Bagmati Province Faces Significant Revenue Shortfall in Fiscal Year 2023/24

Bagmati Province has reported a substantial revenue shortfall for the fiscal year 2023/24, collecting Rs 9.33 billion less than its projected target. According to the Ministry of Economic Affairs and Planning, the province aimed to generate Rs 48.25 billion from various sources, including revenue distribution, internal sources, and federal grants, but only managed to collect Rs 39.22 billion.

Information Officer Suraj Poudel revealed that the province had set a goal of Rs 26.68 billion from revenue distribution but could only achieve 81.85% of that target, gathering Rs 21.84 billion. On a more positive note, the province nearly reached its internal revenue target, collecting Rs 3.662 billion, which represents 97.52% of the estimated Rs 3.755 billion.

The province also faced a shortfall in expected federal grants, receiving Rs 13.717 billion, which is only 77.01% of the anticipated Rs 17.812 billion.

This trend of revenue shortfall is not new, as the previous fiscal year 2022/23 also saw the province collecting 17% less revenue than estimated. The government had aimed for Rs 55.031 billion but only managed to collect Rs 45.088 billion. However, despite this shortfall, the total revenue collection, including last year’s cash reserve, exceeded the target by 105.45%, reaching Rs 66.127 billion, according to Hari Prasad Upadhyay, Chief of the Bagmati Province Treasury and Comptroller’s Office in Hetauda.

Upadhyay cited several factors contributing to the decline, including a decrease in VAT, income tax, natural resources mining tax, and land revenue. Additionally, the federal government’s cutbacks on certain programs due to the economic recession further exacerbated the shortfall.