March 18: The government, which has failed to spend development budget right from the beginning of the current fiscal year, has apparently succeeded in revenue collection.

The government’s failure in capital expenditure has not only deprived the people of timely development but has also created a crisis in the economy as a whole.

Banks and financial institutions have not been able to extend credit due to lack of liquidity.

As a result, industries and businesses have been struggling due to lack of capital.

Although the government had announced capital budget of Rs 378 billion for the current fiscal year, it has been able to spend only Rs 80 for development works. So far, only 20.73 percent of the allocated capital budget has been spent on development. On the other hand, revenue collection has been encouraging during this period. The government has been able to meet its revenue collection target within the first eight months of the current fiscal year.

The Department of Customs and the Inland Revenue Department, which are the bodies responsible to collect revenue, have succeeded in collecting revenue as per their target. According to the Department of Customs, it has collected revenue worth Rs 41.19 billion in the eighth month of FY 2078/79 alone. The target for the month was Rs 45.08 billion. This is 91 percent of the target. According to the director of the department, Punya Bikram Khadka, the revenue collection has reached almost Rs 349 billion so far during this fiscal year. The target for the same period was Rs 350 billion.

The Inland Revenue Department has also raised revenue close to the target. According to the department, revenue worth Rs 28.37 billion has been collected in the current fiscal year. The department had set a target of collecting Rs 28.72 billion from income tax, VAT, and excise duty by mid-February. According to the Financial Comptroller General’s Office, the government has already collected revenue worth Rs 684 billion so far.

According to Deputy Financial Comptroller General Nawaraj Dhungana, revenue collection is 58 percent of the overall target. Finance Minister Janardan Sharma has been repeatedly instructing the departmental officials to increase development expenditure and collect revenue as per the target.

According to an official of the Inland Revenue Department, even though they have met the revenue collection target so far, it cannot be said whether they will be able to meet the annual target or not. 

Ravi Singh, the newly elected president of the Federation of Contractors Association of Nepal (FCAN), shared that the government is responsible for the poor capital expenditure.

According to him, the problem has arisen due to the delays in bidding of the development work and not creating a conducive environment for work.

He is of the view that the Public Procurement Act and regulations are also an obstacle for the weak development expenditure.

According to Singh, the recent rise in fuel prices has also affected development work. He argues that this will increase the cost of the project.

Former Vice-Chairman of the National Planning Commission Dr Pushparaj Kandel said that the government is dishonest towards the people as it has been collecting revenue but is not able to spend the development budget. He said that the government should mobilize the taxes collected from the citizens for development in a timely manner for the benefit of the people.

He is of the view that the lack of development expenditure is due to some policy issues and also due to some political interests. Former vice-chairman of the commission Kandel says that the current government has stopped some of the plans and programs brought by the previous government due to its vested interests.