A Nu 73.989 bn budget in the time of COVID-19

As per the 2020-21 financial year budget the total budge appropriation is Nu 73.989 bn of which current expenditure is Nu 32.900 bn, capital expenditure is Nu 36.251 bn, loan repayment is 4.838 bn and lending is Nu 1.214 bn. It is 14% larger than the 2019-20 budget.
 
Projected Domestic revenue of Nu 33.189 bn is one of the lowest in recent years and is 14% lower than the previous budget due to the COVID-19 situation.
 
So bulk of resources is coming by front loading grant or donor assisted projects of Nu 20.142 bn and primarily from GoI (16.502 bn).
 
GDP growth in 2020 expected to be 1.1% down from estimated GDP of 4.6% in 2019 due to COVID-19 impact.
 
For the first time since democracy and past three plan periods the capital budget for 2020-21 at 36.251 bn is higher than the current budget of Nu 32.900 bn. Fiscal deficit or resource shortage is 7.36% coming to 15.39 bn compared to 6.18% in 2019-20 budget and the 12th plan target of 5%.
 
Given 14% revenue drop due to COVID-19, and Constitutional requirement to meet recurrent expenditure from internally the government took some cost cutting measures like postponing activation of salary indexation to next Financial Year, transfer without transfer benefits, defer monetizing Vehicle Quota option, defer LTC payment towards end of FY except for those completing terms, rationalize in-country and ex-country travels, no hiring private buildings for office space and providing current budget as block grants.
 
Debt as on 31st March 2020 stood at Nu 192.962 bn of which non hydro debt is estimated to be Nu 47.842 bn.

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