Kathmandu. Nepal’s foreign development assistance is being spent outside the national budget system and government coffers.

The amount that is included in the government’s annual budget book (red book) is considered off-budget expenditure and the amount spent without the red book is considered off-budget.

Similarly, the money included in the Red Book is also spent through the government’s coffers (un-treasury) and a large amount is spent outside the treasury (off-treasury). According to the Development Cooperation Report 2022/23 released by the Ministry of Finance, 22.5 percent of the total development assistance received by Nepal in the current fiscal year was spent outside the budget.

According to the report, Nepal has received development assistance worth USD 1.4 billion in the fiscal year 2022-23 of which around Rs 1.10 billion or around 77.5 per cent has been ‘on budget’ and Rs 3093 (22.5 per cent) has been off-budget. According to the report, only 40.3 percent or $ 428.1 million was spent from the government treasury.

According to the Development Cooperation Report-2021/2022, 20.8 percent of the total foreign development assistance received by Nepal in the current fiscal year was spent from the government’s annual off-budget. This means that the off-budget ODA has increased by 1.7 percentage points in the fiscal year 2022/23 compared to the previous fiscal year. Similarly, 16.5 percent of the budget was spent in the fiscal year 2019/20 and 15.7 percent in the fiscal year 2020/21. Off-budget expenditure has increased by 6.5 percentage points in the first four years of the fiscal year 2020/21.

In recent years, the amount of development assistance has also been steadily decreasing. In the fiscal year 2021-22, Nepal had pledged foreign development assistance worth USD 2.4 billion, of which the actual receipt was USD 1.4 billion.

In the fiscal year 2020/21, Nepal received development assistance worth US$ 1.7 billion and in the fiscal year 2019/20, it was the highest in the last 10 years i.e. US$ 2 billion.

This figure shows that the receipt of development assistance increased by 26.9 percent in the fiscal year 2019-20 and has been continuously decreasing in the last few years.

What year is the ‘off-budget’?

According to the report of the Ministry of Finance, a large amount of money spent by non-governmental organizations in Nepal seems to be non-budgetary. According to the statistics of the Ministry of Finance, in the fiscal year 2019-20, Nepal received development assistance equivalent to 2 billion US dollars while 1.07 billion US dollars were un-budgeted. That’s equivalent to 83.5 percent. Of the total foreign aid received in that year, 16.5 percent was spent ‘off-budget’.

Similarly, only 52.8 percent of ‘non-treasury expenditure’ in this year is ‘non-treasury’. In the fiscal year 2020/21, the receipt of foreign development assistance amounted to US$ 1.7 billion, while US$ 1.4 billion was ‘un-budget’ and US$ 264.7 million was off-budget. 84.3 per cent of the budget was spent from within the budget and 15.7 per cent from outside. In this year, 66.6 percent of the development assistance has been spent from the government fund.

Similarly, in the fiscal year 2021/22, the amount of foreign development assistance was 79.2 percent and 20.8 percent off-budget. The share of development assistance spent on the ‘un-Treasury’ in the fiscal year was 57.4 percent. Of the development assistance amounting to USD 1.4 billion till the fiscal year 2022/23, around Rs 1.10 billion (about 77.5 per cent) has been ‘on budget’ and Rs 3093 million (22.5 per cent) has been off-budget. According to the report, only 40.3 percent or $ 428.1 million was spent from the government treasury.