HoR endorses Bill to Raise Public Debt, 2082 BS

Kathmandu: A session of the House of Representatives (HoR) today endorsed the Bill to Raise Public Debt, 2082 BS. Deputy Prime Minister and Minister for Finance Bishnu Prasad Paudel proposed the meeting to pass the Bill.

In his replies to concerns during the deliberation on the proposal, the Minister defended the need to raise the national debt to meet the aspiration for production and productivity growth, development and prosperity. During the discussion on the Bill, several lawmakers expressed concerns regarding the government’s approach to public debt and its use.

They stressed the need for spending borrowed funds toward capital expenditure rather than general expenses. The Minister said that parliament’s voices for raising debt solely for capital expenditure and not for general spending are welcome. He went on to say that compared to the previous fiscal year, the proposed share of expenditures financed through internal revenue has increased.

Lawmaker Dr Prakash Sharan Mahat expressed concern over the increasing size of public debt and its limited contribution to capital building. He highlighted that a significant portion of internally raised debt is currently being used for concurrent expenditures such as salaries and allowances, which he said is not a desirable practice. He urged the government to explore alternative options for mobilising internal loans more sustainably.

Another lawmaker, Hitraj Pandey, echoed these concerns, stating that government loans are not being effectively used for capital formation and development. He stressed that the growing trend of using loans to cover general expenditures is not economically welcoming.

Pandey recommended channelling internal loans into sectors such as mine exploration and resource extraction to generate long-term benefits.

Similarly, lawmaker Madhav Sapkota called for a focus on boosting internal production and capital spending. He added that internal borrowing should be based on a thorough analysis of the country’s current economic conditions and that public debt must be raised with clearly defined objectives.

Sapkota also urged the government to be transparent about the rationale behind its debt policies. Despite these recommendations, the proposed amendments to the Bill were rejected by the majority of lawmakers.

RSS