The government’s collection of revenue and its expenditure have both declined as of October 23 of the current fiscal year on the slowing economic activities due to the long-running banda in Tarai and unofficial embargo imposed by India.

According to the Nepal Rastra Bank (NRB), the government collected Rs 77 billion in revenue as compared to Rs 90 billion in the same period last fiscal year.

The government had targeted a growth rate of 20 percent in the revenue collection compared to the last fiscal. During the first quarter this fiscal, the collection stood at just Rs75 billion against the target of Rs 96 billion, the Finance Ministry said.

This will mount pressure on the government to meet the revenue target of Rs475 billion, after missing the revenue target last fiscal year too due to the devastating earthquake. The revenue growth has been impressive until the fiscal 2013-14.

Considering a possible delay in reconstruction activities and non-hike in tax rate, the Finance Ministry had maintained a conservative estimate of revenue collection for the current fiscal year although the National Planning Commission had proposed the revenue collection target of Rs 512 billion before the budget presentation for this fiscal year.

A Finance Ministry official said that there has been massive dip in customs revenue due to the unofficial Indian blockade, while slumped economic activities due to banda, fuel shortage and reduced supply affected the inland revenue collection.

According to the ministry, operation of major customs points, including Birgunj Dry port and Krishnanagar, have virtually remained closed for the past two months while other customs offices from Koshi to Birgunj are not operating well.

While imports of fuel, raw materials and other commercial goods have slumped due to the embargo, the country’s main industrial belt has remained closed due to banda organised by the Madhesi parties. “We are in a position where we have to offer more help instead of press taxpayers as they are suffering heavily due to the current crisis,” said the official.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex private sector body, has demanded relief package for the industrial sector.

Meanwhile, the government’s expenditure has also dropped by 10 percent compared to the last fiscal year, according to the central bank. As of October 23,  the government expenditure declined to Rs5.15 billion against Rs 5.72 billion during the same period last fiscal, as many development projects have started to feel the heat of the ongoing banda and embargo.