Govt took additional debt of Rs 106.78 billion during mid-July and mid-October this FY

Published On: October 19, 2023 09:11 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, Oct 19: The government took borrowing worth Rs 106.78 billion in the first three months of the current fiscal year.

The government falling under pressure to manage its financial liabilities amid slow growth in revenue collection, has been considering taking more borrowing. Unlike previous years when the government used to take fewer amounts of loans in the first quarter, the borrowed amount in the review period this year is excessively high according to the records maintained by the Public Debt Management Office (PDMO).

The aforementioned amount of loans makes around one-fourth of the total amount that the government had targeted to borrow for the current fiscal year 2023/24. Through the budget announcement, the government had projected to take a total debt of Rs 452 billions the current fiscal year.

Of the total amount, the government has raised Rs 97.31 billion through domestic borrowing. The remaining Rs 9.47 billion was generated from the foreign sector.

Government officials said during the month between mid-September and mid-October, the government is under pressure to provide a large chunk of money in social security benefits including Dashain allowance, which triggered the recurrent expenditure of the government. According to the PDMO, the government borrowed Rs 55.43 billion in just one month this year.

The records with the Financial Comptroller General Office show that the government spent a total of Rs 280.57 billion during the review period, while it generated only Rs 234.63 billion in total receipts. This shows a shortfall of Rs 45.94 billion to meet the expenditure compared to its receipts.

The government spent Rs 67.70 billion in debt financing to clear old and new loan amounts. Out of this, Rs 42.84 billion was spent for domestic loans, while Rs 13.71 billion was paid in financing of external debt.

With an expanding budget deficit, the burden of public debt has also gone up. According to the PDMO, Nepal’s public debt has reached Rs 2.354 trillion, around 44 percent of the country’s GDP.