Struggling to maintain balance between expenditure and revenue, the government has readjusted the size of the current fiscal year budget. Presenting the mid-term review of the current fiscal year budget, Finance Minister Bishnu Poudel on Sunday, announced that the finance ministry has reduced the size of the budget by 14 percent. Struggling to manage resources, Paudel and his team decided to reduce the size of the current budget in the mid-term review. High officials at the ministry accept that due to the decrease in revenue sources and foreign grants, there is no condition to meet the expenses according to the budget size presented by the then Finance Minister Janardan Sharma. Sharma had presented a federal budget of Rs 1,793 billion for the FY 2022/23 targeting economic growth of 8 percent which economists have termed unrealistic and unachievable given the economic headwinds. The finance ministry said the budget size has to be reduced as it has increasingly become difficult to meet the budget expenses due to poor revenue collection and a decline in foreign grants.

Finance Minister Poudel reduced the size of the budget by Rs 244 billion. The budget size has been readjusted to Rs 1549.99 billion from earlier 1793.83 billion. The recurrent expenditure has been trimmed by Rs 161.31 billion and the capital expenditure by Rs 66.53 billion.

Along with the total budget size, the revenue collection target has also been revised. According to Finance Minister Poudel, the new revenue target has been set at Rs 1244.75 billion. With foreign grants declining, the ministry has revised the target of grants from Rs 55.45 billion to Rs 38.45 billion. Similarly, the target for foreign loans has been readjusted to Rs 170.53 billion from earlier Rs 242.26 billion. Even the target for internal loans has been reduced as the government now plans to raise internal borrowing of Rs 240 billion from earlier Rs 256 billion. From increasing capital expenditure, axing recurrent expenditure, and tightening revenue leakage to improving revenue collection, Poudel, in his third stint as Finance Minister, has shouldered a big responsibility to resurrect the recession-mired economy. Poudel has acknowledged that while there has been some improvement in the tourism sector, the economic growth will not be as per the target as the manufacturing sector has failed to operate to its full capacity. "Resource management has become difficult. A policy of cutting non-essential expenses has been taken," said Poudel. "The government is struggling to manage expenses for public expenditure and paying the principal and interest of the loans," he further said.

•     The size of the budget trimmed by Rs 244 billion
•     The budget size has been readjusted to Rs 1549.99 billion from earlier 1793.83 billion
•     The recurrent expenditure has been trimmed by Rs 161.31 billion and the capital expenditure by Rs 66.53 billion
•     The revenue collection target has also been revised as the new revenue target has been set at Rs 1244.75 billion
•     The target of grants was revised from Rs 55.45 billion to Rs 38.45 billion.
•     The target for foreign loans has been readjusted to Rs 170.53 billion from earlier Rs 242.26 billion.
•     Internal loans target reduced to Rs 240 billion from earlier Rs 256 billion