With revenue collection continuing to remain poor, the mismatch between government expenditure and income has widened further. Data show the government treasury is in deficit by Rs 156 billion by mid-March 2023. According to the latest statistics of the Financial Comptroller General Office (FCGO), the government's expenditure has reached Rs 779.23 billion by mid-March while the income totaled Rs 622.78 billion. The government has been able to meet only 42.7 percent of the revenue target during the eight months of the current fiscal year while the total expenditure has reached 43.44 percent of the annual target.

The dramatic decline in revenue forced the government to trim the federal budget of Rs 1.793 trillion by 14 percent to Rs 1.549 trillion through the mid-term review of the budget.

While the recurrent expenditure has increased, development expenditure has remained dismal as before. FCGO data shows that by mid-March, government recurrent expenditure stood at 51.4 percent, capital expenditure at 22.1 percent, and fiscal management at 37.4 percent. The non-improvement in revenue collection has been a worrying factor for the government which is struggling to meet the expenses. In the eight months of the current fiscal year, revenue collection totaled Rs 582.77 billion, of which Rs 526.47 billion is tax revenue and Rs 56.29 is non-tax revenue. The decline in imports has hit the revenue collection hard. According to the Department of Customs (DoC), revenue from imports has declined by 25 percent in the eight months of the current fiscal year compared to the same period of the last fiscal year. DoC collected revenue worth Rs 250.64 billion till mid-March, which was Rs 333 billion a year ago. The country's total imports have declined by 18 percent in the review period. Nepal has imported goods worth Rs 1,057 billion in the eight months of FY 2022/23 compared to Rs 1,308 billion during the same period of FY 2021/22.