Budget performance bears the burnt of COVID-19

Kathmandu, Jul 16

The government budget performance has remained one of all time low due to the lockdown implemented in the wake of the coronavirus pandemic that sent most of the businesses and development projects off the operation.

The capital expenditure stood at only 47 per cent of the total development budget of Rs. 408 billion while the amount stood at 87.38 per cent in the previous fiscal year 2018/19, according to the Financial Comptroller General Officer (FCGO).

Overall budget spending in the last fiscal is 71.39 per cent that included 82.18 per cent and 69.13 per cent financing provision while the figures were 91.3 per cent and 92.4 per cent respectively.

The size of last year's budget was Rs. 1532.96 billion.

This downward trend of budget performance will have serious repercussion in the economy and as more than one and a half millions jobs have affected by the lockdown and hundreds of thousands are expected to lose their source of income permanently while many micro, cottage and small scale industries might not rehabilitate.

The lockdown was announced in March and persisted till the end of the last fiscal year 2019/20 that ended on Wednesday. As the pandemic hit the economy at the pick of development budget mobilisation, the country missed the chance and ability to utilise the budget.

In a hope to expedite the work at the national pride and other large projects and increased investment and business activities, Finance Minister Dr. Yuba Raj Khatiwada had expected to achieve 8.5 per cent economic growth in the last fiscal which has been lowered to 2.28 per cent.

The country has missed the continuity of the high-level growth achievement since 2017.

Likewise, only 71.38 per cent revenue target was met. Of the total target of Rs. 1009 billion, Rs. 700 billion was collected till July 15 which was only 69.3 per cent of the target.

Likewise, of the Rs. 102.87 billion target of non-tax revenue 91.11 per cent is achieved but only 31 per cent of grant target of Rs. 57 billion is met.

For the current fiscal year, FM Dr. Khatiwada has announced the budget of Rs. 1.47 trillion, about 3.81 per cent smaller than last year. The focus of the budget is health infrastructure, reviving the business affected by the pandemic, creating employment and maintaining social security.

Published in The Rising Nepal daily on 17 July 2020.