The gap between the government's income and expenditure continues to widen, with the budget deficit exceeding Rs 128 billion. According to the Financial Comptroller General Office, which tracks government expenditure and income, the gap between income and expenditure is increasing each passing day. 

The government spent Rs 835 billion until February 28, earning a total of just Rs 671 billion. As of this period, less than 50 percent of the total budget is spent. Specifically, 48.44 percent of the budget allocated under the current expenditure heading is utilized, while only 21.16 percent of the capital budget is spent. Meanwhile, 46.87 percent of the budget allocated for financial management has been used. 

The growing gap between government expenditure and income has also posed challenges to preparing the next budget. The National Planning Commission (NPC) has already set a ceiling of Rs 1900 billion for the upcoming fiscal year’s budget, which is larger than the budget for the current FY. The government had initially allocated Rs 1.86 trillion for the current fiscal year, but this amount was downsized by approximately Rs 200 billion through a mid-term review by Finance Minister Bishnu Poudel. 

While less than half of the budget allocated for the current FY has been spent, the Ministry of Finance has begun preparations for the upcoming budget.  

Shyam Prasad Bhandari, spokesperson for the Ministry of Finance, stated that the budget preparation is underway based on the ceiling provided by NPC. He explained, "The ceiling received from NPC has been comminucated to each ministry. Now, the ministries will have to prepare their plans and programs within the ceiling." 

According to him, if the U.S. continues to cut grants, there will be greater pressure on the budget. However, the Finance Ministry is exploring alternatives to American aid.

To meet the Rs 1,900 billion budget target set by the National Planning Commission (NPC) for the upcoming fiscal year, the government aims to increase foreign grants by 22 percent and foreign loans by 30 percent.

Finance Ministry officials, who are currently working on the budget, note that the government will once again have to allocate a significant amount of funds towards monsoon-related impacts. A large portion of the budget is being spent on social security programs such as pensions and old-age allowances, as well as on foreign debt obligations. 

Additionally, a significant share of the budget is being allocated to long-pending projects and national pride projects. In terms of social security, more funds are spent on these programs than on development expenditures each year, with social security now accounting for about 20 percent of the budget. 

Economist Chandraman Adhikari stresses the importance of a practical and implementable budget rather than an unrealistically large one. He argues that the past practice of including unprepared programs in the budget has been ineffective. Instead, he urges the government to prioritize well-prepared projects, cut unnecessary expenditures, and adopt financial austerity measures.