Along with affecting revenue mobilization, the protracted blockade has also squeezed spending capacity of the government. The government has been able to spend only 6 percent of the capital expenditure, whereas it has been able to mobilize only 69 percent of the revenue target at the end of first five months of the current fiscal year, according to the Ministry of Finance.
The government had targeted to mobilize Rs 162 billion in the first five months of 2015/16. But it could mobilize only Rs 112.82 billion. According to the ministry, mobilization of customs duty has been hit hard. "Customs revenue mobilization stood at Rs 46.47 billion against the target of Rs 78.23 billion," the ministry said, adding that the shortfall stood at Rs 31 billion or 41 percent of the target.
Birgunj Customs Office, which handles almost 70 percent of the imports and exports, has been closed since last three months.
The revenue evaluation meeting held at the finance ministry on Tuesday also concluded that smooth operation of Birgunj customs was important to increase mobilization of customs duty.
Meanwhile, the government has managed to spend only 6 percent of the capital expenditure at the end of first half of 2015/16. “The government is giving priority to national pride projects in mid-term budgetary evaluation," Govind Nepal, an advisor to the Minister for Finance, said.
Speaking at the meeting, Minister for Finance Bishnu Poudel asked ministry officials to work hard to meet the target. "Since the present situation is not a normal one, one has to put extra effort to meet the target," he said, asking officials to analyze the reasons behind revenue shortfall and tackle them accordingly.
Though the finance ministry has already issued a white paper on current economic situation, the government has not been able to normalize fuel supply and expedite spending due to weak governance and lack of will power.
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