In five months, government finances are at a deficit of one and a half trillion, capital expenditure and revenue collection are below the target
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Even for five months of the current financial year, the situation of capital expenditure is critical. According to experts, even though the government claims that economic development will be prioritized and government spending will increase, as there will be political stability in the country after the formation of the government in the coalition of two major parties, Nepali Congress and CPN-UML, the results are not satisfactory.
In the five months of the current financial year, the government has spent 40 billion 80 million rupees. This is only 11.58 percent of the annual target. In five months of last year, the government spent 37 billion 70 million or 11.94 percent of the annual target. The capital expenditure for five months is less than the government's monthly target of about 27.5 billion. The government had set a target of 68.4 billion rupees in capital expenditure by the end of November. This year, the government has allocated 3 trillion 52 billion 354 million rupees towards capital expenditure.
According to economist Keshav Acharya, there has been no improvement in the first five months of this year as compared to last year, due to the lack of attention of the government in increasing the capital expenditure. This year, due to development and construction work, more capital expenditure was not seen compared to last year. As the government has paid about 20 billion rupees for the projects completed last year, it has been seen that the capital expenditure has increased a bit, he said.
If the payment to the builders is reduced by about 20 billion rupees this year, he says that the situation of capital expenditure for five months of this year is critical. He also stated that the efforts made by the Ministry of Finance to encourage or facilitate development ministries for increasing capital expenditure are not enough.
In the first five months of the current financial year, the government's revenue collection has also been very weak. By the end of November, 28.15 percent of the annual target, i.e. 3 trillion 99 billion 59 million, has been collected. This is about one billion rupees less than the government's monthly revenue collection target. In five months of this year, the government had set a target of collecting Rs 4 trillion 94 billion in revenue. For the current financial year, the government has set a target of collecting 14 trillion 71 billion 62 billion 95 million in revenue.
According to this, the government's goal of collecting revenue is 1 trillion 20 billion 51 billion 61 million in July, 92 billion 84 billion 27 million in August, 96 billion 56 million 92 million in October, 96 billion 44 billion 2 million in October and 76 billion 35 million in November. yes But the revenue collected in all months is less than the monthly target. Although the revenue collection is on the road to improvement, the Finance Ministry officials admit that the target has not been met. They say that it is impossible to meet the revenue collection target with normal performance. Even in the current state of the economy, the target of revenue collection of more than 30 percent is set, which in itself is a challenge, the official says. However, they claim that there has been some improvement this year compared to last year's revenue collection.
Economist Keshav Acharya said that although the revenue could not be collected as per the target, the growth rate has increased this year compared to last year. Imports have increased by 0.17% in four months, which has contributed to revenue growth. During this period, the credit to the private sector increased slightly. This will increase imports and increase in imports will help in revenue growth,” added Acharya.
In the first five months, 3 trillion 63 billion 55 million rupees have been spent. This is 31.87 percent of the annual target. During the same period of last year, current expenditure was 3 trillion 59 rupees or 31.53 percent of the annual target. This year, 11 trillion 40 billion 6645 million rupees were allocated under the current title.
In the first five months of the current fiscal year, the government has paid 51 billion 765 million 57 million only for the principal payment of government debt and investment in government institutions (financial arrangement). This year, 41.32 percent of the budget allocated under the heading of financial arrangements has been spent. Under the heading of financial arrangements, the government allocated three billion 67 billion 284 million 45 million for the current financial year. Even in the first quarter of this year, the government has not been able to receive foreign grants.
Looking at the income and expenditure of the government in the first five months of this year, there is a deficit of about one and a half billion government finances. During that period, the government spent 5 trillion 56 billion 1177 million rupees while earning 4 billion 577 million rupees. Until November of the last financial year, the government's finances were in a deficit of about 70 billion. During that period, the government spent 4 trillion 52 billion 9957 million while earning 3 trillion 83 billion 92 million 42 million.
The government has set a target of 6 percent economic growth this year. The World Bank has projected economic growth of 5.1 percent and Asian Development Bank 4.9 percent. For the current financial year, the government has allocated a budget of 18 trillion 60 billion 30 million. 11 trillion 40 billion 66 million i.e. 61.31 percent for current, 3 trillion 52 billion 35 million i.e. 18.94 percent for capital and 3 trillion 67 billion 28 million i.e. 19.74 percent for financial system have been allocated.
Mainly, the economy which has gone down after the covid has not yet been strengthened. Industries are running at less than 50 percent capacity. Production and productivity, import, export, foreign investment and other indicators have decreased. But while the government says the economy is on the mend, the private sector claims the economy is still in recession. According to the provisions of Nepal's constitution, the three pillars of the economy, government, private and cooperative, are in critical condition.
