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Kathmandu Sunday September 16, 2001 Bhadra 31, 2058.
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Internal loan increased 10 percent
Post Report
KATHMANDU, Sept 15 - Propelled by the ever increasing budget
deficit mainly due to the huge mismatch between the real realization of the revenue and
the expenditure, the government’s domestic outstanding has registered an increment of
more than 10 per cent in the last fiscal year.
According to the statistics of Nepal Rastra Bank, the total
outstanding for the domestic borrowings in the last fiscal year has increased to Rs 56.15
billion compared to Rs 50.70 billion in the previous year.
During the last fiscal year, there has been a significant
increase in total outstanding for development bonds from Rs 4.26 billion to Rs 5.96
billion - a soar of 39.88 per cent. Similarly, the outstanding for the Treasury Bills has
also shown a significant increment of 31.21 per cent that increased from Rs 21.02 billion
to Rs 27.61 billion last year.
In the like manner, the government has total domestic loan of
12.47 billion on National Savings Certificate that increased by 8.24 per cent from
previous year’s outstanding of Rs 11.52 billion.
Despite the increase in total borrowings, there has been a
noticeable decline of 27.29 per cent in the special bonds. The outstanding with the
special bonds declined from Rs 13.89 billion in the previous year to Rs 10.10 billion in
the last year. The total liability of special bonds declined last year because there was a
repayment of Rs 3.47 billion in the special bonds, said Dr Govinda Bahadur Thapa, a public
finance expert.
According to the statistics, during the last fiscal year,
government issued national savings certificates worth Rs 2.1 billion, development bonds
worth Rs 1.7 billion and treasury bills worth Rs 1.7 billion. In addition to these
borrowings, the government had taken the overdraft of Rs 5.57 billion from the Central
Bank.
Domestic borrowing is government’s one of the important
machinery of deficit financing because of being relatively easier to collect and are
reliable. As an international practice, Nepal Rastra Bank, on behalf of the government,
issues three different monetary instruments to collect the internal loans for domestic
borrowings.
Out of the total outstanding, around 85 per cent is owned by
the banking and the financial sector, while the remaining 15 per cent by the individuals.
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