A budget deficit of over Rs 69 billion in five months

KATHMANDU, DECEMBER 18: The fiscal year 2023-24 in Nepal is witnessing a worrying trend with the government’s expenditures surpassing income, leading to a budget deficit. A recent analysis by the Office of Auditor General reveals the fiscal imbalance, raising questions about financial management and revenue targets.

The government’s expenditures in the first five months of the current fiscal year have exceeded income, creating a budget deficit. Income constitutes 26.07 percent of the annual target, while expenditures make up 25.87 percent in the first five months of the fiscal year.

The government had announced a total budget of Rs 1751.31 billion for the current fiscal year. Expenditures from mid-July to mid-December this fiscal amounted to around Rs 453 billion, with current expenditure, fiscal management, and capital expenditures accounting for significant portions.

Capital expenditure, allocated at Rs 1141.78 billion, has seen spending of Rs 359.99 billion, indicating slower utilization. Expenditure under fiscal management, with a total allocation of Rs 300.07 billion, is at Rs 56.94 billion.

Revenue collection has not met the target during the review period, with only 26.07 percent of the annual target achieved. The government aims to collect Rs 1472 billion in total revenue for the fiscal year. Tax revenue collection is at Rs 337 billion or 25.83 percent of the annual target. Non-tax revenue collection is Rs 26 billion, representing 22.42 percent of the annual target.

The government has taken foreign loans amounting to Rs 2 billion and 758 million until December 16 of the current fiscal year.

The analysis indicates a budget deficit of more than Rs 69 billion from mid-July to mid-December this fiscal with expenditures exceeding income. The government targets Rs 1305 billion from tax revenue, Rs 117 billion from non-tax revenue, and aims to raise Rs 49 billion through foreign grants.