Public debt decreased by 45 billion in April compared to March

The government raised 390 billion 83 billion public debt in 10 months, the target of collecting 5 trillion 47 billion in the current year

Jestha 5, 2082

Kantipur Reporter

Public debt decreased by 45 billion in April compared to March

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As of last May, the outstanding public debt of the government has been limited to 26 trillion 22 billion 40 million rupees. Compared to last March, the outstanding public debt as of mid-May is 44.86 billion rupees less.

At the end of March, such debt was 26 trillion 67 billion 26 million rupees. During this period, public debt decreased by 45 billion in April as compared to Chait, because the old debt was paid more than the new debt collected by the government. 

Public debt liability decreased in April compared to the previous month due to the fact that principal payments were more than receipts of public debt in April, confirmed Gopikrishna Koirala, Head of Public Debt Management Office. He also admitted that the receipt of external loans is less compared to internal loans in Nepal. According to Koirala, external loans were not received as per the target due to the failure of projects and institutions to work within the stipulated time. According to the

office, the government has collected 3 trillion 90 billion 83 crore rupees in public debt in 10 months. This year, the government had set a target of collecting 5 trillion 47 billion such loans. The accumulated public debt in 10 months is 71.45 percent of the annual target. During that period, the realization of internal debt is 3 trillion 1 billion 14 billion (91.25 percent of the annual target) and external debt is 69 billion 68 billion (41.33 percent of the annual target). 

According to the report of the Public Debt Management Office last May, although the receipt of internal loans is high, the external loans are very low. "If the work is done according to the agreement, the external loan will be more, if not, no more loan will be received," said Koirala, "If the Nepal Electricity Authority, Nepal Civil Aviation Authority and other agencies complete the work on time, the external loan will be more, if not, the amount will not be received as per the target." This is 76.49 percent of the annual target. Out of this, 2 trillion 65 billion 67 crore (78.85 percent) was spent for principal and interest of internal debt and 42 billion 47 crore (64.45 percent) was spent for principal and interest of external debt.

Along with this, according to the data of the office, out of 26 trillion 22 billion 40 million rupees outstanding public debt by the government till last May, 12 trillion 66 billion 70 million rupees are internal and 13 trillion 55 billion 69 million rupees are external. In 10 months of the current financial year, 1 trillion 88 billion 30 crores of public debt has been added. Public debt outstanding as of April is 42.49 percent of gross domestic product (GDP). Out of outstanding public debt, domestic is 22.20 percent of GDP and external is 23.76 percent.

As of last June, the public debt was 24 trillion 34 billion 9 billion rupees. This year, the government has set a target of raising public debt of 5 trillion 47 billion rupees. Based on the public debt raised until last April, the government has yet to collect 1 trillion 56 billion 16 billion rupees of public debt in the remaining two months of this year, of which 38 billion 85 billion 94 million domestic and 1 trillion 27 billion 31 billion rupees of external debt have yet to be collected. 

In the current financial year, the government has allocated 4 trillion 2 billion 85 million rupees for debt service expenses. 

Of that, 3 trillion 8 billion 14 billion rupees have been paid till April. Looking at the public debt owed by the government till last March, now every Nepali has about 90 thousand rupees. 

According to the National Census 2078 of the National Statistics Office, the population of Nepal is 29.1 million 64 thousand 578. This figure was calculated by dividing the outstanding public debt by this population until last May. The National Statistics Office has predicted that GDP will reach 61 trillion 7 billion rupees in the current financial year.

Economists say that ever-increasing public debt poses risks. Since the financial year 2080/81, allocations under the heading of financial management have exceeded the size of capital expenditure. They say that this is a product of continuous increase in internal and external debt. As the gap between the level of capital expenditure and the budget allocated for the financial system widens with increasing debt repayment obligations, there is a risk of shrinking the government's ability to invest in the future. Economists say that there is also a risk of financial imbalance as a result.

Although there is a theoretical concept that internal debt should also be spent in the capital sector, experts argue that the government is sometimes using it for current expenditure as per the need.

Kantipur

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