Kathmandu. The federal government, which has shown budgetary resources to raise Rs 217 billion external debt in the current fiscal year, has not been able to raise even half of the annual target so far. According to the report of the Public Debt Management Office till Mid-May last year, external debt worth Rs 99.20 billion has been raised. This is 45.72 percent of the annual target. On the other hand, the target of internal debt set by the government for the current fiscal year is expected to be achieved 100 percent.
The government has already raised 95.45 per cent of the annual target of internal debt by mid-May last year. In the last 11 months, around Rs 315 billion has been raised as against rs 330 billion in the current fiscal year. Most of the external debt is shown by the government as capital head i.e. budgetary source to be spent on development projects. Gopi Krishna Koirala, chief of the Public Debt Management Office, said that the foreign debt receipts are weak due to the slow progress of development projects and the inability to spend.
“It has been agreed that external loans coming from bilateral or multilateral bodies will be spent on various development projects. On the basis of the work done in the project, its payment and research will be done. Our agencies have not been able to work within the stipulated time, which has weakened the external debt receipts,” Koirala said. According to him, most of the projects where external debt is shown as the source are spent first from internal sources and then reimbursed. The external debt receipts this year have been weak as the amount of external debt commitment from donor agencies does not come directly to the government’s account but progress will be seen on the basis of the completion of the related projects.
“Most of the donor agencies do ‘project financing’ rather than budgetary support. If the project is completed, the money will come and if the work is not done, it will not come,” koirala said. As the concerned thematic ministries and subordinate bodies are responsible for the implementation of the project, the overall development expenditure is weak and not due to the weakness of any one ministry or body. As of Saturday evening, the government’s total capital expenditure was around 42 per cent of the annual target, according to data from the Office of the Controller General of Accounts.
Public debt 2.654 trillion
According to the Public Debt Management Office, the total debt outstanding by the government so far has reached Rs 2,654.68 billion. At the beginning of the current fiscal year, the total public debt was Rs 2,434.9 billion, while the government’s debt was Rs 220.58 billion till mid-May last year. The total public debt as of Mid-May is 43.47 percent of the country’s GDP.
Similarly, the share of foreign loans in the debt due to the government so far is 52.0 percent and the share of internal debt is 47.94 percent. According to the data till Mid-May last year, internal debt is Rs 1,272.53 billion and external debt is Rs 1,382.12 billion.
The government had set a target of mobilizing Rs 547 billion in public debt in the current fiscal year. A total of Rs 414.19 billion has already been disbursed as of Mid-May last year. Total public debt receipts are 75.72 percent of the annual target. In the last 11 months, Rs 329.6 0 billion has been spent on repayment of government loans. This year, the government had allocated Rs 402.85 billion to pay the principal interest.
As of Mid-May last year, Rs 223.35 billion was spent on repaying the principal of internal debt and Rs 54.37 billion on paying interest on internal loans. Similarly, rs 43.29 billion was spent on repaying the principal of external debt and Rs 8.57 billion on paying interest on external loans during the same period.
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