When the current government was formed, an atmosphere of expectation and hope was created in the country last July-August. It was possible because of the agreement and promises made by the parties and leaders who were leading for the formation of the government. Gradually, such an environment is getting dark.
In the seven-point agreement made in June, the Congress and the UML said that they will end the relaxation of the economy and create a reliable, business environment, make economic activities viable, encourage internal and external investment and create sufficient and decent jobs, so it is natural to look for progress details.
But seven months of revenue collection, capital expenditure, foreign aid and subsidy data are not encouraging.
From July to January of the current financial year, the government has collected 6 trillion 42 billion 85 million rupees in revenue. In seven months, the government has set a target of collecting 7 trillion 74 billion 80 billion rupees in revenue, but the collection is 1 trillion 32 billion rupees less than the target.
In the current fiscal year, the government allocated 3 trillion 52 billion rupees for capital expenditure, and had set a target of spending 1 trillion 18 billion 40 billion rupees by the end of January. But during this period, the government has spent 68 billion 41 crore 59 lakh rupees. Similarly, in seven months, the government has received 7 billion 82 billion rupees in foreign grants.
This is 16.87 percent of the annual target. During this period, the government has spent 7 trillion 54 billion 8534 million rupees while earning 6 trillion 59 billion 73 billion 96 million rupees. In other words, government finances are at a loss of about 95 billion.
To increase revenue collection, the government should be able to improve policy, technology and monitoring aspects. First, a credible environment for IA investment has not been created, which has been discussed for a few years. As a result, the loanable amount is piling up in the bank, but the loan disbursement has not increased as expected.
When investment does not increase, it is natural that imports will decrease and with the decrease in imports, there will be a negative impact on revenue. Therefore, the government's attention should be focused on creating an investment environment. If the economy can be made operational, improvement will be seen.
Second, half of the revenue is collected from customs. But there are leakages in customs. There are also problems in other centers of revenue collection. Imports increased by 3 percent last November and reached 7 percent in January. Exports also increased by 31 percent in the same month. However, the positive impact of the increase in import and export was not seen in revenue collection. This means that the leakage in the tax system has not been controlled and the regulation and monitoring at the customs point is not effective.
In all revenue centers including the border areas, if the government can make its systems and agencies agile and strong, widen the use of technology, and increase surveillance, leakages can be reduced and revenue collection can be improved. The target of revenue collection should also be made practical. Or, you need to increase your ability to achieve goals in your system. Otherwise, the trend of raising less than the revenue collection target is repeated every month. Which puts pressure on the government finances and weakens the ability to spend.
Inability to incur capital expenditure is a traditional problem of Nepal. Also, the amount allocated towards capital expenditure is very less. For example, when the budget of 18 trillion 60 billion was announced for the financial year 2081/82, only 3 trillion 52 billion 354 million rupees have been allocated for capital expenditure. Out of that, 50 billion has been spent less than the target set to be spent in seven months.
Due to the lack of capital expenditure, development works are slow in our country. As a result, the benefits that should be received from it have not been received in time. This is also having a negative impact on the cycle of job creation and capital formation. The more the capital expenditure can increase, the more excitement comes in the economy. Which also contributes positively to imports and exports. Which is a means of increasing the country's income.
When the current government was formed, an atmosphere of expectation and hope was created in the country last July-August. It was possible because of the agreement and promises made by the parties and leaders who were leading for the formation of the government. Gradually, such an environment is getting dark. Because, the practical efforts of the government for reform have not been enough. Especially the economy has not been able to feel the leadership of a strong government.
The immediate impact of problems related to the economy can be seen only in this area. But if it cannot be reformed in time, it will bring upheaval in all areas from politics to society. Therefore, the government of the two largest parties in the House of Representatives should understand the pace of time. Their agreements and promises should be converted into achievements. A strong government should be able to demonstrate its capabilities and strategic skills.
