The National Planning Commission (NPC) has fixed the ceiling for the budget of the fiscal year 2023/24 at Rs 1.688 trillion, which is less than the budget announced for the current fiscal year by Rs 105.43 billion.
After the government downsized the budget for FY 2022/23, adopting austerity measures due to the inadequate collection of revenue, the country’s apex planning authority lowered the ceiling of the budget. Based on the NPC’s threshold, the Ministry of Finance will prepare the budget for the next fiscal year.
According to the NPC officials, the expenditure ceiling has been fixed, making the annual budget more realistic. “Based on the challenges like decline in revenue mobilization and reduction in the size of foreign assistance, a number of poorly performing macroeconomic indicators were analyzed while fixing the budget ceiling. Most of the time, the government bodies concerned demand for more budget, however, the efficiencies to utilize the budget will be considered while formulating the budget for the next fiscal year,” reads a statement issued by the NPC.
Likewise, the soaring price of the US dollar and its possible impacts on debt financing, while an increasing debt burden on the government due to a notable rise in the domestic borrowing have also been considered while fixing the budget size for the next year.
Initially, the government had announced an expenditure of Rs 1.793 trillion for this fiscal year. Through the mid-term review two weeks ago, the government downsized the budget by Rs 244 billion, a 14 percent reduction.
The MoF officials, have time and again admitted that the country’s economy is under extreme pressure due to the low revenue collection as a result of the government’s import restrictions and the slowdown in supply chain. Citing the problem, the government has also admitted that the targeted economic growth will not be achieved this year.
By approving its mid-term expenditure plan, the NPC has projected to gain a 14 percent growth in the government revenue in the next three years. The commission has estimated that the government revenue collection will stand at Rs 1.403 trillion in the next fiscal year. Similarly, the revenue collection is expected to remain at Rs 1.606 trillion and Rs 1.831 trillion, respectively, in 2024/25 and 2025/26.
Similarly, the government is expected to mobilize foreign assistance worth Rs 201 billion, Rs 202.3 billion and Rs 207 billion in the next three years. The domestic borrowings will stand at Rs 1.688 trillion, Rs 1.880 trillion and Rs 2.088 trillion during the same period, said the NPC.
