KATHMANDU, Jan 7: The government is looking for alternative sources for financial management as it faces a severe crunch of funds to finance its immediate liabilities.
Speaking at a program on Monday, Finance Minister Bishnu Prasad Paudel acknowledged that the government has not been able to meet its recurrent expenditure out of its revenue collection. According to him, the government is distributive in nature while it has no backup to manage financial resources to manage the distributive budget.
During mid-July and mid-December this year, the government collected tax revenue worth Rs 362.58 billion. On the other hand, the expense under the heading of recurrent expenditure was Rs 363.55 billion. Although the government aims to collect Rs 52.32 billion in grant from foreign donors, the amount received under this heading was nil with half the year almost spent.
Diversifying Government Revenue
Currently, the government maintains the bases of revenue collection, internal loans and foreign assistance to manage the financial resources for state operation. “As the conventional revenue sources are not sufficient at a time when the government is facing exorbitant expenses, it is necessary to find alternative sources of funding,” said Paudel, speaking at a program on ‘Public Financial Management Strategy.’
Paudel said the public debt and expenses on the government subsidies are in an inclining trend. “However, the desired outputs have not been realized yet.”
Citing the shortfall in financial sources, the government is now drafting a five-year strategy to find alternative sources of public debt. Under the plan, the government has considered investment from international multilateral and bilateral organizations, private sector, non-resident Nepalis, green bonds and climate funds to manage financial resources to create a blended finance source.
The alternative finance source talks about generating equity from specific investors, general people or crowd funding which comprises both the types. Likewise, creation of remit funds from Nepalis residing outside the country, guarantee funds through issuing credit instruments and project funds by monetizing the assets and transactions of concerned projects and certain agencies are among other sources of alternative financing.
