As of January, the public debt owed by the government is 26 trillion 11.6 billion rupees, internal 12 trillion 82.81 billion rupees and external 13 trillion 28.25 billion rupees.
In the seven months of the current financial year (July to March), the outstanding public debt of the government has increased by 1 trillion 76 billion 96 crore rupees. Along with this, as of the end of last January, such debt was 26 trillion 11 billion 6 million rupees, according to the Public Debt Management Office.
At the end of last June, outstanding public debt was 24 trillion 34 billion 9 billion rupees. The outstanding debt as of last January is 45.77 percent of the Gross Domestic Product (GDP). The office said that out of the total outstanding public debt, there are 12 trillion 82 billion 81 million rupees (22.49 percent of GDP) and external 13 trillion 28 billion 25 million rupees (23.28 percent of GDP).
This year, the government has set a target of raising public debt of 5 trillion 47 billion rupees. According to this, 2 trillion 90 billion 57 crore rupees have been raised till January. "Compared to the annual target, the total public debt is 53.12 percent," said the report of the office, "of which the share of internal and external debt is 59.44 and 28.31 percent respectively." Based on this, in the remaining five months, the government should raise 1 trillion 84 billion 94 billion 58 million internal and 1 trillion 55 billion 57 billion 78 million rupees in external debt.
The report shows that the public debt liability has further increased due to fluctuations in the exchange rate in recent months. The change in the regulation rate until the end of January of this fiscal year has had an impact on the increase of 36.59 billion public debt obligations. The share of foreign debt is 50.87 percent and the share of domestic debt is 49.13 percent in the total public debt as of last January, said the report of the Public Debt Management Office.
In the current financial year, the government has allocated 4 trillion 2 billion 85 million rupees for debt service expenses. Out of that, 1 trillion 87 billion 75 crore rupees have been paid till January. This is 46.85 percent of the total allocation. Debt service expenditure as a proportion of GDP is 3.31 percent as of January.
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 when it increases, it loses. 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 billion 16 million rupees in mid-June 2080, mostly due to devaluation of Nehru with foreign currency. 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 was a profit of 4.23 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. According to the report, 4 trillion 2.85 billion rupees have been allocated in the current financial year for services (to pay interest), 1 trillion 82.44 billion rupees have been paid till the end of January. This is 45.28 percent based on annual budget allocation and 3.20 percent based on GDP.
For the current year, the government has allocated 18 trillion 60 billion 30 billion rupees, through the half-yearly review, it has been reduced by about 10 percent to 16 trillion 92 billion rupees. It seems that 5 trillion 47 billion 67 billion will be less than 12 trillion 60 billion 30 billion from revenue and 52 billion 33 billion from foreign grants. The government plans to raise 2 trillion 17 billion 67 crores from foreign loans to meet the shortfall. According to the government, the net 3 trillion 30 billion that will not be reached during revenue mobilization and foreign aid mobilization will be covered by internal debt.
Since the last financial year, allocations under the heading of financial management have exceeded the size of capital expenditure. Economists say that this is a product of continuous increase in internal and external debt. They say that the increasing debt liability poses a threat of financial imbalance when the level of capital expenditure has decreased and the budget allocation for financial arrangements has increased.
27 billion foreign investment commitments in 7 months
Foreign investment commitments of 26 billion 841.7 million rupees have come in 7 months of the current financial year. According to the Department of Industry, there were 168 investment commitments in the tourism sector, 134 in the information and technology sector, 48 in the service sector, 27 in the manufacturing industry, 6 in the agricultural sector, 2 in the infrastructure sector and one in the energy sector.
Last May, from the third investment conference, the Department of Industry implemented the system of foreign investment approval through the automatic route. Domestic and foreign investments can be made through the automatic route in industries with a total capital of up to 50 million rupees. Minimum limit is not applicable in information technology based industry. According to the data of the department, the highest number of foreign investment commitments came from the approval route rather than the automatic one. According to the department, 2 billion 62 million 82 million 57 thousand rupees have been committed in 175 industries through the automatic route and 24 billion 21 million 34 million 76 thousand rupees in 211 through the approval route.
The highest investment commitment of 9 billion 15 billion 25 million rupees in July and the lowest investment commitment of 1 billion 65 million rupees in January. 3.83 billion 24 million in August, 3.45 billion 63 million in October, 2.22 billion 37 million in October, 2.11 billion 22 million in November, 4.99 billion 91 million in January and 1.6 billion 52 million in January.
In the 6 months of the current financial year, foreign direct investment (equity only) of Rs. 6.5 billion has been inflowed. In the same period of the previous year, foreign direct investment (equity only) was Rs 4.54 billion. Nepal Rastra Bank's data shows that despite the increase in foreign investment commitment, the inflow amount is low. Stakeholders say that there is no policy arrangement that all the foreign investments that have been committed come or should come in the same period.
In the last fiscal year, only 5.96 billion 1.3 million rupees of FDI entered Nepal, according to Nepal Rastra Bank. Although a total of 7.76 billion 86 million foreign investments came in, the net foreign investment was seen as 5.96 billion 13 million rupees due to the outflow of old investments equal to 1.8073 million rupees. In the financial year 2078/79, foreign investment commitments of 54 billion 15 million rupees were received in 295 industries. Stakeholders also say that when the government approves foreign investment, it allows investors to bring in investment in stages (in installments). Government officials also say that the commitment and approved amount will not be received at once.
