Print Edition - 2015-07-16 | MONEY
Total expenditure expected to reach 85pc of allocation
Jul 15, 2015-The government expects to be able to spend 85 percent of the total budget allocation of Rs618.1 billion for this fiscal year considering the long-standing pattern of poor expenditure, the Finance Ministry said. According to the estimate, total expenditure will amount to Rs522.68 billion.
Likewise, capital expenditure is expected to reach 74 percent of the total allocation, or Rs86.58 billion out of Rs116.75 billion. Capital expenditure is also known as development expenditure.
Expenditure under two other headings, namely recurrent, which refers to administrative expenditure, and financing, which is the government’s investment, will also not meet the expenditure target, according to the ministry.
As of July 13, total expenditure amounted to just 77 percent of the target while capital expenditure was recorded at 59 percent.
The government’s performance record with regard to mobilization of foreign aid is even worse. According to the ministry, only 51 percent of foreign grants and the same percentage of loans are expected to be mobilized during the current fiscal year.
The track record of foreign aid spending has remained poorer than that of local resources, a state of affairs which officials blame on the large number of conditions accompanying foreign aid which delays implementation of development projects.
Meanwhile, the revenue sector, which had been doing well for the past few years, ran aground in the aftermath of the earthquake as customs offices closed and economic activities shrank. As a result, revenue collection during this fiscal year is estimated to miss the target by 7 percent. Revenues are projected to reach Rs393.5 billion against the goal of Rs422.9 billion.
However, presenting the budget at Parliament on Tuesday, Finance Minister Ram Sharan Mahat
said that Nepal was among the few countries having a higher revenue to gross domestic product (GDP) ratio.
“This ratio is estimated to be above 18 percent in the current fiscal year despite the drop in revenue collection, which was only 10.4 percent 25 years ago,” he added.
Meanwhile, there have been significant changes in the country’s revenue structure.
The share of direct taxes in the government’s income has increased, and customs duty now ranks as the third largest source of revenue while it was the number one source in the past, according to the Finance Minister.
Expenditure FY 2014-15
Headings Target Expenditure
Recurrent Rs398.95b Rs339.24b
Capital Rs116.75b Rs86.58b
Financing Rs102.39b Rs96.86
Headings Target Expenditure
Grants Rs73.38b Rs37.73b
Loans Rs 49.73b Rs25.48b
Source: Budget 2015-16
Published: 16-07-2015 08:04