Public debt liability management: Rs 187 billion spent in six months

Kathmandu. As the country’s public debt rises every year, billions are being spent on managing the liabilities created by it.

According to the Ministry of Finance, Rs 179.12 billion has been spent on the payment of principal and interest of public loans in the first six months of the current fiscal year. The government has allocated Rs 411.01 billion for the current fiscal year to meet public debt obligations. Of this, the government has spent 53 per cent of the total budget.

According to the Ministry of Finance, a total of Rs 155.13 billion was paid in the review period, including Rs 126.76 billion as internal debt and Rs 28.37 billion as interest.

Out of this, a total of Rs 31.99 billion has been paid towards external loans, including Rs 26.13 billion and interest of Rs 5.85 billion.

Public debt has increased nearly sixfold in the last decade. The public debt had reached Rs 2674.4 billion by the end of the fiscal year 2081/82 from Rs 544.91 billion a decade ago.

Since then, public debt has been steadily rising.

Last year, the government had spent Rs 361.64 billion including principal and interest in the fiscal year 2081/82. Out of this expenditure, Rs 291.19 billion was spent on principal repayment and Rs 70.44 billion in interest payment.

Out of this, the principal payment of domestic debt stood at Rs 243.51 billion while foreign loans amounted to Rs 47.28 billion. Out of the total interest payment, the interest payment of domestic loans is Rs 60.27 billion and the interest payment of foreign loans is Rs 10.16 billion.

According to the Public Debt Management Office, the total public debt stood at Rs 2,788.53 billion in the first five months of the current fiscal year 2082/83.

We are not in the trap of debt despite our liabilities: Ministry of Finance

The Ministry of Finance believes that Nepal is still in a safe position even though its liability is increasing every year as the loan increases.

Officials at the Ministry of Finance say that the public debt is not that much and the loans taken are being utilized properly.

Tanka Pandey, spokesperson for the Ministry of Finance, said that the government has taken public loans with restraint. According to him, although other countries are in debt trap, Nepal is not at risk of debt.

Pandey said, “The government of Nepal has taken public debt and 45 percent of the GDP has been mobilized. The government’s clear approach is to take loans only for development, construction and capital expenditure, which will be used in the productive sector in the days to come and contribute to its development and prosperity.

At present, quantitatively and trendily, Nepal is not in a position of debt risk. Public debt has not been spent on unproductive sectors. The Government of Nepal is committed that such loan should not be spent in unproductive sectors. ’

According to Pandey, the government has not yet had to pay salaries and allowances to the employees by taking loans. Revenue is being used to carry out current expenditure and some development works. According to him, the government has a policy of utilizing the public loan only for development projects.