KATHMANDU, Dec 16: The government has been struggling to make adequate expenses in development projects, but has marginally improved its revenue collection in the first five months of the current fiscal year.
The records with the Financial Comptroller General Office (FCGO) show that the government fell short of its revenue collection target between mid-July and mid-December this year. During the review period, the government collected revenue worth Rs 399.59 billion, which was 28.15 percent of its annual target of Rs 1.419 trillion.
The government had set a target to collect revenue of around Rs 118.25 billion every month. In the first five months, the government fell short of around Rs 200 billion, which it will have to manage in the coming months if it has to fulfill its annual target.
Nepal sees only 25 percent capital expenditure in first nine mo...
The revenue collection during the review period was however 10 percent more (Rs 36.17 billion in excess) than the amount that the government collected during the corresponding period last year. In the first five months of the last FY, the government had collected revenue of Rs 363.42 billion out of the annual target of Rs 1.422 trillion.
Likewise, the government’s performance appeared pathetic in capital expenditure. During the review period, the government utilized only 11.58 percent of Rs 352.35 billion earmarked for development projects for FY 2024/25, according to the FCGO.
With the country facing an increasing debt burden, the government spent Rs 151.76 billion in debt servicing which includes interest amount and principal repayment. The amount was almost four times of the capital expenditure worth Rs 40.80 billion.
The government’s capital expenditure is crucial for developing economies like Nepal, where inadequate infrastructure poses a major obstacle for both public and private sectors. According to economists, the slow capital expenditure adversely affects the cash flow, which hits the generation of employment opportunities and the targeted economic growth.
Although the government aims to collect Rs 52.32 billion in grant from foreign donors, the received amount under the heading was nil with half the year almost spent. Due to slow revenue collection and decline in grant amount, the government has been relying more on domestic and external sources of borrowings in recent days.
