Government Struggles to Fully Utilize Budget in Current Fiscal Year

The government has failed to fully utilize the allocated budget for the current fiscal year 2082/83, even after seven months have passed. According to the Ministry of Finance, while the government had introduced a budget of NPR 19 trillion 64 billion for the fiscal year, by the end of Magh, it had only managed to spend NPR 8 trillion 1 billion, which accounts for 40.8% of the allocated budget.

The majority of the expenses are related to current expenditures, which cover the regular and daily operations of the government. This includes staff salaries, allowances, pensions, office operation costs, and the purchase of office materials and stationery. The government allocated NPR 11 trillion 80 billion for these current expenditures, out of which NPR 5 trillion 62 billion was spent by the end of the reporting period. This represents 47.6% of the allocated current expenditure budget.

In contrast, the government has spent a significantly lower amount on capital expenditures, which involve investments in long-term infrastructure like roads, bridges, schools, hospitals, and energy projects. The government had allocated NPR 4 trillion 7 billion for capital expenditure but has only spent NPR 63.72 billion by the end of Magh, which is a mere 15.6% of the allocated amount. This low spending rate indicates a slowdown in development projects.

In the financial management category, the government allocated NPR 3 trillion 75 billion, of which NPR 1 trillion 75 billion was spent by the end of Magh, representing 46.7% of the budget. This allocation mainly covers public debt management, which has seen an increase due to rising liabilities.

On a positive note, there has been an improvement in revenue collection during the first seven months of the fiscal year. The government collected NPR 6 trillion 69 billion 32 million, which is higher than the NPR 6 trillion 50 billion 90 million collected in the same period last year. Revenue collection from all sources, except income tax and non-tax revenue, has shown improvement.

However, the government faced challenges in income tax collection due to a continuous decline in interest rates and sluggish activity in the stock market and real estate sector. Customs duties collected during the period amounted to NPR 1 trillion 35 billion 32 million, while VAT collection reached NPR 1 trillion 96 billion 44 million, showing a slight increase from last year's figures.

Despite these improvements, the Ministry of Finance has expressed concerns about the overall budget performance. Finance Minister Rameshwar Khanal acknowledged the difficulties in achieving the budget targets due to elections and other challenges.