Government spending falls, revenue up

The total government spending has decreased by 2.4 per cent to Rs 29.3 billion in the first three months of fiscal year 2008-09, compared to an increase of 53.7 percent in the corresponding period last fiscal year. The reduction of such spending was due to a decline in recurrent as well as capital expenditure, according to the central bank.
In the first quarter of this fiscal year, recurrent expenditure has decreased by 13.2 per cent to Rs 18.5 billion. In the corresponding period of the previous fiscal year, recurrent expenditure had increased by 35.6 per cent. A significant amount was spent for the preparation of the Constitution Assembly (CA) election in the previous year, there was no occurrence of such expenditure in the current fiscal year pulling the account for such a decline in recurrent expenditure in the review period.
The principal repayment expenditure has also increased by 20.8 per cent to Rs 4.2 billion mainly on account of the payment of treasury bills amounting to Rs 2.8 billion, stated a report of the Nepal Rastra Bank (NRB).
However, the finance ministry led by Dr Baburam Bhattarai has been successful in revenue mobilisation that has seen a encouraging increase in the first quarter. It grew by 16 per cent to Rs 22.3 billion compared to an increase of 18.8 per cent in the corresponding period last fiscal year.
In the review period, income tax, VAT revenue and registration fee recorded a higher growth whereas customs, excise and vehicle tax revenue recorded a lower growth compared to that of the corresponding period of the previous year. Moreover, non-tax revenue witnessed a decline of 59.7 per cent. The revenue will increase more in the days to come as the government has come heavily on the open sale of liquors and started providing licence keeping track on its sale.
The government received foreign cash loans of Rs 936.7 million and foreign cash grants of Rs 2.5 billion in the first three months of 2008-09. The government had received foreign cash loans of Rs 845.7 million and foreign cash grants of Rs 1.2 billion in the corresponding period of the previous year.
The government did not mobilize any domestic borrowing in the first three months of this fiscal year, stated the report.