Provinces spend only 14.16 pc of budget in mid-year review: FinMin report

KATHMANDU: The spending performance of provincial governments is disappointing despite more than half of the current fiscal year having elapsed, the Ministry of Finance has said in its Mid‑Term Evaluation Report of the Budget for FY 2025/26 unveiled today.

The report shows the aggregated budget for all seven provinces was Rs 287,703.3 million for the current fiscal year, of which only 14.16% had been spent by the end of Poush (mid‑January 2026). Provinces had spent 21.43% on recurrent items and 9.33% on capital items. Of Rs 975 million appropriated for the financial management category at provincial level, no expenditure was recorded by mid‑January.

The particularly weak state of capital spending, which is directly linked to development and structural transformation, has raised questions about the absorptive capacity of the provinces.

Provincial performance varies. Bagmati Province appears comparatively progressive in terms of expenditure: it had a budget of Rs 6,747.73 million and had spent 14.20% of the total by mid‑January, with 22.48% spent on recurrent items and 8.99% on capital items. Lumbini Province recorded the highest capital expenditure at 18.04%.

By contrast, Madhesh Province shows the weakest performance. It has spent only 7.71% of its total budget. Of a budget of Rs 46,983.4 million for the current fiscal year, Madhesh had spent Rs 3,623.6 million during the reporting period and recorded the lowest capital expenditure at 3.36%.

The report’s findings underline concerns that provinces are failing to translate budget allocations into development outcomes, prompting calls for measures to strengthen planning, land acquisition processes and project implementation at the provincial level.

(With inputs from RSS)