Bagmati Province Government's Spending and Revenue Collection Disappointing

The Bagmati Province Government's budget expenditure and revenue collection for the current fiscal year 2081/82 (2024/25) have been notably disappointing. In the eight months from Shrawan to Falgun (July to February), the provincial government has managed to spend only 25.62 percent of its total budget, while revenue collection has been limited to just 38.13 percent of the target.

According to the Ministry of Economic Affairs and Planning of the province, out of the allocated budget of NPR 64.54 billion (64 billion, 54 crore, 4 lakh, and 31 thousand) for the current fiscal year, only NPR 10.50 billion (10 billion, 50 crore, 29 lakh, and 9 thousand) has been spent in the eight-month period. This expenditure includes 35.22 percent on recurrent expenses and 19.94 percent on capital expenditure. The ministry attributes the sluggish spending to delays in project implementation and low capital expenditure. Among the ministries and entities, the Office of the Provincial Chief Attorney has led with 47.69 percent expenditure, followed by the Provincial Assembly Secretariat with 38.22 percent. Meanwhile, the Ministry of Tourism, Industry, and Cooperatives has recorded the weakest performance, spending only 9.79 percent of its budget.

Continuous Decline in Revenue Collection

The revenue collection of the Bagmati Province Government has also failed to show improvement. In the first eight months of the fiscal year, NPR 24.60 billion (24 billion, 60 crore, 66 lakh, and 45 thousand) has been collected, which is only 38.13 percent of the target. The provincial government had set a goal of collecting NPR 29.55 billion through revenue sharing, but only NPR 13.90 billion (47.03 percent) has been achieved. Similarly, out of an expected NPR 15.57 billion in grants from the federal government, NPR 8.18 billion (52.58 percent) has been received. For internal revenue sources, the target was NPR 4.53 billion, but only NPR 2.37 billion (52.41 percent) has been collected.

Historical data reflects a similar trend of underperformance. In the fiscal year 2080/81 (2023/24), the province aimed to collect NPR 48.25 billion but managed only NPR 39.22 billion. Likewise, in 2079/80 (2022/23), against a target of NPR 55.31 billion, only NPR 45.88 billion was collected.

This weak financial performance of the provincial government has raised concerns about delays in development projects and impacts on public services. Experts have suggested enhancing the effectiveness of budget implementation and adopting new strategies to boost revenue collection.