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Spending Capacity of the Government Weak: Stakeholders

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Spending Capacity of the Government Weak: Stakeholders
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April 19: As the government has started preparing for upcoming budget of next FY, stakeholders have expressed their concern over the weakening spending capacity of the government. The participants of an interaction program organized by Economic Policy Analysis Division of Finance Ministry in Kathmandu on April 18 expressed the concern over the government spending capacity.

According to them, failure of spending allocated budget, decreasing ratio of capital expenditure in total expenditure and current expenditure exceeding revenue collection are the issues to concern.  Dr Swarnim Wagle, member of National Planning Commission expressed his concern over the country being more remittance oriented rather than to mobilize internal resources.

As per the statistics of Finance Ministry, the ratio of government debt to gross domestic product (GDP) is at 27.4 percent whereas the ratio of foreign debt to GDP is 17 percent. Presently,the country has Rs 382 billion foreign debt. Thus, the increasing foreign debt, shrinking development expenditure and dependency on remittance has made the country reliant, said speakers.

The speakers opined that the government should prioritize saving, investment and capital formation in order to increase economic growth through promotion of productive sector in economic policy. Similarly, they stressed that the financial policy should manage the expenses and public debt except revenue collection. Likewise, economists stressed that the monetary policy should administer inflation, currency demand and foreign exchange along with financial interest rate.   

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