HomeLOCAL NEWSNepal Trims Budget Allocation by 9%, Blames COVID-19!

Nepal Trims Budget Allocation by 9%, Blames COVID-19!

The Nepali Government slashed the budget for the current FY 2021/22 by almost 9 percent, blaming the economic slowdown amid the coronavirus pandemic.

Announcing the mid-term review of the annual budget for FY 2021/22, the government has reduced the annual expenditure target to NPR 1.34 trillion, 91.9 percent of the proposed amount of NPR 1.47 trillion.

Declaring the restructured financial allocation for the ongoing fiscal year, Finance Minister Bishnu Prasad Poudel cited the following reasons that forced the government to revise the budget:

Nepal Finance Minister Bishnu Prasad Poudel

  • Shortfall in revenue collection and public expenditure
  • Extension of the deadline of the projects
  • Delayed payments
  • Failure to resolve the issue related to the public procurement system and contractors
  • Delayed approval of the guidelines and laws related to the implementation of projects planned in the annual budget
  • Lack of coordination among the three tiers of government
  • Mid-term election of HoR
  • COVID-19 vaccination

Also Read: Nepal Tourist Arrivals 2021: 8,874 Foreigners in January!


The revised Nepal budget allocations are as follows:

  • Recurrent expenses: NPR 914.78 billion, 96.40% of proposed NPR 948.94 billion
  • Capital expenditure: NPR 283.4 billion, 80.20% of proposed NPR 352.91 billion
  • Financial management: NPR 146.86 billion, 85% of the proposed budget
  • Revenue collection: NPR 959.68 billion, 94.85% of proposed NPR 1.01 trillion

According to FM Bishnu, the expenditure from public revenue and domestic borrowing will be NPR 174.74 billion, while it will be NPR 35 billion from foreign aid and NPR 235 billion from foreign debt.

Moreover, the revenue collection during mid-July last year and mid-January this year stood at NPR 450 billion. So, the government expects to collect NPR 509.1 billion in the second half of the current FY.

The government has also withdrawn from its ambitious economic growth target of 7 percent set for this fiscal year.

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