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With the government struggling to strike a balance between income and expenditure throughout the year, the fiscal year 2022/23 turned out to be a disappointing one. 

The restriction on imports that stayed for the first six months of the last fiscal year badly hit the government’s income with revenue collection turning negative for the first time in the last 55 years. The government’s other two sources of income—foreign loans and grants—also remain below the target.

The revenue collection at the end of the fiscal year was even below the revised target. Initially, the government aimed to raise Rs 1403.13bn in revenue which was lowered to Rs 1180bn on May 29. However, the actual revenue collection stood at Rs 957.15bn, which is 68.21 percent of the actual target.

The deficit in revenue collection against the initial target is Rs 445.99bn. Never in history has there been such a huge gap between the initial target and the actual collection. In fact, the Department of Customs (DoC) and the Inland Revenue Department, the two major revenue collectors of the federal government, failed to achieve their target. 

The slowdown in economic activities, the decline in imports, and poor capital expenditure have contributed to poor revenue collection this year.

The Financial Comptroller General’s Office (FCGO) data shows the government’s total expenditure in the last fiscal year stood at Rs 1429.56bn.

According to Finance Ministry officials, the budget deficit exceeded Rs 500bn by the end of the fiscal year, and the government treasury account is negative by Rs 1.93bn. 

The budget deficit increased as revenue could not be collected as targeted while liabilities increased in areas of salary, pension, social security allowances, and domestic and external debts among others. 

Despite huge pressure on resources, the growth rate of the government’s expenditure (budget spending) rose to a five-year high in the fiscal year 2022/23. The budget expenditure increased by 10 percent compared to the last fiscal year.

The government, which has been able to spend about 80 percent of the total budget allocation, has succeeded in spending 85 percent of the recurrent expenditure, 61 percent of capital expenditure, and 83 percent of the financing budget.

The capital expenditure increased by eight percent in the last fiscal year. The government spent Rs 233.69bn in FY 2022/23, up from Rs 216.37bn in FY 2021/22. However, most of the capital expenditure happened in the last two months of the fiscal year. Economists term this late surge in capital spending ‘a misuse of state resources’.  The report of the Office of the Auditor General (OAG) also shows that 40 percent of the total capital expenditure takes place in Ashad (mid-June to mid-July), the last month of the fiscal year.

This pattern of spending increases the possibility of sub-standard quality of capital projects and an increase in recurrent spending, in operations and maintenance costs, for the coming years, they said.  “This also shows that the government is not maintaining fiscal discipline,” said economist Chandra Mani Adhikari. 

However, the expenditure under the financing heading that is used for debt servicing, surged by a whopping 61 percent. The government spent Rs 190bn in financing in the last fiscal year. 

With revenue collection declining by 10.37 percent, fiscal management will remain challenging for the government in the current fiscal year. The government has set a target of collecting Rs 1422bn in revenue in FY 2023/24. Given the revenue collection in the last FY, the government can meet the target if it succeeds in increasing revenue collection by 48.58 percent in the current fiscal year. 

Economist Adhikari said that the government faces a huge challenge in the new fiscal year also. “Now, the new monetary policy should take a policy direction of keeping economic activities running and vibrant,” he said. “The interest rate of loans to the productive sector should be made cheaper. This will increase economic activity and increase revenue collection.”

The price of gold has increased by Rs 300 per tola in the domestic market on Tuesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 112, 500 per tola today. It was traded at Rs 112, 200 per tola on Monday.

Meanwhile, tejabi gold is being traded at Rs 111, 950 per tola. It was traded at Rs 111, 650 per tola.

Similarly, the silver is being traded at Rs 1, 480 per tola today.

The Nepal Stock Exchange (NEPSE) gained 47.07 points to close at 2,144.16 points on Monday.

Similarly, the sensitive index surged by 9.95 points to close at 404. 10 points.

A total of 7,634,190-unit shares of 257 companies were traded for Rs 2. 56 billion.

Meanwhile, BPW Laghubitta Bittiya Sanstha Limited was the top gainer today, with its price surging by 10. 00 percent. Likewise, Kumari Dhanabriddhi Yojana was the top loser as its price fell by 8.37 percent.

At the end of the day, total market capitalization stood at Rs 3. 15 trillion.

One hundred and fifty four local bodies have not yet submitted the particulars of endorsement of their annual budget even after the start of the new fiscal year.

According to the 'Budget Update of Local Levels for Fiscal Year 2080/81' prepared by the Ministry of Federal Affairs and General Administration, 20.45 per cent of the local levels are found 'without budget' as of 2.30 pm today. The number of local levels that have passed their annual budgets until that time is 599.

The Ministry said the highest number of local levels not endorsing their budget until the start of the new fiscal year is in Madhesh Province. Sixty-three local bodies in this province have not brought their budget. The lowest number of such local bodies is in Karnali province. Only four local bodies in Karnali province have not brought their budget.

Twenty-nine local bodies in Koshi province, 24 in Bagmati province, seven in Gandaki province, 14 in Lumbini province and 13 in Sudurpaschim province have not provided information on the passage of their annual budget.

Assistant spokesperson at the Ministry of Federal Affairs and General Administration, Ashwin Kumar Pokharel said a high number of local bodies are seen not bringing their annual budget as even the municipalities that have passed their budget have not entered information about that in the Ministry's centralized system.

"Although many local bodies have passed the budget, they have not entered that in the portal. We estimate not more than 20 local bodies have not presented their budget so far," he said. The Ministry's assistant spokesperson said a circular has been sent to all the local bodies that have not entered the information about their budget in the Ministry's portal.

The Ministry, on Sunday, sent letters to all local bodies and the District Coordination Committee, urging them to update information on the presentation of the annual budget for fiscal year 2080/81 BS and the passage of the same by their respective Town or Rural Municipal Assembly.