MoF begins mid-year budget review, warns of revenue and expenditure shortfalls

February 4, 2025, 10:25:17 AM |

KATHMANDU: The Ministry of Finance has initiated a mid-year review of the current fiscal year’s budget, analyzing the financial data of the past six months. Based on this evaluation, the ministry has concluded that both government expenditure and revenue collection targets are unlikely to be met this year.

The budget for the current fiscal year was initially prepared by former Finance Minister Dr. Prakash Sharan Mahat, while former Finance Minister Barsha Man Pun presented the budget speech. However, Finance Minister Bishnu Prasad Paudel took office during the budget approval process.

A ministry source stated, “We are preparing to complete the review by the last week of January, but it is already evident that none of the projected expenditure and revenue collection targets will be achieved. We will propose revised estimates based on the situation.”

The government’s target for this fiscal year is to spend NPR 1.86 trillion. However, in the first six months and 19 days of the year, the government has only managed to spend NPR 708.69 billion, which accounts for just 38.1% of the total expenditure target.

Breaking down the expenditure:
– Recurrent Expenditure: The target for recurrent spending is NPR 1.14 trillion, but only NPR 486.75 billion has been spent so far, reflecting a progress rate of 42.67%.

– Capital Expenditure: The government aimed to spend NPR 352.35 billion under the capital expenditure heading, but only NPR 63.06 billion has been utilized, indicating a slow progress rate of just 17.9%.

– Financial Management: Out of the NPR 367.28 billion allocated for financial management, NPR 158.87 billion has been spent, with a progress rate of 43.26%.

On the revenue side, the government set a target of collecting NPR 1.419 trillion in revenue for the fiscal year. However, as of now, only NPR 597.35 billion has been collected, achieving just 42.09% of the target.

Two of the government’s key revenue-collecting bodies—the Department of Customs and the Inland Revenue Department—are significantly lagging behind their targets. Despite Finance Minister Paudel’s insistence that revenue collection must meet the set goals, the ministry’s internal review team has already concluded that the targets are unattainable under the current circumstances.

With the fiscal year progressing, the Ministry of Finance is now focusing on revising its estimates and considering potential corrective measures to address the growing financial gap.

Fiscal Nepal |

Tuesday February 4, 2025, 10:25:17 AM |