Revenue collection expected to decrease by six percent
KATHMANDU, May 29: At the joint session of the federal parliament on Monday, Finance Minister Prakash Sharan Mahat announced that Nepal’s recurrent expenditure has surpassed Rs 1.225 trillion. Additionally, revenue collection is anticipated to decline by six percent in FY 2023/24.
The aftermath of the COVID-19 pandemic, coupled with the ongoing Russia-Ukraine conflict, declining demand, and negative impacts on various economic activities, has created a formidable economic landscape for Nepal. These challenges have been further exacerbated by the depreciation of the Nepali currency, resulting in a significant increase in prices.
In the fiscal year 2022/23, the total government expenditure was estimated to be Rs 1.4 trillion, 47.51 billion accounting for 88.6 percent of the allocated budget. Of this amount, the recurrent expenditure accounted for Rs 971 billion 860 million or 91.2 percent, while the capital expenditure amounted to a little over 300 billion, representing 79.4 percent. Furthermore, it is anticipated that Rs 175.56 billion, approximately 92.7 percent, will be spent on the financial system.
In light of the economic challenges, the government has formulated the budget for the financial year 2023/24 with the slogan of "the second phase of economic reform and structural change of the economy."
Finance Minister Mahat acknowledged the economic downturn and emphasized the importance of implementing measures to stimulate growth. Last year, Nepal's economic growth rate was estimated to be 5.8 percent. However, due to the current economic challenges, this year's growth rate is expected to be only 2.16 percent, which is a significant decline.