Government collections exceed expenditure

Kathmandu, Apr. 22

The government has been managing its expenditure from the income it has been making.

If the trend continues at the present pace, the government does not have to borrow additional money to finance its activities and development works.

By Thursday, total receipts of the government amounted to Rs. 856.3 billion while the expenditure was Rs. 835.9 billion, according to the statistics of the Financial Comptroller General Office (FCGO) – an agency under the Ministry of Finance.

It seems that the government mechanism to collect revenue is more efficient than the agencies implementing development works and mobilising funds. The revenue collected till April 21 is 69.03 per cent of the total revenue target for the current fiscal year 2021/22 – Rs. 1240.5 billion. On the contrary, the total expenditure made so far is 51.2 per cent of the total annual estimates of Rs. 1632.8 billion.

The government collected Rs. 738.9 billion tax revenue, Rs. 62.9 billion in non-tax revenue and Rs. 13.8 billion in grants while other receipts amounted to Rs. 40.5 billion.

Rs. 522 billion borrowing space

Out of total estimated expenditure, Rs. 1,050.8 billion will be financed through revenue mobilisation and Rs. 59.92 billion through foreign grants.

"This will lead to a deficit of Rs. 522.09 billion. Out of this total deficit including the amount allocated for fiscal arrangement, Rs. 283.09 billion will be covered from foreign loan and the remaining Rs. 239 billion will be financed through domestic borrowing," Finance Minister Janardan Sharma 'Prabhakar' had said in his Replacement Bill.

He had downsized the budget of this fiscal by Rs. 15 billion to bring it to Rs. 1632.8 billion from Rs. 1647 billion which was announced by former FM Bishnu Prasad Paudel. However, the process to prepare the Replacement Bill and get it passed from the Federal Parliament took about two initial months of the year which delayed the utilisation of capital allocation.

Pathetic capital spending

However, capital expenditure is not encouraging. While about 84 days of the fiscal year are remaining, only 28.24 per cent development budget is spent which means the government could spent Rs. 106 billion of the total capital budget of Rs. 378 billion.

It means there is a pressure to spend about Rs. 3.23 billion capital allocation a day to utilise the total development funds. Average spending so far is about Rs. 377 million a day.

Experts say that there is a risk of the country witnessing the trend of poor capital spending trend of the previous year when only 64.69 per cent of the Rs. 352.9 billion development budget was utilised. Last year, 89.7 per cent of Rs. 948.9 billion recurrent budget and 58.4 per cent financing of Rs. 172.7 billion was used up.

Through the replacement bill, FM Sharma has allocated Rs. 677.99 billion (41.52 percent) for recurrent expenditure, Rs. 378.10 billion (23.16 percent) for capital expenditure and Rs. 189.44 billion (11.6 percent) for fiscal arrangement.

The budget earmarked Rs. 387.30 billion (23.72 per cent) for intergovernmental fiscal transfer to provinces and local levels.

Out of total budget allocation for fiscal transfers, Rs. 325.75 billion (84.11 per cent) was for recurrent expenditure including equalisation grant and Rs. 61.55 billion (15.89 percent) was for capital expenditure. 

 Published in The Rising Nepal daily on 23 April 2022.