Govt posts dismal fiscal performance with only two months left for current FY

KATHMANDU, May 11: The government appears weak in accomplishing its tasks in both revenue collection and proper utilization of allocated funds, with only around two months remaining for the completion of the current fiscal year.

The records with the Financial Comptroller General Office (FCGO) show that the government collected only 64.03 percent of its annual revenue target as of Thursday. While the government collected revenue of just Rs 908.84 billion in around 10 months, it will have to generate Rs 510.46 billion in the remaining eight weeks if it is to  meet the revenue collection target of FY 2024/25.

Likewise, the government spent less than 61 percent of the targeted expenditure in the review period. According to the FCGO, the government utilized only Rs 1.13 trillion in around 10 months, out of the earmarked amount of Rs 1.86 trillion for the current FY.

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Similarly, the government spent only Rs 116.53 billion on development projects, compared to the annual target of Rs 352.35 billion. The figure shows utilization of only 33.07 percent of the earmarked amount, while Rs 235.82 billion remains to be utilized in around two months from now.

Based on the ongoing trend, the government seems likely to fail even in meeting its own revised target of expenditure. Through the mid-term budget review, the government reduced the total budget size to Rs 1.692 trillion, while the capital expenditure amount was also brought down to Rs 299.50 billion.

The soaring public debt, however, has taken a toll on the state’s financial resources. According to government records, Nepal’s public debt has crossed Rs 2.611 trillion. The government exhausted Rs 264.28 billion—more than double the capital expenditure—just to pay back the principal along with the interest amount.

Economist Keshab Acharya advised the government to endorse a realistic budget in its fiscal policy to improve its performance. Acharya emphasized the need for the government to focus on allocating the required budget with priority to selective national pride projects to complete them within the stipulated timeframe.