Gap between govt income and expenditure widening

Kathmandu, Mar. 16:The government expenses have significantly been higher than the income during the first eight months of the current fiscal year 2023/24.

According to the data of the Financial Comptroller General Office under the Ministry of Finance, due to low income, including poor revenue mobilisation, the government is facing a deficit of Rs. 138 billion during the review period.

During the first eight months of the current fiscal year, the government generated an income of Rs. 663.83 billion and spent Rs. 801.58 billion as of March 13. To make up the budget deficit, the government has been taking domestic and foreign loans.

Likewise, the government has spent only 45.77 per cent of the total budget of Rs. 1,751.31 billion of the current fiscal year in the first eight months.

Capital expenditure stands below 27 %

Of the total budget expenses, capital expenditure stands at 26.89 per cent of total allocation in the first eight months of the current fiscal year.

Of the Rs. 302 billion allocated under capital expenditure, only Rs. 81.2 billion has been spent by March 13.

Even though the rate of capital expenditure is lower than the expectation, the rate of capital expenditure is higher by 4 percentage points during the review period as compared to the corresponding period last fiscal year.

The government spent only 22.15 per cent of the capital budget (Rs. 84.25 billion) of the total allocation of Rs. 380.3 billion in the first eight months of the last fiscal year 2022/23.

The pace of development activities was affected after the government was unable to repay the dues of the contractors for the last few couple of months due to a lack of government income.

The recurrent expenditure of the government stood at 50.98 per cent (Rs. 582.10 billion) during the review period. 

The government has allocated Rs. 1,141.78 billion in the heading of recurrent expenditure for the current fiscal year.

Likewise, the government has spent Rs. 138.2 billion under the heading of financing in the first eight months of the current fiscal year. That is 44.97 per cent of the total allocation of Rs. 307.4 billion.

Through the half-yearly review of the budget, the Ministry of Finance has revised its estimate that only Rs. 1,530.26 billion will be spent in the current fiscal year. It is 87.38 per cent of the initially allocated budget.

Revenue mobilisation reaches Rs. 639 billion 

During the first eight months of the current fiscal year, the government has collected revenue less than the target.

According to the report, the revenue collection of the government stands at Rs. 639 billion. This is 44.92 per cent of the annual target.

The government has set a target to collect a revenue of Rs. 1,422.54 billion for the current fiscal year.

Even though the revenue collection of the government remained lower, the revenue collection saw a growth 

of 10 per cent in the review period as compared to the same period last fiscal year.

The government collected Rs. 582.77 billion in revenue in the first eight months of the last fiscal year. It was only 41.53 per cent of the target of Rs. 1403.14 billion for the last fiscal year.

Out of the total revenue collection, tax revenue stood at Rs. 578.67 billion or 44.33 per cent of the target and non-tax revenue at Rs. 60.37 billion or 51.57 per cent of the annual target.

Of the total revenue collection target of Rs 1,422.54 billion, Rs. 1,305.4 billion was to be collected under tax revenue and Rs. 117.06 billion under the non-tax revenue for the current fiscal year.

During the review period of the current fiscal year, only Rs. 2.75 million grant was received by the government and it is only 5.52 per cent of the annual target of the government. 

The government has estimated to collect Rs. 49.94 billion in grants this fiscal year.

However, the government has received Rs. 22.07 billion from other recipients in the first eight months of the current fiscal year.

Meanwhile, the government has revised the estimation of revenue mobilisation as well.

Due to the failure to collect the targeted revenue, the government has revised the target to Rs. 1,240 billion for this year.  

Similarly, the government has set a target of raising Rs. 49.94 billion from foreign grants, Rs. 212 billion from foreign loans and Rs. 240 billion from domestic borrowing.

Based on the expenditure till mid-March, it seems even after revising the estimate, the income and expenditure targets will not be met.