the government spent Rs 199.84 billion by mid-September, equivalent to 9.41 percent of its annual budget.
Of the total expenditure:
- Recurrent expenditure stood at Rs 122.04 billion, or 9.6 percent of the Rs 1.27 trillion allocated for the fiscal year.
- Capital expenditure reached just Rs 7.66 billion, a mere 1.78 percent of the Rs 431.11 billion allocated for the year.
- Financing expenditure amounted to Rs 70.14 billion, representing 16.59 percent of the Rs 422.65 billion allocated.
The government collected Rs 190.11 billion in revenue by mid-September, equivalent to 11.58 percent of its annual target. This means expenditure exceeded revenue by approximately Rs 9.72 billion during the first two months.
Of the total revenue:
- Tax revenue stood at Rs 172.43 billion, or 12.27 percent of the annual target of Rs 1.4 trillion.
- Non-tax revenue amounted to Rs 10.78 billion, or 6.9 percent of the annual target of Rs 177 billion.
The government has also targeted Rs 61.75 billion in foreign grants for the current fiscal year. By mid-September, it had received around Rs 5.53 billion, or 8.96 percent of the annual target.
The slow pace of capital expenditure — a persistent challenge in Nepal's fiscal management — raises concerns about the government's ability to execute its development agenda within the fiscal year. With revenue collection also lagging behind targets, the widening fiscal gap could put additional pressure on government finances in the coming months.