May 1: The discrepancy between the government’s income and expenditure is on a continuous rise. In ten and a half months of the current fiscal year (FY 2022/23), the gap between the government's income and expenditure has deepened due to the failure in revenue collection as per the target.

According to the Ministry of Finance, the budget deficit has now reached Rs 300 billion. By mid-April this year, the government met only 50 percent of the annual target of Rs 708 billion. During the same period, the government’s expenditure reached Rs 991 billion, which is 55.27 percent of the target. This makes the budget deficit of the government stand at Rs 283 billion.

In the corresponding period of last fiscal year, the total budget deficit of the government was only Rs 53 billion. At that time, the government’s revenue collection was 70 percent of the target while the expenditure was about 54 percent.

Finance Minister Dr Prakash Sharan Mahat directed the agencies concerned to try to raise the maximum revenue, saying that the target of revenue set for the current year will not be met.

A senior official of the Ministry of Finance said that the officials of the Inland Revenue Department and the Department of Customs have been instructed to mobilize their mechanisms to collect revenue equivalent to that of last year.

“There is no situation to raise revenue according to the current year's target, the finance minister has also assessed this situation and asked to raise revenue equivalent to that of last year's,” said the official requesting anonymity.

Due to the pressure on resources management, the government has stopped grants going to the state and local levels. The Ministry of Finance, in a letter to the Financial Comptroller General Office, instructed to halt the equalization grants of Rs 23.13 billion going to the state and local governments. A meeting of the Council of Ministers on April 25 decided to send only 50 percent of the equalization grant to be released in the final installment. According to the cabinet decision, the state governments will get Rs 9.93 billion and the local level will get only Rs 13.20 billion.

Officials of the Ministry of Finance say that although the distribution of salaries and pensions and social security allowances of the employees has not stopped so far, the situation is likely to become  challenging in the future due to the pressure on the resources.

Last month, due to lack of resources, about 20,000 teachers were not paid their salaries. The finance ministry has been requested to release the budget and the teachers are likely to be paid this month.

A few days ago, former Chief Secretary Bimal Koirala had suggested the government on social media to cut expenses.