Kathmandu- As the size of public debt increases, the expenditure on debt service is also increasing. However, the situation of capital expenditure is seen to be weak compared to the increase in expenditure on debt and debt service. In the first six months of the current fiscal year, the government’s debt service expenditure has been three times higher than capital expenditure.

According to the Office of the Comptroller and Auditor General, the government has been able to spend Rs 56.935 billion on capital expenditure by the end of the current fiscal year. While the Public Debt Management Office shows that Rs 182.40 billion was spent on debt service during the same period.

The government has allocated Rs 50.50 billion more budget for debt service than capital expenditure for the current fiscal year. The government has targeted Rs 352.35 billion on capital expenditure in the current fiscal year. Whereas, Rs 402.85 billion had been allocated for debt service.

By mid-December, the government has spent 45.28 percent of the target, or Rs 182.4 billion, on debt service. Now, Rs 220.4 billion is yet to be spent under debt service. During this period, the government has spent Rs 149.67 billion on principal repayment and Rs 32.73 billion on interest payment.

The government has paid Rs 127.24 billion in principal repayment and Rs 27.95 billion in interest payment on internal debt. Similarly, Rs 22.42 billion in principal repayment and Rs 4.77 billion in interest payment on external debt. The amount spent on debt service is equivalent to 3.20 percent of the gross domestic product.

The government’s outstanding public debt has reached Rs 2.5 trillion. At the beginning of the current fiscal year, the total public debt was Rs 2.44 billion. By mid-December, the total public debt liability has increased by Rs 122.3 billion, reaching Rs 2.5 trillion. 36.13 billion, according to the office. Which is equivalent to 44.46 percent of the gross domestic product. The change in the exchange rate as of mid-December of this fiscal year has affected the increase in public debt by 11.61 billion rupees.

The target for mobilizing a total of 547 billion rupees of public debt was set in the current fiscal year. 240 billion rupees have been received as of mid-December. This is 43.89 percent compared to the annual target. This year, the target for mobilizing internal debt of 330 billion rupees has been raised as of mid-December, 54.86 percent or 181 billion rupees.

Similarly, the target for mobilizing external debt of 217 billion rupees has been raised by 27.20 percent or 59 billion rupees. According to the annual target, the government will be able to mobilize a total of 366 billion rupees, including 148 billion rupees of internal debt and 157 billion rupees of external debt, in the remaining 6 months.