Government revises budget

Kathmandu, Feb. 7: The government has revised the budget for the current fiscal year 2024/25 by reducing the revenue and expenditure estimates.

The government has made public a new estimate stating that only 90.99 per cent of the initial budget for the current fiscal year 2024/25 will be spent.

Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel made the new estimate public while presenting the half-yearly budget review report in the House of Representatives on Thursday.

He has reduced the size of the budget by about Rs. 167.57 billion to Rs. 1,692.73 billion for the current fiscal year. 

It is 90.99 per cent of the initial budget tabled in May last year.

The government had presented a budget of Rs. 1,860.30 billion for the current fiscal year on May 28, 2024.

DPM Paudel said that the estimate was revised to spend 90.24 per cent (Rs. 1,029.30 billion) of recurrent expenditure, 85 per cent (Rs. 299.50 billion) of the capital expenditure and 99.09 per cent (Rs. 363.93 billion) of the financial arrangement of the initial allocations.

The government had allocated budget of Rs. 1,140.66 billion for recurrent expenditure, Rs. 352.35 billion for capital expenditure and Rs. 367.28 billion for financial arrangement for the current fiscal year.

It is estimated that around Rs. 1,475.26 billion will be arranged from government sources (revenue and domestic borrowing) Rs. 36.62 billion from foreign grants and Rs. 180.83 billion from foreign loans by the end of the current fiscal year.

The government had set a target of collecting Rs. 1,260.30 billion from revenue, Rs. 52.33 billion foreign grants, Rs. 217.67 billion foreign loans and Rs. 330 billion from domestic borrowing.

The slowdown in economic growth in neighbouring countries, geopolitical tensions and other international factors affecting the value chain, failure to expand credit as expected, and failure to improve the construction sector have all posed challenges in achieving the economic growth target, DPM Paudel said.

However, with the policy measures and reform efforts adopted by the government, as well as the balance of the external sector, adequate liquidity and the facility of low interest rates, economic activity is expected to expand and the economic growth rate is expected to be close to the target for this year, he said.

The government had set a target to achieve economic growth of 6 per cent by the current fiscal year.

DPM Paudel said that no new organisational structures or positions would be created in all government offices, regulatory bodies, and public institutions to control current expenditures.

Overall expenditure during the review period increased by 17.66 per cent compared to the same period of the previous fiscal year.