ekantipur, 13-Mar-09Finance Minister Dr. Baburam Bhattarai said on Friday that the 7 percent growth target set for the current fiscal year was most unlikely to be met due to the Koshi floods, strikes and power outages and the outbreak of bird flu.
The government had set this goal as a foundation to achieve double-digit growth within three years. Dr. Bhattarai, however, said that the government would make all-out efforts to achieve the target. Releasing the mid-term review of the budget, the finance minister added that the government would not be able to spend the entire budget allocated for the current fiscal year due to the slow pace of expenditure.
"Only Rs. 215 billion is expected to be spent this year against the budgetary allocation of Rs. 236 billion," he said. The government has been able to spend Rs. 88 billion as of March 6, with an increment of 17.5 percent.
Dr. Bhattarai said that the slow progress in spending the development budget had been the main challenge for the government. According to the Finance Ministry, the total capital expenditure during the first six months of the current fiscal year plummeted by 15.75 percent to Rs. 10.71 billion.
Dr. Bhattarai blamed the absence of local bodies and the delay in announcing the budget this year for the slow progress in development expenditure. He, however, expressed optimism that development expenditure would go up as the period of procedural activities have been completed.
However, revenue collection has been very good with a 36.2 percent growth. Revenues amounted to Rs. 79.6 billion. The government had targeted achieving a growth of 31.7 percent in revenue collection. The government aims to collect revenues worth Rs. 141.72 billion this year.
Dr. Bhattarai stated that soaring inflation, which reached 14.4 percent during the first six months of the current fiscal year as per the latest Nepal Rastra Bank report, was the major challenge before the government.
He added that the government was intensifying the process of intervening in the market by increasing the supply of goods at cheaper prices through state-owned enterprises and taking action against black marketers.
The government aims to keep inflation at 7.5 percent in the current fiscal year.
The Finance Ministry also said that foreign aid mobilisation increased by 34.6 percent to Rs. 18.51 billion this year. The government aims to obtain aid amounting to Rs. 65 billion this year. The report said that the government attained satisfactory progress in areas such as road building, fertilizer distribution, national literacy campaigns and self-employment programmes.
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