Nepal | November 24, 2020

Govt expects economy to expand by over 2pc

Target may not be met unless efforts are made

Rupak D Sharma
Share Now:

Kathmandu, February 18

There has been resurgence in the government’s confidence with the lifting of over four-month-long border blockade, as it today said prospects of the country’s economy expanding by more than two per cent were high this fiscal year.

The government had initially set economic growth target of six per cent for this fiscal year. But as protests in the Tarai and blockade on Nepal-India border points created shortage of petroleum products, raw materials and other essentials, the government had revised the annual growth target to two per cent.

However, during today’s mid-term review of the budget, Finance Minister Bishnu Prasad Paudel said chances of annual economic growth hitting more than two per cent were high — although a statement released by the Ministry of Finance (MoF) only says ‘special efforts would be made to achieve GDP growth rate of over two per cent’.

The minister’s optimism largely stems from gradual normalisation of the supply situation.

“Also, the National Reconstruction Authority has officially come into operation, which will accelerate the pace of implementing post-earthquake reconstruction projects,” the minister said. “Gradually, capital expenditure will also rise (with easy availability of raw and construction materials), which will crowd in private investment. All this will help push up the growth rate.”

Although Minister Paudel appeared quite confident about economic growth prospects, achieving the goal may not be easy, considering presence of red tape and lethargic bureaucratic system, which fails to make delivery on time.

It has long been said that civil servants should be held accountable for failing to implement programmes announced through budget. But no one seems to be serious about this matter, while infrastructure gap is widening in the country.

To address this problem, the previous government had floated the idea of introducing a Bill on Budget Management and Fiscal Accountability and had even started drafting it, but the process has been stalled.

Today, Minister Paudel stressed on the need to introduce the law, but it is yet to be seen how far he can take
this process.

Unless serious efforts are made in this regard, most of the plans announced today by Minister Paudel will not materialise because inefficiency in the bureaucratic system, which has resulted in low fund absorptive capacity, has always worked as a stumbling block for project implementation and higher capital spending.

To expedite capital spending, Minister Paudel said, the government has already started realigning budgetary programmes. He, however, did not elaborate on the issue and did not take any question from journalists during today’s event.

He also said budget will be reallocated from one heading to the other to enable transfer of budget from defunct programmes and projects to those that are functional and in need of money. In this regard, the MoF has already directed all ministries to surrender budget that is not likely to be spent this fiscal year.

“To facilitate this process, a high-level committee established to monitor and give directions to infrastructure projects has started working,” Minister Paudel said.

With these efforts, the MoF intends to spend almost 77 per cent, or Rs 160.65 billion, of the annual capital budget of Rs 208.88 billion by the end of this fiscal year.

Overall budget utilisation is expected to stand at 85.66 per cent by the end of this fiscal, the finance minister said.

The government had earmarked total budget of Rs 819.47 billion for this fiscal. Of this amount, only Rs 179.77 billion, or 21.94 per cent, was used in the first six months of current fiscal year through mid-January.

The government’s capital expenditure, in the six-month period, stood at Rs 15 billion, or seven per cent of the total

A version of this article appears in print on February 19, 2016 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Drying habitat makes Australia's platypus vulnerable, scientists say

SYDNEY: Australian scientists pushed on Monday to list the platypus as a vulnerable species after a report showed the habitat of the semi-aquatic native mammal had shrunk more than a fifth in the last 30 years. Severe drought brought by climate change, land clearing for farming and Read More...

AstraZeneca COVID-19 vaccine can be 90% effective, results show

LONDON: AstraZeneca said on Monday its vaccine for the novel coronavirus, developed along with the University of Oxford, could be around 90% effective under one dosing regimen. "This vaccine's efficacy and safety confirm that it will be highly effective against COVID-19 and will have a Read More...

Sudurpaschim's PA session unlikely to kick off any time soon

DHANGADHI: The winter session of the provincial assembly has not commenced in Sudurpaschim Province yet. Although four months have passed since the sixth session of the assembly took place, the assembly has not been held due to lack of bills to be drafted. The last session of the assembly was Read More...

Indian Foreign Secretary Harsh Vardhan Shringla arriving on Thursday

KATHMANDU: Foreign Secretary of India Harsh Vardhan Shringla is arriving in Nepal for a two-day official visit later this week. The Ministry of Foreign Affairs stated that Shringla is coming to Nepal at the invitation of his Nepali counterpart Foreign Secretary Bharat Raj Paudyal. The Indian fore Read More...

1,980 new cases recorded on Monday; Nepal’s Covid-19 tally hits 222,288

KATHMANDU: Nepal on Monday reported 1,980 new cases of coronavirus infection from across the country. With this, the nationwide infection count has advanced to 222,288. Of the total infections, 789 are females and 1,191 are males. In the last 24 hours, 1,007 cases surfaced in Kathmandu Valley Read More...

16 more fatalities take Nepal's Covid-19 death-toll to 1,337

KATHMANDU: Sixteen more fatalities were reported in the last 24 hours with which Nepal’s Covid-19 death-tally has now advanced to 1,337. 1,980 fresh coronavirus cases as reported today took the nationwide coronavirus case count to 222,288. Over 1.3 million deaths from the disease have been r Read More...

Kathmandu valley reports 1,007 fresh Covid-19 cases on Monday

KATHMANDU: The three districts of Kathmandu Valley reported a total of 1,007 new cases of coronavirus infection on Monday. Of the new cases, 454 are females and 553 are males. As many as 779 cases were recorded in Kathmandu district alone while Lalitpur and Bhaktapur reported 143 and 85 cases Read More...

In Pictures: Health workers protest for safety

Kathmandu, November 23 Health workers staging a protest demanding personal protective equipment, safety items, and COVID-19 allowance at the premises of Bir Hospital, Kathmandu, on Monday. Photos by Naresh Shrestha for The Himalayan Times: Read More...