Himalayan News Service

Kathmandu, July 17:

Senior officials of the government today admitted that projecting 4.5 per cent gross domestic product (GDP) growth for the next fiscal year, against a meagre two per cent last fiscal year, is a great challenge at a time when the capital expenditure is not being spent because of increased conflict. However, the prediction is based on the hope that some non-agriculture sectors might perform well pushing the economic growth upwards. Finance Minister Madhukar

SJB Rana today said that the budget has basically focused on a vision of a new Nepal that is aimed to be developed as a transit economy thereby reaping huge advantages. The budget aims at effective reforms in the national economy. “While mobilizing resources, the government is empowering the local community and making the private sector strong for sustained economic development,” said Rana.

“The budget has focused on peace restoration, which will help in maintaining peace in the country,” he said adding that the government would act soon to take action against wilful defaulters as per Dr Shankar Sharma’s report. However, presently the banks are negotiating with wilful defaulters, he informed. Regarding the possible hike of petroleum products, Rana said, “as per the conditions set by World Bank and IMF, the price of petroleum products should be flexible in the free market economy, and we also think so.” Dr Shankar Sharma, vice-chairman of the National Planning Commission (NPC) said that achieving 4.5 per cent economic growth is a challenge at the present case scenario. “However, we expect that agriculture growth rate will go up while non-agriculture sector such as export of garment, tourism and other will also see sound performance,” he said, “Import trade will also increase hopefully.”

“The devolution and participation of local community in the development sectors will help increase development activities,” Sharma said. Talking about the possibility of increment in foreign loans and grants, Sharma expressed hopes that if we could fulfil our commitments set by donors, we would get foreign aid and grants. Bhanu Prasad Acharya, finance secretary,

on the occasion, commented that the government will get foreign grants and loans from the donors as DANIDA, KFW, Japan, World Bank and other donors have already committed. We need not worry about the foreign grants and loans, which are our major budget sources,” he said adding, “even the revenue will grow by over 14 per cent to meet our resources.” Meanwhile, Nepal Flour Mills Association, in a press release, has asked the government to completely abolish VAT on all agro-based products and the flour especially. “We urge the government to abolish VAT completely, ” the press release reads.