Mid-term review: Govt downsizes budget by 14%

KATHMANDU: The government has downsized the budget for the current fiscal year by 14%.

Presenting the mid-term review of the fiscal budget in the meeting of the House of Representatives on Sunday, Minister for Finance proposed to cut the budget by Rs 244 billion.

Poudel’s predecessor at the finance ministry, Janardan Sharma, had brought a budget of Rs 1,793.83 billion for the fiscal year 2022/23.

Minister Poudel has proposed a budget of Rs 1549.99 billion which is 86.41% of the budget unveiled by former minister Sharma on May 28 last year.

He also said the revenue target has been revised downward to Rs 1,244.75 billion, down from Rs 1,341 billion in the budget for 2022/23.

Regarding expenditure, the government has reduced recurrent expenditure to Rs 1021.92 billion, capital expenditure to Rs 313.84 billion and fiscal transfers to Rs 214.21 billion.

Addressing the parliament before presenting a mid-term review of the fiscal budget, Minister Poudel said the 8% growth target was unattainable. “Although agriculture and tourism sectors have made some progress, manufacturing industries have not been able to run to their full capacity,” he said, adding: “As the government’s expenditure is higher than its revenue, economic growth won’t be as expected.”

According to Paudel, the economic recession caused by COVID-19, the global impact of the Russia-Ukraine war and the supply disruption have affected economic recovery.

Paudel said that the slowdown in economic activity and the tightening of imports have affected revenue collection. “Open borders, illegal imports, etc have also affected revenue collection,” Paudel said. “The government is aware of this and is trying to solve the problem.”

He also informed that the government has cut non-essential expenses due to problems in resource management due to its current and long-term obligations. “I have decided to cut expenses by about 20%,” he added.

Finance Minister Poudel has promised to take the initiative and take the trust of the private sector to solve the problems in the economy.