Govt Targets 80–100% Capital Spending Through Major Policy Reforms

Finance Minister Dr. Swarnim Wagle has announced that the government has initiated major policy and procedural reforms to enhance Nepal's capital expenditure capacity and improve budget execution. Speaking at a meeting of the Finance Committee at Singha Durbar on Thursday, the minister said the government aims to raise capital expenditure to 80–100%, breaking away from the long-standing trend of underutilization. He attributed this year's weak capital spending—limited to around 50%—to the suspension of contracts worth Rs. 118 billion, procedural delays, and challenges faced by construction contractors. To address these issues, the government has introduced three major reforms: allowing line ministries to transfer funds directly without prior approval from the Ministry of Finance, facilitating faster project implementation through the newly amended Public Procurement Act, and enabling large infrastructure contracts by securing resources for up to three years under the Medium-Term Expenditure Framework (MTEF). The Finance Minister also said the government has set an ambitious revenue collection target of Rs. 1.58 trillion for the current fiscal year and will strengthen domestic resource mobilization through technology, tax system modernization, and a Taxpayer Incentive Program aimed at promoting billing culture and expanding the formal economy. Clarifying concerns over VAT and taxes imposed on electricity, Dr. Wagle stated that the measures are intended to improve accounting transparency and formalize the sector rather than increase the financial burden on consumers. He further acknowledged that fear of legal complications has discouraged government employees from participating in large procurement processes and said the government will create a supportive environment to protect officials acting in good faith. Additionally, he urged the public to remain cautious of misinformation circulating on social media in the Prime Minister's name and advised citizens to rely only on official verified ("blue tick") social media accounts for authentic government information.