February 13: The government downsized the budget on Monday, giving continuity to the trend of initially presenting a sizable budget followed by adjustments through the mid-term review.

The Ministry of Finance has recalibrated the size of the current fiscal year's budget by approximately 13 percent through the mid-term review of the budget announced for FY 2023/24.

Earlier on May 29, Finance Minister Dr Prakash Sharan Mahat had unveiled a budget of Rs 1,751.31 billion. However, in the mid-term review, Finance Minister Mahat announced that the budget has been reduced to Rs 1,530.26 billion, marking a reduction of Rs 221 billion. The revised estimate accounts for 87.38 percent of the initially allocated budget.

Furthermore, the government has downscaled the budget for recurrent expenditure from Rs 1,141.78 billion to Rs 1,007.45 billion. Similarly, the budget for capital expenditure has been revised to Rs 254.13 billion from Rs 302.07 billion.

The government has also revised the revenue collection target to Rs 1309 billion from Rs 1422 billion. Finance Minister Mahat said that the government expects to receive foreign grants worth Rs 40.12 billion instead of the previously estimated grants of Rs 49.94 billion. The government has also reduced the projected foreign loans from Rs 212.75 billion to Rs 180.83 billion.

Spending in national pride projects remain poor

The mid-term review of budget has admitted the sluggish progress in the construction of large infrastructure projects, designated as national pride projects. Despite an allocation of Rs 65.64 billion for these endeavors, a mere Rs 15.55 billion has been utilized in the first half of the current fiscal year. This lackluster expenditure on national pride projects has contributed to an overall capital expenditure of only Rs 50.44 billion by mid-January 2024, representing a meager 16.70 percent of the total allocation.

According to the latest data from the Financial Comptroller General Office (FCGO), only 39 percent of the total budget has been expended by the end of the first seven months of this fiscal year. Furthermore, out of this expenditure, the capital expenditure earmarked for development comprises only 21 percent of the annual target, indicating a substantial lag in spending in this critical area.