Published On: January 16, 2023 09:00 AM NPT By: Republica | @RepublicaNepal
KATHMANDU, Jan 16: The government’s revenue collection fell short of the total expenses by Rs 81.50 billion in the first half of the current fiscal year, which ended Saturday.
The records with the Financial Comptroller General Office (FCGO) show that the government had total receipts of Rs 494.84 billion while the total expenditure was recorded at Rs 576.34 billion. The deficit in the government’s financial transaction was due to a surge in the recurrent expenditure compared to the slow revenue collection.
During mid-July and mid-January, the government spent Rs 455.12 billion in regular expenses, which was 12 percent more than the amount allocated under the heading during the same period last year. While the administrative costs are ever growing, the revenue collection and capital spending have remained dismal.
The revenue collection fell to Rs 494.84 billion from Rs 590.13 billion in the review period. In the first six months of the current fiscal year, the revenue collection was just 33.93 percent of the annual target amount of Rs 1.403 trillion. Mainly, the revenue generated from taxes and grants were pretty low. The tax revenue was just 31.29 percent while the grant amount was just 8.66 percent of the target for the fiscal year 2022/23.
Due to the shortage of funds, the government is reported to be unable to provide cash needed even for the national level projects. "The Ministry of Finance has almost stopped releasing money for projects, showing various pretexts,” said a high ranking official at the Ministry of Energy, Water Resources and Irrigation.
The gap in the government’s expenditure and revenue collection has taken a toll also on the state’s treasury. The records with the Nepal Rastra Bank (NRB) show that cash reserves in the state coffers stood at Rs 182.43 billion as of mid-December, a free-fall from Rs 227.69 billion that the treasury had in mid-July.
What is even more worrisome is the amount in the state treasury declined by Rs 50 billion in the first five months this year. The treasury received an additional Rs 100 billion in the review period last year.
Meanwhile, the government spent only 14.05 percent of the amount allocated for development works. It means the government will have to spend around 86 percent of Rs 380.38 billion in the remaining six months if it is to achieve the targeted development for this year.
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