The government is currently grappling with a critical issue that requires immediate attention: the escalating public expenditure and resulting budget deficit. It has become evident that urgent measures are necessary to minimize government spending, as the current trajectory is unsustainable and poses a serious threat to the nation's financial stability and future development. It is imperative for the government to take decisive actions, such as restructuring bureaucracy, avoiding unnecessary expenses like large teams for foreign visits, and addressing duplications in public spending across the three tiers of government. The financial situation of the government is cause for alarm, with the budget deficit reaching a staggering Rs 397.87 billion in the last fiscal year. This is primarily due to low revenue collection combined with soaring public expenditure. This deficit, coupled with the fact that the government spent only 79.69 percent of the targeted amount, highlights significant mismanagement of resources. Similarly, the government's revenue collection stood at a mere 70.73 percent of the targeted amount, with tax collection being particularly poor at just 66.82 percent of the estimated total.
One of the major contributors to this alarming deficit is the unproductive recurrent expenses segment, which has been straining the nation's finances. The government must urgently evaluate and curtail these expenditures to ensure that resources are channeled toward productive and development-oriented sectors. The austerity measures announced six months ago have proven ineffective, as the government has failed to control its undesired expenditure. It is imperative that the government takes a more stringent approach to budget management and ensures that each expenditure is justified and aligned with the nation's priorities. Furthermore, the country's current administrative structure is inefficient and excessively burdensome. The presence of 753 local levels and seven provinces, which are almost parallel to the central administration in Kathmandu, is draining the nation's resources. Given the limited resources available, sustaining such a large bureaucratic apparatus is simply not feasible. It is crucial for the government to streamline the administrative structure and eliminate unnecessary duplications to reduce the strain on the national budget.
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Politics should be a service to the nation, not a profession. Therefore, elected officials must prioritize the welfare of the people and act in their best interests. The current financial crisis demands that politicians rise above self-interest and work towards the sustainable development of the country. It is time to reconsider if the state can provide salaries to all elected officials of such a large number of local governments. The expenses being made to sustain provincial structures are already under scrutiny. Suggestions have been made from different quarters that the number of members in our federal parliament and provincial assemblies is far too high. Fresh debates have also begun about right-sizing our security agencies. The political leadership must make tough decisions and take necessary measures to minimize expenditure and maximize revenue generation. The consequences of failing to address this pressing issue are dire. The widening gap between government receipts and public expenditure has led to an alarming increase in public debt. Nepal's public debt has more than doubled over the past five years, reaching a staggering Rs 2.200 trillion. The debt-to-GDP ratio, a critical indicator of a nation's economic health, has risen to 44.79 percent. This is an alarming figure for a country like Nepal, which faces economic challenges, and it should serve as a wake-up call for policymakers.
To effectively tackle this crisis, the government needs to implement a comprehensive plan that addresses various aspects. Firstly, there should be a thorough review and restructuring of the bureaucracy to eliminate redundancies and streamline administrative functions. This will not only reduce the burden on the national budget but also enhance efficiency and service delivery. Additionally, stringent measures must be put in place to control and rationalize public expenditure, ensuring that resources are allocated judiciously and directed towards productive sectors. Moreover, the government should focus on reviving the economy through policies that stimulate growth and attract investments. A robust and thriving economy will generate higher revenue, alleviate the burden on the national budget, and pave the way for sustainable development. The current financial crisis demands immediate attention and effective action to ensure a stable and prosperous future for Nepal. Failure to do so will perpetuate a vicious cycle of problems and hinder the country's progress. It is time for the government to demonstrate responsible leadership and steer Nepal towards a path of financial stability and sustainable development. Imposing additional taxes on citizens every year to generate more revenue to meet ever increasing unnecessary public expenditure can never be a panacea to this pressing problem.
