Kathmandu, February 19

The National Planning Commission (NPC) has said that the government’s economic growth projection of 8.5 per cent in the ongoing fiscal year is not achievable.

Addressing a meeting of the Finance Committee of the Parliament here today, NPC Vice- Chair Pushpa Raj Kandel said that the targeted growth rate of 8.5 per cent in 2019-20 fiscal year is not possible amidst slow progress in development projects and sluggish capital expenditure.

The government had projected economic growth at this level this year through the fiscal budget for 2019-20.

Even though the Ministry of Finance revised down the budget size for the ongoing fiscal year through the mid-term review of the budget last week, Finance Minister Yubaraj Khatiwada had claimed that the economy would still grow at the initially projected rate.

However, Kandel clarified that 8.5 per cent growth would not be achieved this year. “Achieving growth at this level amid sluggish capital spending and tepid progress in national pride projects is not possible. Like previous years, we failed to boost spending of development budget, which will directly hit the growth rate,” he said.

As per statistics of the Financial Comptroller General Office (FCGO), capital spending as of first seven months of the ongoing fiscal year (mid-July to mid-February) stood at 19.53 per cent or Rs 79.6 billion out of the Rs 408 billion allocated under capital expenditure.

In January, an International Monetary Fund (IMF) mission, which concluded its discussions for 2020 Article IV consultation in Nepal, had projected economic growth of six per cent in the ongoing fiscal year.

Kandel said that the economy would not grow at the expected rate without focusing on budget implementation and boosting the capital spending.

At the meeting, lawmakers lamented on the failure of comparatively stronger and stable government to boost growth and development.

Former prime minister Baburam Bhattarai said that the government should stop allocating budget for projects haphazardly.

“Budget allocation should be made based on the feasibility and necessity of the projects.

This will ensure their timely completion, which will accelerate the economic growth,” he said.

Similarly, former finance minister Surendra Pandey questioned the inability of the government to address identified problems in the economy.

“The government knows the causes behind tepid economic and development growth. However, it has failed to take necessary measures to address those bottlenecks,” he said.