Budget deficit recorded around Rs 400 in the FY 2022/23

Published On: July 18, 2023 08:00 AM NPT By: RAJESH KHANAL

Govt receipts were less Rs 94 billion while public expenditure increased by Rs 128 billion last year compared to FY 2021/22

KATHMANDU, July 18: The government witnessed a budget deficit of Rs 397.87 billion in the last fiscal year due to low revenue collection amid soaring public expenditure.

According to the Financial Comptroller General Office (FCGO), the government spent Rs 1.429 trillion during the fiscal year 2022/23. The amount was only 79.69 percent of the targeted amount of Rs 1.793 trillion.

Similarly, the government made total receipts of Rs 1.031 trillion against the target of Rs 1.458 trillion. The collected amount was only 70.73 percent of the targeted amount.

The government receipt in the last fiscal year was Rs 94 billion less than the amount of the previous fiscal year. On the other hand, the government expenditure was Rs 128 billion more in the review period. The majority of expenditure was borne under the unproductive recurrent expense segment.

The government revenue from tax collection stood only 66.82 percent of the estimated Rs 1.295 trillion. During the review period, the government, receiving only 38.4 percent of the targeted amount in grants, failed to generate financial resources under the heading.

The notable fall in the government revenue collection has been attributed to the government imposing a 10-month long imports restriction after the economy faced severe negativity in the balance of payments. Similarly, the recent economic slowdown also led to a decline in the collection of taxes.

On the other hand, the government failed to check its undesired expenditure although the government had announced austerity measures some six months ago.

With the soaring gap between the government receipts and the public expenditure, the country has been facing the heat of an increasing public debt. The Public Debt Management Office shows Nepal’s public debt increased to Rs 2.173 trillion as of mid-June which was more than double compared to the figure five years ago.

As per the government data, the debt to gross domestic product (GDP) ratio has reached 44.79 percent, up from 22.7 percent as of mid-July 2017. According to lawmaker and economist Swarnim Wagle, the ratio of the country’s debt to GDP approaching 50 percent is a sign of alarm for a poor country like Nepal.