The government is under pressure to lower the size of the projected expenditure for the current fiscal year, citing a massive shortfall in revenue collection.
The records with the Financial Comptroller General Office show that the government collected a total revenue worth only Rs 518 billion in the first six months of the current fiscal year. The amount is less than half of the revenue collection of Rs 1.422 trillion targeted for the fiscal year 2023/24.
On the other hand, the government spent Rs 566 billion as of mid-January. This shows that the government witnessed a negative balance of Rs 48 billion in the state treasury during the review period. Also, the state’s reserve funds have gone into negative Rs 150 million in the review period. An official at the Ministry of Finance (MoF) said the government is likely to reduce the size of the projected expenditure by around Rs 250 billion through the half-yearly review of the announced budget for the current fiscal year. “From the estimated Rs 1.751 trillion for the announced budget, the government is likely to take it down to around Rs 1.5 trillion,” said the source.
Last year, too, the government reduced the budget size by 14 percent, taking it down to Rs 1.549 trillion from Rs 1.793 trillion via the half-yearly budget review. The MoF has already formed a task force to review the half-yearly progress of budget implementation. The five-member committee is led by the chief of the Budget Division at the finance ministry, Uttar Bahadur Khatri. The committee has been mandated to study and make decisions on whether or not to give continuity to any projects, based on their progress reports. According to the MoF source, the projects that have failed to enter the tender process and award the contract even by the second-quarter end of the current fiscal year are most likely to be discontinued through the mid-term review.
Amid poor revenue collection, the government has been taking huge amounts of loans from domestic and foreign sectors. With the government utilizing the credit amount to meet its instant financial liability, the government’s public debt increased by about Rs 72 billion as of mid-December.
The country’s public debt liability had increased to Rs 2.37125 trillion. This includes an internal debt liability of Rs 1.197 trillion and an external debt liability of Rs 1.173 trillion. The reduction in the budget size is expected to check the ballooning public borrowing of the country.
Source: MyRepublica
