The government collected around Rs 297 billion during the current fiscal year against the target of mobilizing Rs 289 billion under the total budget of Rs 404.82 billion. A source at the Ministry of Finance (MoF) said the government has estimated collecting Rs 116 billion as foreign aid during the upcoming fiscal year, up from Rs 73 billion estimated for the current fiscal year. [break]
Total commitment from donor agencies reached Rs 115 billion and Rs 107 billion during the current and last fiscal years respectively. The government can mobilize domestic borrowing worth up to 5.6 percent of the total Gross Domestic Product.
“Though the budget will not be announced going beyond programs and budgets of the current fiscal year, expenses will rise, given the plans for the upcoming elections, increasing of salary by around 20 percent for over 500,000 civil servants, and new recruitments in Nepal Police and Armed Police Force,” said a high level source at the Ministry of Finance (MoF) told Republica on Thursday. Though the election government had initially announced to come up with a full-fledged budget full of new populist programs, it backtracked from its plans and opted for bringing out a budget within the limit of the current fiscal year. The National Planning Commission (NPC), the apex policy making body of the government, had already put a ceiling of Rs 506 billion for the coming fiscal year’s budget. Officials at MoF have tentatively earmarked Rs 15-18 billion for elections, Rs 3 billion for salary for 9,000 security personnel to be
recruited this year and additional burden of Rs 15 billion with the increment of salary.“Besides this, the amount for regular expenditure has to be increased by at least 10 percent keeping in view the almost double-digit inflation over the year,” added the source.
With the rise in the volume of the budget, share of recurrent expenditures has also risen significantly over the last five years. The government had allocated Rs 122.79 billion, or 57.16 percent of total budget, for recurrent expenditures during Fiscal Year 2008/09.
The amount allocated for regular expenditures jumped to Rs 279.1 billion for the fiscal year. Recurrent expenditures for the current fiscal year has hovered around 80 percent of total allocations while capital expenditures stand at around 60 percent.
Lack of timely announcement of budget and the consequent low expenditure in major development projects had tamed capital expenditures limiting the flow of government funds to market in the current fiscal year. Consequently, economic growth has been confined to 3.6 percent against the initial projection of 5.5 percent.
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