Presenting a fact paper on the economic situation facing the country at the reinstated House of Representatives today, Minister of Finance Janardan Sharma pointed at the 'earlier trends' of announcing huge federal budgets without considering the status of the treasury, which has resulted in the national coffers running a deficit of Rs 143 billion.

The finance minister also announced that he would present a replacement bill to address the shortcomings of the federal budget by encompassing the concerns related to the coronavirus situation, policies, and priorities of the Sher Bahadur Deuba-led government, public aspirations, as well as the common minimum programme finalised by the coalition parties.

It is to be noted that the erstwhile finance minister Bishnu Paudel of the caretaker government led by KP Sharma Oli had announced the federal budget for the fiscal 2021-22 through an ordinance on May 29, a week after the prime minister dissolved the Parliament.

"The parties in the coalition government will discuss the issues and prepare a replacement bill, thereby amending the shortcomings," Sharma said.

He said because of the adverse effects of the pandemic, the country is unlikely to have met the target of seven per cent economic growth in the last fiscal, which ended in mid-July.

The fact paper further revealed that the consumption-to-GDP ratio, which was 87 per cent in the fiscal 2016-17, is estimated to have gone up to 93.4 per cent in the fiscal 2020-21.

Similarly, the household savings-to- GDP ratio is estimated to have slumped to 6.6 per cent in the last fiscal from 13 per cent in the fiscal 2016-17. Moreover, the ratio of national savings-to-GDP, which had stood at 41.7 per cent in fiscal 2016-17 is estimated to have dropped to 31.4 per cent in the fiscal 2020-21.

Stating that 18.7 per cent population of the country is still under the poverty line and more people are at the risk of falling into that category due to the COVID-19 pandemic, the finance minister said, "Policy-level reforms are necessary to improve the situation of such vulnerable citizens."

Minister Sharma said the country had procured 10 million COVID-19 vaccines till date and the government would give top priority to managing vaccines.

He said he had released Rs 5 billion to procure vaccines on the very first day of assuming the portfolio of finance minister and that the government was preparing to introduce an economic package for those affected by COVID-19.

Sharma also vowed to control rampant price hikes, increase capital expenditure, and accelerate the fiscal activities in the country. In a nod to the country's weak production base and the burgeoning trade deficit, the minister said the government was preparing to launch a production-focused campaign to reduce imports.

A version of this article appears in the print on August 11 2021, of The Himalayan Times.