Govt continues spending excessively in the last month

Published On: July 9, 2024 09:24 PM NPT By: Republica  | @RepublicaNepal

Around Rs 200 billion spent in just 25 days of last month of current FY

KATHMANDU, July 9: The government’s trend of spending excessive budget in the eleventh hour continued in the current fiscal year despite its commitment to reduce expenditure in the last month.

This year, the government has allocated a budget of Rs 1.751 trillion, and as of Tuesday morning, it has spent 77.44 percent of the total budget.

According to the latest data, the government spent around Rs 200 billion in the Nepali month of Asar (mid-June to mid-July) before the budget was frozen on midnight of Monday.

The government is not allowed to spend budget effective from July 9 as per a clause of the Financial Procedures and Fiscal Responsibility related regulations that requires payments to be halted one week before the end of the fiscal year. No new payments will be authorized except for bills already in the government offices awaiting clearance. 

It means that the government had 25 days to spend the budget in the last month during which the spending skyrocketed towards the end.

The government’s total expenditure has reached Rs 1.36 trillion as of Tuesday morning (July 9). On June 15, the government’s expenditures stood at Rs 1.18 trillion.  Based on this, the government spent an additional Rs 174.92 billion in the last 25 working days of the current fiscal year. 

Government spending, which stood at Rs 1.298 trillion on July 7, which increased to Rs 1.322 trillion and Rs 1.356 trillion on consecutive two days, respectively. This surge in spending reflects significant outflows on Monday, the last day of spending.

Capital expenditures surpass Rs 172 billion

The government’s capital expenditures have surpassed Rs 172 billion, accounting for 56.97 percent of the total capital budget as of July 9, according to the Financial Comptroller General Office. The government has allocated a budget of Rs 302 billion for capital expenditure in the current fiscal year.

Meanwhile, recurrent expenditure stood at 81.79 percent of the target, with Rs 933 billion already spent against a target of Rs 1.141 trillion.

Likewise, the government has spent Rs 250 billion for financial management by Tuesday morning, out of a target of Rs 307 billion.

Below revenue targets

In terms of revenue collection, the government has managed to collect Rs 989 billion as of Tuesday morning, falling short of the Rs 1.422 trillion target. This shortfall will be managed through loans and grants.

Through the mid-term review in February, the government downsized the budget for this fiscal year to Rs 1.530 trillion from Rs 1.751 trillion. In the revised estimation, the government is projected to spend 88.84 percent of the actual regular expenditure worth Rs 1.141 trillion. Similarly, the government is estimated to spend 84.13 percent of Rs 302.07 billion under capital expenditure.

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