By Our Report
Amid the deepening financial crisis, the Finance Ministry has started preparing a budget for the coming fiscal year. As the new budget has to be tabled within May, the officials of the Finance Ministry have already started working on the new budget while Finance Minister Prakash Sharan Mahat has been holding discussions with the bankers as to whether the interest rates could be reduced.
The process to prepare the new budget has begun when less the 50 per cent of the budget of the current fiscal year has been spent in almost nine months.
The statistics of the Financial Comptroller General Office (FCGO), an agency under the Ministry of Finance that keeps track of the mobilisation of government revenue and expenditures, show that the government was able to spend only 47 per cent of the annual budget as of Monday, and it has to spend 53 per cent in the remaining three months and a week.
Then Finance Minister Janardan Sharma announced the budget of Rs. 1793.83 billion for the current fiscal keeping the revenue target at Rs. 1403.1 billion.
In the last 265 days, revenue collection stood at just 45.3 per cent. The government was able to collect Rs. 660.7 billion in revenue against its total target of Rs. 1458.6 billion. It has just 100 days to meet the target which means that it should collect about Rs. 8 billion in revenue in a day on average. Likewise, only 43.3 per cent of tax revenue of the total target of Rs. 1295.37 billion is collected. It has disturbed the overall revenue collection.
Likewise, the government could mobilise only 25.5 per cent of the Rs. 380.38 billion earmarked for development works by Monday, April 3.
This inability to spend the capital budget and collect revenue has negatively impacted the supply of money to the market, liquidity in the financial system of the country and payment to the contractors against their work in development projects.
Only Rs. 97.2 billion capital budget is utilised so far. In terms of financing, Rs. 89 billion (38.6 per cent of the total target of 230.2 billion) is mobilised.
This means the government has a small window to utilise a large sum of money allocated by the budget of the current fiscal year. Although Prime Minister Pushpa Kamal Dahal ‘Prachanda’ has assured the private sector that there would be an improvement in budget mobilisation and project development, and directed the newly appointed ministers to pay attention to the same, there are less chances of significant reforms from the same state machinery and procedures.
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