KATHMANDU, June 5: At a time when the government is criticized for failing to identify sources to finance development projects in the budget announced for the next fiscal year, it has come up with the plan to establish Alternative Development Finance Mobilization Fund (ADFMF) for the purpose.
Speaking at a program on Wednesday, Finance Minister Bishnu Prasad Paudel said the government has stepped up efforts to mobilize necessary capital through ADFMF mainly for mega projects. According to him, almost all the revenue collected every year is exhausted to meet the recurrent expenditure of the government. “Likewise, it is not easy to carry out development works only via the fund raised through issuance of bonds,” Paudel added.
In its plan, the government has envisioned to set up the ADFMF with an authorized capital of Rs 100 billion and a paid-up capital of Rs 25 billion. In this regard, the government has even registered a bill at the parliament, seeking to establish legal provisions for alternative development by ensuring the effective use of fiscal instruments, including domestic and foreign investments, and addressing institutional structures to support these efforts.
Lower House approves Alternative Development Finance Mobilizati...
The government has announced its total expenditure plan of Rs 1.964 trillion for the fiscal year 2025/26. Despite facing a notable crunch in its sources, the government has allocated 5.59 percent more than the budget earmarked for the current fiscal year.
Likewise, the government has earmarked Rs 407.89 billion for development expenditure. The amount under the heading is Rs 55 billion more compared to Rs 352.35 billion for the current FY.
Of the allocated expenditure, the government has set a target to finance Rs 1.315 trillion from revenue mobilization, even though it has been struggling to meet the revenue collection target this year. Likewise, the government’s expectation to receive Rs 53.45 billion in foreign grants in the next fiscal year also seems unrealistic as the government has achieved only 31.9 percent of its target of Rs 52.32 billion this year.
The officials at the Ministry of Finance, however, say the government could meet its target in revenue collection as the ministry has committed to enforce a technology-friendly revenue system and check the revenue leakage through reform in tax administration. According to them, the grant target is also likely to be fulfilled as the amount has been fixed based on the assurance given by donor countries including India, China, Norway, the UK and Japan, among others.
