Only 15% foreign grants secured in first half of fiscal

Kathmandu, Jan. 19

In the first half of the current Fiscal Year 2024/25, the government managed to receive 14.8 per cent of the target set for foreign grants. It obtained Rs. 7.72 billion against the annual estimates of Rs. 52.33 billion. Interestingly, during the same period in the last FY 2023/24, there was exactly 14.8 per cent progress in grant mobilisation.

However, this year, in terms of the total amount, there was a growth of 4.8 per cent, the Ministry of Finance (MoF) informed in a press meet organised at the Singha Durbar on Sunday.

Likewise, the government has obtained Rs. 41.37 billion foreign loan which is 19 per cent of the annual target of Rs. 217.67 billion. The MoF informed that Nepal received a total of Rs. 49.09 billion in foreign assistance. But the government has obtained only 37.60 billion foreign loan – 17.7 per cent of the annual target of 212.75 billion.

Compared to the last year, this year witnessed a 10 per cent growth in foreign loans and 9.2 per cent growth in total foreign assistance.

Meanwhile, the government has received new bilateral and multilateral commitments to foreign support equivalent to Rs. 202.40 billion including Rs. 35.51 billion bilateral and 15.81 billion in multilateral grants and Rs. 151.08 billion in foreign loans.

Similarly, the government has made the largest growth in financial management in the first six months (mid-July 2024 to mid-January 2025) of this year with 98.3 per cent growth against the last year.

The MoF informed that capital expenditure remained meagre this year as well. Although there was growth of 15 per cent in terms of budgetary mobilisation compared to last year, the government could spend only 16.2 per cent of the capital allocation of Rs. 352.3 billion. Only 16.3 per cent of the annual target was met during the same period last year as well.

Government’s total budget mobilisation stands at 35.9 per cent this year while it was 32.4 per cent last year. The size of budget for this year is Rs. 1860.30 billion and Rs. 1140.66 billion earmarked for recurrent expenditure.

By mid-January, Rs. 452 billion (39.63 per cent) of recurrent budget was utilised while such progress in financing was 43.2 per cent (Rs. 158.66 billion), according to the Financial Comptroller General Office (FCGO).

Similarly, the MoF said that it has handed over the 41.8 per cent of the total budget allocated for inter-governmental transfers. Conditional grants mobilisation has witnessed 47.8 per cent progress. The federal government had handed over Rs. 112.25 billion of Rs. 234.77 billion annual estimates.

Likewise, fiscal equilisation grants witnessed 46.1 per cent progress with Rs. 68.26 billion transferred to the subnational governments. Its annual target is Rs. 148 billion.

About 32.5 per cent revenue sharing has also made during the first half of this year. In terms of amount it’s Rs. 51.74 billion against the annual target Rs. 159 billion.

Speaking on the occasion, Deputy Prime Minister and Minister for Finance, Bishnu Prasad Paudel, said that the economy has witnessed a gradual progress since his assumption of the office.

“We don’t cheat on the numbers and statistics. We present them as it is so that you can make your impression about the status of the economy,” he said to the journalists.

Stating that the government wanted to boost the confidence of private-sector investors and businesspeople, he said that the recent ordinance was issued for the same motive. 

 Published in The Rising Nepal daily on 20 January 2025.