KATHMANDU, Sept 18: The government collected revenue worth Rs 166.38 billion in the first two months of the current fiscal year, a 7.8 percent more than the amount collected in the same period in the last fiscal year.
The records with the Financial Comptroller General Office (FCGO) show that the government’s revenue collection has reached the aforementioned amount during mid-July and mid-September the current Fiscal Year 2024/25. The revenue collection was limited to Rs 154.24 billion till mid-September in Fiscal Year 2023/24.
The increase in revenue collection indicates a rise in economic activities compared to the previous year. However, the current growth rate of revenue collection does not meet the government’s expectations.
Diversifying Government Revenue
This year, the government has set a revenue collection target of Rs 1.419 trillion, which is 31.4 percent higher than the revenue collected in the previous year. The revenue collected in the review period this year accounted for only 11.72 percent of the annual target.
Based on the trend seen in the first two months, the government is likely to miss its revenue collection target for this FY too. Due to the lack of effective reform measures for revenue collection while setting ambitious goals of revenue collection, the government has been failing to meet its target in recent years.
According to the FCGO, the country has not received foreign grants in the first two months of the current fiscal year. The government has announced a target of receiving Rs 52.32 billion in foreign grants for this year.
There has also been a general improvement in government expenditure. During the review period, the government’s expenditure has reached Rs 137.55 billion, which is 7.39 percent of the annual target.
Out of the total expenditure, capital expenditure targeted for the development activities has reached Rs 14.89 billion. In the first two months of the last fiscal year, the government’s capital expenditure stood at only Rs 8.17 billion. In recent times, the Ministry of Finance has been disbursing the withheld amounts to construction entrepreneurs, which has led to an increase in capital expenditure, according to the government officials.
Despite achieving a marginal progress in the expenditure aimed for the development projects, the government is still likely to face a challenge to spend adequate capital expenditure this year too. The government has set a goal of spending Rs 352 billion in capital expenditure. The achievement in the review period was only 4.23 percent of the annual target.
Over the past one decade, the country has not achieved capital expenditure as per the government’s target. In the past two years, the records were even pathetic, with the capital expenditure being less than 70 percent.
The government is found to be spending the allocated amount rampantly mainly in the last month of almost every FY. Experts say that the failure to meet these expenditure targets and their ineffective utilization not only slows down development and construction progress but also hinders economic growth.
