Kathmandu, February 15:

Government has revised the growth target for the current fiscal year and lowered it to 3.8 per cent from the previous five per cent.

Presenting a half-yearly budget review today at the Legislator of the Legislature-Parliament, finance minister Dr Ram Sharan Mahat blamed the readjustment to a slow growth of agriculture sector, which is re-estimated at 0.7 per cent against the preliminary estimate of 3.5 per cent.

The growth rate for non-agriculture sector has also been revised and lowered marginally at 5.7 per cent from six per cent from the preliminary estimate. The inflation rate during the first five months of the current fiscal year stood at 7.3 per cent, which is also higher than that of preliminary estimate of six per cent.

Dr Mahat also informed that Nepal’s trade deficit continues to widen and has crossed Rs 52.72 billion during the review period. During the period, the total exports declined by 0.9 per cent to Rs 26.59 billion, while the total imports surged by 8.5 per cent to Rs 79.73 billion. “The gross foreign exchange reserves of the banking system rose by 3.7 per cent to Rs 171.27 billion as of mid-December 2006, which is adequate for financing merchandise imports of 10.8 months and merchandise and service imports of 8.9 months.”

Revenue mobilisation as of the mid-January 2007 seems to be satisfactory, as it grew by 19.7 per cent to Rs 37.8 billion, he said, adding that such a growth rate is sufficient to meet the targets. In the government budgetary front, the total expenditure stood at Rs 46.55 billion, in which the current expenditure crossed Rs 32.75 billion, whereas the capital expenditure was a mere Rs 8.73 billion. The government spent Rs 5.07 billion on repayment of principal and interests.

Among the targets of budget, construction of the motorable roads to headquarters of six districts will be completed within this fiscal year, he said adding that total budget would remain at maintainable size.