Nepal's Public Debt Rises Sharply Amidst Concerns Over Job Creation and Production

For a developing nation like Nepal, domestic resources alone are insufficient for infrastructure development, social development, and economic prosperity. To meet this need, the government takes on domestic and external public debt. In principle, the aim is to achieve economic growth by investing borrowed funds in productive sectors, create sufficient domestic employment, and enhance debt repayment capacity by increasing productivity. However, in Nepal's context, while the public debt figure is rapidly increasing, the results in terms of job creation and production growth have been disappointing.

Nepal's public debt has increased by more than four and a half times in the last 10 years. The rapid increase in public debt is attributed to the 2072 earthquake, rising infrastructure development costs, and the implementation of federalism. According to data from the Public Debt Management Office and the Office of the Controller General of Accounts, the public debt over the last 10 fiscal years (in billions of rupees) can be presented as follows: