Development expenditures improves

Kathmandu, Sept. 30

Mobilisation of development budget has been improved in the current fiscal year 2022/23, although it has not been on par with the generally expected size.

The government has spent Rs. 17.63 billion – about 4.64 per cent – of the total Rs. 380.38 billion capital allocation by Thursday, September 29, according to the statistics of the Financial Comptroller General Office (FCGO). In the same period last year, only 1.01 per cent was spent of the Rs. 378.09 billion capital budget.

Likewise, with the increased spending on election preparation and management, recurrent expenditure has also reached 16.3 per cent. Finance Minister Janardan Sharma had earmarked Rs. 1,183.2 billion for recurrent expenditure, of which Rs. 192.8 billion has been spent.

Recurrent expenditure in the same period last year was Rs. 97.8 billion from the total allocation of Rs. 1065.2 billion, FCGO reported. This is about 9.19 per cent of the total allocation.

However, financing budget, earmarked for government investment and debt servicing has been lower this year compared to last year. Rs. 25.39 billion is spent for financing this year against Rs. 30.8 billion last year.

The government has spent 13.15 per cent budget from the treasury in about two and a half months of this fiscal year against 8.11 per cent in FY 2020/21. The size of budget this year is Rs. 1793.83 billion while it was Rs. 1632.82 billion last year.

But revenue collection has plummeted this year both in terms of amount and percentage. There was a collection of Rs. 167.02 billion by Thursday which is 11.9 per cent of the total target for this fiscal year. In the budget of the current FY 2022/23, FM Sharma had announced the target of collecting Rs. 1403.14 billon in revenue with 1295.3 billion in tax revenue, Rs. 107.7 billion in non-tax revenue and Rs. 55.4 billion in grants.

Revenue collection during the same period last year was Rs. 198.6 billion, about 16.8 per cent of Rs. 1180.6 billion target.

While the political wranglings about whether to wholly accept the budget presented by the erstwhile KP Sharma Oli led government or replace it fully or partially with a replacement bill had disturbed the implementation of the budget for the first two months of the FY 2020/21. The mobilsation of the development budget was one of the poorest in decades that year with the use of about 55 per cent of the total allocation.

According to the experts, poor government expenditure was one of the major causes of the liquidity crisis that the country has been witnessing for the last many months. 

Published in The Rising Nepal daily on 1 October 2022.