In the last fiscal year, the Karnali state government had set a target of 83.44 million revenue collection. But the income was 175 million less than the target. In the previous year, against the target of 836.2 million rupees, 72.53 million rupees were collected and in the financial year 079/80, only 64.95 million rupees were collected against the target of 71.29 million rupees.

The Karnali government has been able to collect only 3.45 billion revenue in the eight financial years since its inception, despite having set a target of 4.34 billion. Due to lack of identification of sources of income and unsystematic tax collection system, the state government's economy has become dependent on central subsidies.

According to the State Controller of Accounts Office, the Karnali government has so far brought a budget of 2 trillion 64 billion 31 crores. According to the office, Karnali's income is only 1.30 percent compared to the budget. "This income cannot cover even the normal administrative expenses," said economist Rajesh Sharma, "on this basis, it will take at least 50 years for Karnali to become independent."

Sharma said that instead of increasing his income, he depended on the federal government's subsidy. According to him, the scope of taxes in Karnali is wide and the implementation mechanisms are not strong. According to the Office of the State Controller of Accounts, the state government has insufficient 8 billion rupees annually to meet its expenses. 10.56 billion for financial equalization in Karnali, which brought a budget of 32 billion 99 million 66 million in the current financial year, conditional on  4 billion 44 crores, 53 crores towards general and 49 crore 46 lakh rupees from the federal government. 

The Karnali government was able to earn only 659.4 million in the last fiscal year 2081/82. The government collects revenue under 44 different headings. The state government is collecting taxes on about two dozen topics including vehicle tax, fees received from the sale of agricultural products, entertainment, advertising, real estate registration, examination fees. In Karnali, the highest vehicle tax collection was Rs. 25 crore last year. 

Provincial Accounts Controller Ratna Prasad Subedi said that there is a problem in revenue collection because the province has only 'tax on agricultural income'. According to him, even though there is no structure at the district level for tax collection, it is difficult to meet the target. "Real estate revenue is collected only from Birendranagar, herbs and forest revenue is being collected through the federal government," he said. Former Economic Affairs and Planning Minister Gopal Sharma said that even though the forests are under the provincial jurisdiction, the revenue of important herbs is collected by the federal government and due to the lack of infrastructure development in the tourism sector, less revenue is collected.

He says that attention should be paid to reducing projects that create financial liabilities in the long term and cutting current expenses. Midwest University Associate Professor Dr. Arjun Bahadur Aydi says that although the country went for federalism in theory, it became dependent on Karnali as it was not implemented in practice. "Currently, balanced development has not been achieved," he said, "for that reason, SAKAR should make a proper policy to increase income and reduce unnecessary expenses and implement financial federalism." The budget expenditure of the Karnali government, which depends on the grant from the centre, is also not satisfactory. The Karnali government, which brought a budget of 31 billion 30 million rupees for the last financial year, barely spent only 64.82 percent. More than 65 percent of the budget has never been implemented in Karnali. "Sometimes the ministers sit with the budget cut, when Baisakh/Jeth comes, and the work of planning begins by transferring money to the workers," said former joint secretary Khambprasad Thani, "and how do we realize quality development and good governance?"