Out of the budget ceiling of Rs 1.965 trillion, the shortfall Rs 637.55 billion will be manage through loans
KATHMANDU, March 9: The government is expected to generate revenue worth Rs 1.2630 trillion in the next fiscal year, which is similar to the amount projected for the current FY.
While setting the budget ceiling for FY 2025/26, the National Resource Estimates Committee of the National Planning Commission (NPC) has projected the government revenue for the next fiscal year. For the current FY, the government had estimated to collect revenue worth Rs 1.2603 trillion, which was lowered to Rs 1.1452 trillion through the mid-term budget review.
The government is now facing a challenge to generate financial resources mainly due to a surge in its liabilities on debt management. As per the government records, the country’s debt burden has crossed 2.611 trillion, while the ratio of public debt to the country’s gross domestic product has reached 45.77 percent.
The NPC has set a budget ceiling of Rs 1.965 trillion for the upcoming Fiscal Year 2025/26, an increment of around Rs 100 billion of the earmarked expenditure for the current fiscal year. Of the projected expenses for the next fiscal year, the NPC has estimated that the government revenue will remain at Rs 1.263 trillion.
The shortfall amount of Rs 637.55 billion for the next FY will be fulfilled from internal borrowings and external loans. As per the NPC’s estimation, the government will receive Rs 45 billion in foreign grants, Rs 235.09 billion in foreign loans, while the remaining Rs 357.46 billion will be generated from internal loans.
For the current FY, the government has projected to collect Rs 330 billion from internal loans, Rs217 billion from external loans and Rs 52.3 billion from foreign grants.
The government has been reiterating its commitment to implement a realistic budget, rather than a populist budget, for the next fiscal year. NPC Vice-chairperson Shiva Raj Adhikari said the projected revenue for the upcoming annual budget is only 10 percent more than the revised revenue collection target maintained in the mid-term budget review. “It shows that the effort has been made to endorse a realistic budget this time,” Adhikari said.
After the NPC prescribed a budget ceiling, the government issued guidelines directing line ministries to only forward those projects that are registered in the project bank. The guidelines also talk about discouraging new projects that have not completed studies. In addition, the government has promised to allocate a budget for essential headings while maintaining austerity strictly through the next year’s budget announcement date on May 29.