Kathmandu- The government’s domestic debt has surged to nearly Rs 1.3 trillion in the first nine months of the current fiscal year, reflecting rising fiscal pressure as revenues fail to keep pace with growing obligations.

According to data, domestic debt now stands at 22.82 percent of the country’s Gross Domestic Product (GDP). The government has already spent Rs 213 billion on domestic debt servicing, including Rs 170 billion in principal and Rs 42.84 billion in interest payments.

This fiscal year, the government aimed to raise Rs 330 billion in domestic loans. By the end of Chaitra, it had mobilized Rs 291 billion. After accounting for repayments, the net domestic borrowing amounts to Rs 131 billion.

Despite claiming that domestic loans are intended for development projects, the government has increasingly used them to finance regular expenses, citing resource constraints.

Each year’s budget includes targets for both borrowing and repayment. This year, the government planned to raise Rs 330 billion and repay around Rs 317 billion in principal and interest.

Most domestic loans are sourced from banks and financial institutions through long-term development bonds, which the central bank looks risk-free. Short-term loans—ranging from one to 12 months—are raised through treasury bills, now managed by the Public Debt Management Office in coordination with the Nepal Rastra Bank and the Ministry of Finance.

Meanwhile, the country’s external debt obligation has climbed to Rs 1.362 trillion, further adding to the government’s debt burden.