Kathmandu, May 13
The treasury is flush with cash, but this is no news to celebrate as experts warn that this is no good sign, apparently because this is the result of the inability to spend development budget.
“To the best of my knowledge, the cash reserve of Rs 2.7 trillion is the highest such reserve in the history of Nepal,” says Krishna Devkota, chief of the Ministry of Finance’s policy analysis division.
“Piling up of cash in the state coffers means contraction of the economy,” according to economists.
For the last fiscal 2072-73, then government had brought a budget of Rs 8.19 trillion.
The government managed to spend only 41 per cent of the budget (Rs 3.36 trillion), according to the Office of the Auditor-General.
The current fiscal will remain in two months and government authorities expect 20 per cent budget to be spent during the period.
For the current fiscal, the government had allocated Rs 2.09 billion development budget. Of this, the government has managed to spend just Rs 44 billion, which is 21 per cent of the total allocated budget.
The current expenditure is 50 per cent of the allocated budget.
Nepal Rastra Bank, the central bank of Nepal, has collected Rs 85 billion internal debt, which also remains underutilised.
According to Devkota, this is due to the lack of capacity to spend. There’s no dearth of budget sources, he says, adding: The economy is in a slump because of the inability to spend.
Experts say government should build the capacity to spend the budget in coming days.