KATHMANDU, April 15: The government has not been able to collect revenue as per the target due to slowdown in economic activities, poor capital expenditure, revenue leakage, decrease in foreign trade etc. The inability to achieve the revenue target has set challenges for managing government expenditure, leading to increased reliance on internal and external loans.
In the nine months of the current fiscal year 2023/24, the revenue collection of the government fell short by Rs 318 billion than the target. This shortfall has resulted in the government spending about Rs 125 billion more than its income.
According to the Financial Comptroller General Office, only Rs 748 billion of revenue has been collected in the nine months of the current fiscal year. The government had set a target of collecting revenue of Rs 1.422 trillion in the budget allocated for the current fiscal year.
According to the government’s target, the monthly revenue collection should be Rs 118 billion on average. Taking this as a basis, the government should have collected Rs 1.066 trillion in revenue in nine months, but it has collected only Rs 750 billion during this period.
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Finance Minister Barshaman Pun has said that the internal economic indicators have not improved due to lackluster revenue collection. Although, revenue collection target was ambitious, the government failed to meet the revenue growth target, he stated during discussions with secretaries of the constitutional bodies.
The budget for the current fiscal year was brought by the then Finance Minister Prakash Sharan Mahat.
The government, through a mid-term review, revised the revenue target to Rs 1.202 trillion after falling short of the initial target of Rs 1.422 trillion. Despite spending Rs 909 billion in nine months, the government has collected only Rs 773.3 billion.
Government income includes tax revenue, non-tax revenue, foreign grants and other sources. The government has earned Rs 671 billion from tax revenue, Rs 76 billion from non-tax revenue, Rs 2 billion from foreign grants and Rs 22.23 billion from other sources. As the revenue collection is reduced, the government’s budget is also in loss. As of mid-April of the current fiscal year, the state’s treasury is at a loss of Rs 136 billion.
The shortfall in revenue is managed through public debt by the government.
The government earns income from income tax, customs duty, value added tax, excise duty, real estate registration fee, vehicle tax etc. Decrease in capital expenditure, revenue leakage, decrease in foreign trade etc. are the reasons for the decrease in revenue.
The government has been managing expenses by taking tax revenue, non-tax revenue, foreign grants and taking loans from foreign agencies and Nepal Rastra Bank. This year, the government has borrowed more than Rs 232 billion. Chief of the Public Debt Management Office, Dirgharaj Mainali, said that the government took Rs 176 billion of internal debt and Rs 56 billion of external debt up to mid-March.
“We have been raising loans according to the government's calendar,” Mainali said, “There is a need to improve expenditure and revenue management.”
The government’s capital expenditure remains weak, with only 32.24 percent spent in nine months. With three months remaining in the fiscal year, stakeholders expressed concern over spending only one-third of the allocated budget during this period.
