October 20: The government's monthly administrative expenses have crossed over Rs 100 billion.

The government spent Rs 122 billion in current expenditure in the Nepali month of Asoj  (mid-September to mid-October).

The government has allocated Rs 1140 billion under the heading of current expenditure to meet the expenses such as employees’ salaries, administrative expenses and subsidies going to the local level.

The government spent relatively more on current expenditure in the review month. During this period, the current expenditure increased because the government provided an additional one month’s salary to the employees and pensioners as Dashain allowance.

The government’s current expenditure in the review month was more by 30 percent compared to the previous two months.

The Office of the Financial Comptroller General has informed that the current expenditure which was Rs 87.66 billion by mid-September reached Rs 210 billion on mid-October.

On the other hand, the capital expenditure has been minimal. As of mid-October, the government has spent Rs 16 billion under this heading. For the current fiscal year, the government has allocated more than Rs 300 billion as capital expenditure.

Even now, the construction entrepreneurs have not been able to get the amount of the works already completed. According to Ravi Singh, the president of the Federation of Contractors Association of Nepal, the government is yet to pay them about Rs 8 billion.

Meanwhile, the government spent Rs 14.3 billion under the heading of financial management in the review month. The amount was used for the repayment of public debt and loan investment in public institutions.

In the first three months of the current fiscal year, the government has spent Rs 49.34 billion on financial management.

As of mid-October, the budget deficit has reached Rs 47.36 billion due to low income of government compared to its expenditure. As of mid-October, the government has collected revenue of Rs 276 billion.

What is a budget deficit?

Budget deficit is usually the expenditure that is more than the income of the government. Foreign grants in Nepal are also considered part of the revenue as they do not have to be returned later. Insufficient resources other than revenue and subsidy causes a budget deficit.

The government compensates such losses through foreign and domestic loans. Governments around the world prepare deficit budgets based on the belief that development should be done even by collecting debt. However, economists say that it is not considered good for the economy to have a budget with a deficit of more than 5 percent of the GDP. In the context of Nepal, there is a tradition of preparing a budget with large amounts of deficit.