The Income-expense Gap

As the newly formed government has taken various measures to deal with economic problems at different layers, it is now grappling with a new challenge– the negative gap between income and expenditure. Nepal has been facing budget deficit for a long time owing to the lack of adequate resources and mismanagement of available resources. Growing administrative expenditure and people’s aspirations for development has led to widening gap between the revenue collection and expenditure. There is also unscientific projection of income, irrational priorities and project selection behind the lower income higher expenditure scenario. Non-economic factors such as political instability, policy inconsistency and conflict have also caused such imbalance. We have now an administrative structure after the country adopted federalism, which also absorbs a whopping amount of national income.