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8 For instance, the Nepal Study points out that “projects that have not undergone the necessary preparations are included in the budget, projects which were not included at the start of the budget are forcefully included during the implementation phase, a mammoth proportion of capital expenditure is spent only at the end of the fiscal year, and there is a major abuse of budget head change and sour. [...] Indicators of the Sustainability of Nepal’s Public Debt While the current stock of Nepal’s public debt may indicate a low risk of debt distress, there has been a sharp rise in the debt, which could increase the risk of debt distress in the medium to long term. [...] Both the internal and external debt have witnessed a rise in the period FY 2013/14–2021/22, but the rise in internal debt has been steeper—the external debt rose from 17.9 percent of GDP to 21.1 percent of GDP and the internal debt rose from 10.7 percent of GDP to 20.4 percent of GDP (Figure 5). [...] 16 While the intergovernmental transfers to the provincial and local governments are recorded as the recurrent expenditure of the federal government, the intergovernmental transfers fund both the recurrent and capital expenditure of the subnational governments. [...] Hence, the root causes of many of the suboptimal and wasteful public expenditures lie outside the scope of the Act, and as such, will require the government to implement major reforms in order to better manage public debt in addition to faithfully implementing the newly promulgated Act.