The protracted lockdown has adversely impacted the government’s income. The data related to revenue collection of the last two and a half months shows drying of major source of income leading to difficulties to sustain expenditures for the government.  

According to the Financial Comptroller General Office (FGCO), the revenue collection from March 24 to June 5 has amounted to Rs 62.98 billion. Similarly, the spending from the government coffers during the period totaled Rs 1.95 billion. The government’s revenue account, which had surplus of Rs 100 billion before the start of the lockdown in March 24, now has surplus of Rs 5.27 billion. FGCO data shows that only about 60 percent of the revenue collection target set for the current fiscal year has been met till June 5.

“Mandatory liabilities of the government such as payments related to employees’ salaries, pension and gratuity, social security allowances and principal and interest payment of foreign borrowings have continued till now. However, the situation will be different if lockdown continues to impact on revenue collection,” said Financial Comptroller Genaral Gopinath Mainali. He suggested the government to change the modality of the lockdown to restart the economic activities that have remained halted for the last two and a half months and make the revenue collection effective. “Though there is not much pressure currently regarding the revenue collection, the government may be finds itself surrounded by big difficulties over the next two months if the lockdown continues,” warned Mainali.

All three levels of the government have spent Rs 10 billion for prevention and control of coronavirus. According to Narayan Prasad Bidari, secretary at the Office of the Prime Minister, the money was used to buy medical equipment and necessary items, quarantine management and distribution of relief materials to the poor people. However, the government has been criticized for lack of transparency regarding the expenses related to prevention and control of coronavirus. Economist Keshav Acharya said that the results have not been as claimed by the government.

Acharya said that the government now needs to lift the lockdown in a careful manner. “Industries should be allowed to open on the condition that the owners ensure high level of health safety at the workplaces. To keep the economic activities closed for a long time has repercussions to both the private sector and the government,” he opined. According to Acharya, the government needs to be frugal as the Covid-19 crisis has put a serious dent on its income sources.