Budget deficit exceeds Rs 340 billion

KATHMANDU, JULY 9: The budget deficit in the country has crossed Rs 340 billion. According to date of the Office of Auditor General, as of July 8 of the current fiscal year, the deficit stood at Rs 340.395 billion.   The government's total revenue income was Rs 1.01582 trillion. (The figure comprises of tax revenue amounting to Rs 888.5329 billion, non-tax revenue Rs 101.4326 billion, grants NPR 2.758 billion, and other earnings Rs 23.0967 billion).

But, the recurrent expenditure made by the government stood at a hefty Rs1.3562152 trillion. This triggered the deficit of 340.395 billion which is around 20 percent of the total budget of Rs 1.75131 trillion of this fiscal.

For the last five/ six fiscal years, the fiscal shortfalls, have hovered between an alarming 20 to 30 percent of the total budget.  It can be ascribed to factors like election-motivated public spending, frequent aberrations in governments and random resource allocation.

The above-stated amount of the recurrent expenditure is 77.44 percent of the total size for this fiscal. Yesterday alone, the government spent Rs 33.6133 billion-the highest daily expenditure in the current fiscal year. The last date of 2023/24 till when the expenditures allocated by the budget were permitted to mobilize was Monday. According to Rule 30 of the Financial Procedure and Fiscal Responsibility Regulations, 2077, except for urgent cases, such expenditure should be stopped one week before the end of the fiscal year.  

As such, the very heavy spending is termed as an act of expedience rather than of prudence. “It was done just under the pressure of showing the use of more budget by the end of the fiscal,” say experts.

Till July 8, the volume of the government's capital expenditure appears outrageously low. For the current fiscal year, Rs 302.0744 billion was earmarked for development works. Of this, Rs 172.0922 billion was spent as of Monday which is only 56.97% of the target. Officials from the Ministry of Finance state that such a situation arose because the budget was not allocated properly from the beginning. Some projects have a budget but no work has been done, while some projects are ongoing but have insufficient budgets, they say.  As much as Rs 14.4013 billion was spent on capital expenditure yesterday alone.

When it comes to the recurrent expenditure, it amounted to Rs 933.8554 billion which is 81.71 percent of the total allocation of Rs 1.14178 trillion. On Monday alone, the regular expenses of the government were to the tune of Rs 9.5823 billion.

In terms of financial management, the government spent Rs 250.2676 billion as of yesterday. This is 81.4% of the total allotment of Rs 307.4536 billion in the current fiscal year. On Monday alone, Rs 9.3597 billion was spent on financial management.

After the end of the current fiscal year, the unused budget is going to be frozen. This is not considered healthy for a poor economy as Nepal.