KATHMANDU, Feb 19: The government has failed to mobilize foreign loans as per the target in the first seven months of the current fiscal year.
In the current fiscal year, the government, which has set a target of raising financial resources of Rs 212 billion from foreign loans, has been able to raise only Rs 42.39 billion till February 16. In comparison, the government was able to raise Rs 43.72 billion from foreign loans in the same period of the last fiscal year.
Officials from the Ministry of Finance (MoF) have cited poor progress in projects funded by foreign loans. Additionally, they have said that despite agreements with donors, the loans have not been disbursed.
"The progress in the construction of the Butwal-Narayanghat Road, Mugling-Pokhara Road, and Kamala-Kanchanpur Road is quite weak despite donor support," officials from the MoF said. "Projects that rely on domestic funding sources and receive foreign assistance should prioritize expenditure and not spend excessively on small projects. This ensures that foreign loan management is not hindered as per the agreement with donors."
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In the current fiscal year, the government has taken Rs 1.99 trillion cash loans, Rs 18.56 billion in demand loans and Rs 3.87 billion direct repayment loans.
The government gets cash loans to spend on projects of its own choice, while interbank loans and direct repayment loans are designated for specific projects.
Domestic debt rose to 65 percent of the target
Over the same seven-month period, the government has made minimal progress in mobilizing foreign loans, yet it has already reached 65 percent of its domestic debt target.
For the current fiscal year, the government aimed to raise Rs 240 billion in domestic debt.
As of February 16, Rs 155 billion has been raised, leaving Rs 85 billion to be acquired over the next five months.
Last year, the government raised Rs 53.57 billion in domestic debt by February 17.
