Failing in resource mobilisation and capital expenditure, finance minister reduces budget sizeMahat had presented the government’s budget worth Rs1.75 trillion for the fiscal 2023-24. He has now reduced its size by over Rs200 billion through a mid-term review.
Finance Minister Prakash Sharan Mahat, who had unveiled a big budget breaching the ceiling fixed by the National Planning Commission last year, has now made changes in the figures of expenditures and resource mobilisation of the financial plan.
Mahat had presented the government’s annual budget worth Rs1.75 trillion for the fiscal year 2023-24 beginning mid-July last year.
He has now reduced its size by over Rs200 billion through a mid-term review of the budget as he failed to meet the targets he himself set last year.
Now the budget size has been brought down to just over Rs1.53 trillion.
The finance minister was criticised for anomalies in budget allocation and reviving the constituency development fund against the spirit of the federal system and constitutional provisions. Also, the Supreme Court had earlier issued a stay order against the finance minister’s decision to revive the fund.
Finance Minister Mahat at a press conference on Monday admitted that he had to reduce the budget size as “there were no significant improvements despite the government’s earnest efforts to improve its revenue and expenditures.”
The government has succeeded to meet only 40 percent of its target in revenue collection as of Sunday.
“In the past, we used to import fuel-based vehicles and we used to levy up to 300 percent income tax on the import of such vehicles,” Mahat said. “As we decreased the import tax, the demand increased but the revenue we used to gain through such imports decreased drastically.”
He said the ministry estimated the possible income through all the prospective sources and that they concluded the government may not achieve the targets. “Then we decided to reduce the budget size,” Mahat said.
As of now, the government has succeeded to make only 21 percent of the capital expenditures while the recurrent expenditure has already reached 44 percent.
The minister argued that the federal government doesn’t have exclusive authority to make expenditures as per its plans like in the past.
“Now we have three layers of governments and we at the centre can’t work like in the past,” he said. “While the public has high expectations from the federal government, it doesn’t have the resources to meet them.”
He also blamed the decades-long financial practices for the failure to mobilise resources and make capital expenditures as per the plan. “It still takes years to improve the system,” he said.
The expenditures in the national pride projects is equally dismal.
He claimed despite the dismal situation so far, the government was in a position to expedite the capital expenditures in the days to come.