Since the growth rate of revenue collection has been decreasing in recent years, the government is struggling to raise resources even for essential works. In such a situation, Nepal's capital market is likely to become an important source of revenue collection. All sources of revenue are meaningful to us.

Because, foreign aid and subsidies are decreasing globally. Since Nepal itself will be upgraded to a developing country from 2026, the grants and assistance received as a less developed country will stop, and the interest rate of concessional loans will also increase. Capital market has become a strong option to increase revenue when resource collection is under pressure.

In the financial year 2081/82, about 18 billion 22 crore 41 lakh rupees has been collected from the stock market, which is the highest so far. Earlier in the financial year 2077/78, revenue was collected at 14.34 billion rupees. As the NEPSE index increased by about 1000 points in the last financial year, the revenue collection also increased.

2081 Although there were signs of growth in the stock market from the last week of May, after the news of the formation of the government in the coalition of two big parties, the NEPSE growth picked up speed. After the two major parties took the lead in forming the government, stock market investors were excited with the expectation of political stability.

Therefore, in the first three months, the NEPSE index increased by about 1,000 points and reached 2,974 points by the first week of August 2081. During that period, along with NEPSE, the transaction amount also increased. The positive effect of this is that the most revenue has been collected from the capital market since the collection of revenue for the government.

Whenever the stock market rises, the revenue received by the government also increases. As the NEPSE index did not increase, only 6.15 billion rupees were collected from the capital market in the financial year 2080/81 and 3.42 billion rupees in 2079/80. Both these years the NEPSE index was below 2 thousand. While in 2077/78, 14 billion 34 crore rupees and 10 billion 34 crore rupees were received by the government in 2078/79.

In 2077/78, NEPSE was the highest so far, around 3200 points. Even though NEPSE started to decline after that, in 2078/79, it did not fall much lower. Therefore, the government got good revenue from the capital market in both those years. From these data, it appears that the government can get a large amount of revenue if it can increase the scope of the market through the development and expansion of the capital market with priority. 

It has been about 32 years since the capital market was formally established in Nepal. At present, secondary market transactions are done online, but many tools of the capital market have not been implemented except for 'equity' for the market. Modern technology has not been introduced, effective regulation and supervision has not been done. Even in three decades of its establishment, the institutional capacity of the regulatory agency Securities Board and the 'frontline regulator' NEPSE has not increased as expected.

Instead of empowering those bodies in all aspects by enhancing institutional capacity, the government has failed in choosing strong and competent leadership. Pragmatic groups (interested groups) have started to dominate in the selection of leadership. The leadership that is selected in this way has a tendency to act according to their own interests rather than market development. So the market is not doing well. Development and expansion have not been possible.

Based on demat accounts opened for share investment, the number of investors has exceeded 7 million. According to 'CDS and Clearing', 70 lakh 10 thousand 916 investors have opened demat accounts till Sunday. This is about 24 percent of the total population of Nepal. But not all investors who have opened demat accounts have traded shares in the secondary market. At present, 4.189 thousand 677 people have opened accounts for share trading in the secondary market. Among them, only 12 lakh 48 thousand 855 people are active in the secondary market.

NEPSE has been calling investors who have done at least one transaction in the last year as active investors. However, the mentioned data confirms that the attraction of investors in the stock market has increased significantly. Based on this, the government should now give priority to the development and expansion of the capital market. At present, the government has neither added any capital market infrastructure nor implemented financial literacy programs by allocating the budget itself. Instead, the question of institutional governance has been raised because interest groups have been allowed to dominate without being sensitive to the selection of the leadership of the regulatory body.

When revenue collection is struggling to collect current expenses, if only a little attention is paid to the development and expansion of the capital market, more revenue can be collected from this market than the current one.

For this purpose, the government should allocate a certain budget for the development and expansion of the market every year, without being influenced and pressured by interest groups, select competent and qualified people to lead the regulatory body fairly, maintain excellent corporate governance in the regulatory body, and provide access to knowledge and information about the stock market among investors by conducting a comprehensive financial literacy program.