Government Grapples with Rising Public Debt Burden of Rs 550 Billion; Budget Struggles to Meet Financial Demands

Wed, Apr 3, 2024 1:47 PM on Latest, Economy, National,

As the principal-interest liability on public debt for the upcoming fiscal year 2081/82 BS climbs to approximately Rs 550 billion, the government finds itself grappling to arrange adequate budgetary resources.

The National Resource Estimation Committee, chaired by the Vice-Chair of the National Planning Commission, has forwarded the budget ceiling for the next fiscal year to the government. The committee's recommendation urges the government to confine the national budget within the limit of Rs 1800 billion for the upcoming fiscal year.

Outlined within this proposed ceiling are allocations of Rs 1,139.77 billion for recurrent expenses, Rs 305 billion for capital expenditure, and Rs 537.23 billion for financial management. Notably, the category of financial management primarily caters to the repayment of public debt and associated liabilities.

In a recent meeting of the Development, Economic Affairs, and Good Governance Committee under the National Assembly, NPC Vice-Chair Dr. Min Bahadur Shrestha highlighted the challenges stemming from inadequate resource assurance amidst low revenue collection and a surge in principal and interest payment obligations on public loans.

Dr. Shrestha underscored discrepancies in budget allocation, with some ministries receiving lower budget ceilings compared to the current fiscal year. Despite an apparent increase in the overall budget size, the looming debt liability for the upcoming year casts a shadow, with approximately Rs 106 billion slated to be added compared to the current fiscal year.