Kathmandu, October 9

The government’s committed liability has reached 59 per cent of the budget, which means the government has less room to allocate resources to sectors beyond those receiving the commitment.

According to Ministry of Finance (MoF), the government would spend 59 per cent of the budget worth Rs 1,279 billion of the current fiscal on these liabilities, namely, national security, judicial administration, federal administration, foreign affairs, domestic and foreign debt repayment, pension and gratuities, social security, share and loan investment, higher education management, reconstruction, national priority projects, election, rescue and rehabilitation in nature-induced disasters and other emergency situations.

“Increasing expenditure size under the committed liability may cause resource constraints in managing the federal government,” according to MoF officials.

As around 30 per cent of the revenue will be shared with provincial and local bodies as per provision of recently enacted Intergovernmental Fiscal Transfer Act, around Rs 200 billion of the revenue will be shared with the provincial and local governments while calculating the current revenue collection base.

On one hand, government’s committed liability has been increasing alarmingly and most of aforementioned areas need to be handled by central government, while on the other hand, revenue of central government will come down after sharing it with the provincial and local units.

The government can raise internal debt by up to five per cent of the gross domestic product (GDP). Despite this, the central government may face resource constraints to introduce new projects and programmes as its expenditure in committed liability is huge, as per officials.