KATHMANDU: As revenue collection have fallen below the target this year due to supply disturbance, the government has made public a timetable for raising the planned internal debt.
As per the budgetary provision of the current fiscal year, the government will raise Rs88 billion in internal loans. The planned internal loan was not raised fully in the past two years due to government’s failure to spend available resources from revenue and foreign grant and loans.
The Nepal Rastra Bank (NRB), which raises internal loans on behalf of the government, has also “issue and auction calendar” for all the planned borrowing this year. Krishna Devkota, joint secretary at the Finance Ministry, said the government was considering to make all planned borrowings because of the missed revenue target and expected growth in expenditure once reconstruction activities gain momentum.
During the first six months of the current fiscal year, the government missed the revenue collection by Rs52 billion as imports slumped following the Indian embargo that lasted for over four months. The blockade has been lifted in the week of February.
Even though government’s expenditure is expected to rise in the next five months, expenditure so far has remained disappointing. According to the Financial Comptroller General Office, the capital expenditure remains at lowly 10.74 percent of allocated budget as of February 29. Overall expenditure is just 29 percent of the allocated amount. According to the Finance Ministry, its treasury still holds Rs82 billion as of Monday due low spending.
“Even though we have made public the borrowing calendar, we will also monitor the treasury before raising internal loans,” said Devkota. The government raised just Rs42.42 billion in internal loans last fiscal year against the target of Rs52.75 billion as it decided against raising internal loans considering the huge amount of unspent budget.
As per issue and auction calendar, the government will raise highest amount through development bonds (70 percent), followed by treasury bills (23.30 percent), citizen saving bonds (5.68 percent) and foreign employment bonds (0.57 percent). The development bonds being issued will have a maturity period of 8-15 years, according to the NRB.
