In the first 6 months of the current financial year (from July to December), government debt has increased by 1 trillion 2 billion 3 billion rupees. Along with this, the Public Debt Management Office has stated that the outstanding public debt of the government till the end of January is 25 trillion 36 billion 13 billion rupees.

At the end of last June, the outstanding public debt was 24 trillion 34 billion 9 billion rupees. As of last December, the outstanding debt comes to 44.46 percent of the Gross Domestic Product (GDP).

Out of the total outstanding public debt, the office said that there are 12 trillion 34 billion 71 crore rupees (21.64 percent of GDP) and external 13 trillion 1 billion 41 crore rupees (22.81 percent of GDP).

Public debt liabilities have declined in recent months due to fluctuations in exchange rates. The change in the regulation rate until the end of January of this fiscal year has had an impact on the increase of public debt obligations of 11.61 billion. The share of foreign debt is 51.31 percent and the share of domestic debt is 48.68 percent in the total public debt as of last March, said the report of the Public Debt Management Office. 

Fluctuations in the exchange rate of other foreign currencies, including the US dollar, also lead to losses on public debt obligations. When the exchange rate of dollar and other currencies decreases, Nepal gains and loses when it increases. Due to changes in Nehru's exchange rate with foreign currency, the amount of external debt varies. Compared to mid-June 2079, there was a foreign exchange loss of 59.16 billion rupees due to the devaluation of Nehru against foreign currency in mid-June 2080.

The Public Debt Management Office reported that the same trend was repeated last December. Due to exchange rate changes, 4 out of the last 7 financial years are in loss and the remaining years are in profit. In the financial year 2079/80, there was a loss of 59 billion 15 million rupees. But in the financial year 2080/81, there is a profit of 4 billion 23 billion exchange rate. 

Especially after the 2072 earthquake, Nepal took a huge loan and some of the public loans were used in unproductive areas. It seems that the size of the capital expenditure is decreasing with the union as the budget has to be allocated to the local level and the state along with the salary and allowance obligations to the government.

This year, the government has set a target of raising public debt of 5 trillion 47 billion rupees. According to this, 2 trillion 40 billion 8 crore rupees have been raised till January. "Compared to the annual target, the total public debt is 43.89 percent," said the report, "of which the share of internal and external debt is 54.86 and 27.20 percent respectively." 58 lakh internal and 1 trillion 57 billion 967 million rupees external debt should be raised. According to the

report, in the current financial year, 4 trillion 2.85 billion rupees have been allocated for debt service (payment of principal and interest), and 1.82 billion 40 billion rupees have been paid up to the end of January. This is 45.28 percent based on annual budget allocation and 3.20 percent based on GDP. 

The government has allocated 18 trillion 60 billion 30 million for the current year. Out of the total allocation, 11 trillion 40 billion 66 million or 61.31 percent is for current, 3 trillion 52 billion 35 million for capital, or 18.94 percent, and 3 trillion 67 billion 28 million for financial system, or 19.74 percent. This expenditure estimate is 6.2 percent higher than the current fiscal year's allocation and 21.56 percent higher than the revised estimate.

'Out of the estimated expenditure sources for the coming fiscal year, 12 trillion 60 billion 30 million from revenue and 52 billion 33 billion from foreign grants will be less than 5 trillion 47 billion 67 million,' the budget statement says, 'to meet the shortfall from foreign loans. 2 trillion 17 billion 67 crore will be raised. The net 3 trillion 30 billion that will not be reached when mobilizing revenue and mobilizing foreign aid will be covered by internal debt.' Economists say that this is a product of continuous increase in internal and external debt. They say that rising debt obligations pose a threat of fiscal imbalances at a time when the level of capital expenditure has decreased and budget allocations for financial arrangements have increased.