KATHMANDU, Dec 30: The government has started looking forward to collecting public debt by using alternative modes after facing a resource crunch in its finance due to low revenue collection compared to its exorbitant.
The government is now preparing to raise the public debt by using venture capital, project specific credit instruments, remit funds, infrastructure funds, projects incubation funds and mutual funds, among Speaking at a program on Sunday, Finance Minister Bishnu Prasad Paudel said the government is prepared to raise funds by using alternative development finance.
“In addition, the government has also considered investment from international multilateral and bilateral organizations, private sectors, non-resident Nepali, green bond and climate funds to manage financial resources for development purposes,” he said.
Public debt exceeds Rs 2.434 trillion, increasing by over Rs 30...
Almost every year, the government has been allocating only around 14 percent of the total budget in development activities. Out of the earmarked amounts, the government barely spent 65 percent effectively on construction of infrastructure. In the first five months of the current fiscal year, the government utilized only 11.58 percent of Rs 352.35 billion earmarked for development projects.
Finance Minister Paudel however stressed on the government’s priority to generate more funds than the measures to utilize the earmarked funds. “The government faces more challenges to meet the people’s aspirations towards sustainable development through mobilization of traditional means of managing developing finance just through the government revenue collection and foreign assistance,” said Paudel underlining the rationale of utilizing alternative tools to generate more financial resources.
Due to growing unproductive expenses of the government, Nepal has been facing an escalating public debt in recent days. In the first five months, the government took an additional Rs 58.31 billion, bringing the total debt to Rs 2,492.91 billion. This latest figure constitutes 43.69 per cent of the country's Gross Domestic Product.
In recent days, the government has been relying more on domestic sources to collect debt. In the review period, internal debt made up almost half of the amount of the total public debt.
Finance Secretary Mahesh Bhattarai however said that the alternative development finance measures could open up access to more financial resources to take forward the big projects related to energy, transport, education, health and utilization of arable lands.
