Per capita debt reaches Rs 79,200
In two months, government paid interest of Rs 11.06 billion on its loans
KATHMANDU, Sept 29: The government took an additional debt of Rs 49.23 billion in the first two months of the current fiscal year amid low revenue collection and unchecked recurrent expenditure.
With a massive rise in public borrowing, the country’s per capita debt has surged to Rs 79,200, based on the total population of 29,164,578 shown by the 2021 census of Nepal published by the National Statistics Office. It shows that the debt burden increased by an additional loan of Rs 4,684 per head in the past two months. As of June end, Nepal's per capita debt was Rs 74,516.
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The records of the Public Debt Management Office (PDMO) show that the country’s debt per head increased by over Rs 10,000 in the past one year. By the end of the fiscal year 2021/22, the figure was only Rs 68,907
Nepal is one of the 46 least developed countries. According to economists, the massive rise in the country’s per capita debt is a serious matter and does not reveal the good health of the economy of countries like Nepal.
The records with Nepal Rastra Bank (NRB) show that the central bank on behalf of the government collected domestic borrowing worth Rs 44.26 billion during the review period. Of the amount, the government collected internal loans of Rs 13.06 billion during one month between mid-July and mid-August, while the remaining Rs 31.20 billion was raised in the consecutive month.
Out of the total debt of Rs 49.23 billion collected in the review months, the share of external borrowing was 4.97 billion. Of the amount, Rs 2.71 billion and Rs 2.25 billion were raised in the consecutive two months.
The government has targeted to raise public debt of Rs 55 billion in the first three months of the current fiscal year. This is mainly due to low revenue collection combined with soaring public expenditure, particularly the unproductive recurrent expense which has been straining the nation's finances.
Eight months ago, the government announced austerity measures, which, however, have been proven ineffective, as the government has failed to control its undesired expenditure. “The long foreign trips by the Prime Minister Pushpa Kamal Dahal and other high ranking political leaders and government officials with an exorbitant number of delegates are examples of the government not abiding by its own rules,” said an economist under the condition of anonymity.
In the review months, the government spent Rs 32.83 billion in debt financing of the internal borrowing. The amount was Rs 5.88 billion under the same heading for the foreign debt. Overall, the government paid an interest of Rs 11.06 billion against its borrowings.
