Public debt surpasses Rs 2 trillion 173 billion

KATHMANDU, June 21: Nepal's public debt liability has exceeded Rs 2 trillion and173 billion. 

As per the statistic presented by the Public Debt Management Office, Nepal has been obliged to pay its public debt amounting to over Rs 1 trillion 99 billion 720 million towards internal debt and over Rs 1 trillion 73 billion 520 million towards external debt as of May 15 of the current fiscal year 2023/24.

These statistics were unveiled at a time when issues were being raised in the parliament that the deficit budget is introduced, the public debt would continue increasing and thereby further increasing the burden of obligation to pay the principle and interest in the annual budget of the government. 

The government has set a target of collecting an additional Rs 452.75 billion of loans to meet the budget deficit for the upcoming fiscal year out of which Rs 240 billion is aimed to be collected through internal and Rs 212.75 billion through external loans. 

Nepal's public debt liability was Rs 2 trillion 13 billion 296 million 640 thousand until mid-July last year when the current fiscal year 2023/24 had begun. Public debt amounting to Rs 159 billion 950 million and 800 thousand was added to the country's debt portfolio in the last 11 months of the current fiscal year.

Similarly, the ratio of public debt in the GDP appeared to be Rs 44.79 percent while considering Nepal's Gross Domestic Production (GDP) as Rs 4 trillion 851 billion 620 million.

Parliamentarians have been raising the issue in the parliament that the increasing ratio of the public debt to the GDP and the low capital formation was weakening the economic growth rate in the country and thereby spurring the likelihood of economic crisis in the country in the coming days.

According to the Public Debt Management Office, the government has raised the public debt of Rs 300.06 billion in the last 11 months of the current fiscal year while it has paid principal interest amounting to Rs 205 billion 170 million in the corresponding period. 

As of May 15 of the current fiscal year, the government spending in the repayment of principal and interest on public debt exceeded the capital expenditure by around Rs 52.08 billion. The government has spent Rs 153 billion 80 million as capital expenditure in the corresponding period. 

This way, when the revenue collection of the government has hit a low, the budget deficit was met by rising loans the low/dismal revenue collection. On the other hand, as the principle and interest of the loans were increasing every year, a large part of the annual budget was being spent on it. 

As per the latest census unveiled by the Central Bureau of Statistics in 2021, the total population of Nepal is 29,164,778. Comparing the total public debt with the total population, the per capita debt comes to be Rs 74,516.