The government collected a revenue of Rs 3.18 billion on Friday while its expenditures remained at Rs 4.35 billion.

At a time when capital expenditure is very low, the government spent more than what it earned on most days last month, raising concerns if the government will be able to sustain its expenditure with the health care spending ballooning due to the Covid-19 pandemic.

The government’s account appears to be in negative territory with the Financial Comptroller General Office showing a total expenditure of Rs165.83 billion against the revenue of Rs165.72 billion as of October 9.

But Gyanedra Poudel, spokesperson at the office, said that the treasury in reality is in a positive state because this data has not accommodated internal loans and foreign assistance.

According to him, the government has already started collecting internal loans and is working to collect Rs30 billion.

“We have also received foreign assistance but the assistance is yet to be put into the consolidated fund of the government,” he told the Post.

This shows the government’s growing reliance on internal loans and external assistance as revenue collections remain short of the target. According to the Inland Revenue Department, revenue collection through tax offices has been on par with the amount that was collected during the same period the last fiscal year.

“So far, over Rs70 billion has been collected through tax offices,” said Mukti Pandey, deputy director general at the department. The department aims to collect Rs450 billion as revenue in the current fiscal year. He believes that revenue collection would go up in the final weeks of this month (Ashwin), as taxpayers start paying Value Added Tax (VAT). Taxpayers need to pay the VAT of the previous month within 25 days of next month.

But amid decreasing imports, the Department of Customs has been struggling to collect revenue as per the target.

“Our revenue collection has been on par with the collection of last fiscal,” said Sishir Gimire, information officer at the customs department. “We have collected just over Rs80 billion so far, which is expected to reach between Rs85-Rs90 billion by the end of this quarter,” he said, adding that the target for this quarter is just over Rs 90 billion. The customs department should collect a total of Rs440 billion in the current fiscal year as per the set target.

The government has set a minimum target for customs offices and tax offices this year due to the Covid-19 pandemic.

Every year, the government depends on domestic borrowing and foreign assistance to cover the deficit of earning through revenue. But officials at the financial comptroller general office say that revenue collection used to remain higher than the expenditure in the early months of a fiscal year.

Every year, the government expenditure usually remains subdued until Dashain and Tihar festivals. It is only after the festive season that construction works pick up and so does the government expenditure. But this year, government expenditure has remained high compared to its collected revenue in early months as the first quarter of the fiscal year is about to end.

However, Poudel said that the trend in early months does not represent the whole picture of the entire fiscal year. “The government has several avenues to generate resources. There is no reason to panic,” he said.

According to him, the government’s account appears to have turned negative, as it has deducted most of the resources to be distributed to its employees and pensioners as extra salary or pension.

“As we have already deducted most of the budget for extra payment for employees and pensioners for the festival, we don’t need to be worried about whether the government staff will be able to get extra money for Dashain,” said Poudel.

According to Bhesh Prasad Bhurtel, deputy financial comptroller general at the Financial Comptroller General Office, the government on average spends around Rs9 billion in salaries for employees each month. “For Dashain, double of that amount needs to be arranged,” he said.