Indicators show grim picture of economy

RUDRA PANGENI

KATHMANDU, Feb 24: Despite timely budget and improving investment environment, the government is missing expectations on almost all economic indicators.

The mid-term review of fiscal policy unveiled on Monday says economic growth will hover above 5 percent. The budget had targeted economic growth of 6 percent. In the last fiscal year, national economy had grown by 5.2 percent.

Trade deficit is widening at an alarming rate, and there has not been expected growth on capital spending. The government is sitting on cash pile of more than Rs 90 million allocated for development spending. The government has managed to spend only 12 percent of the allocated fund so far, according to the report.

The mid-term review report says growth rate in industry and service industry is improving, but untimely monsoon and floods have affected agriculture production. Inflation currently stands at 7.3 percent, compared to 10 percent recorded in the last fiscal year. Similarly, revenue collection stands at a little above the target of Rs 185 billion set for the period.

"Authorization for spending was issued on the first day of the fiscal year," Minister for Finance Ram Sharan Mahat said, unveiling the report on Monday. "But the tendency to wait for budget approval from the parliament and lack of serious planning and budgeting as well as lack of zeal in designing programs and spending affected developing spending in the first half of the current fiscal year."

Mahat, however, said the government was cautiously monitoring budget spending and added that ministries have been told to sign multi-year contract for projects approved by National Planning Commission (NPC). "The finance ministry has clearly stated that such projects will not face any resource crunch," he added.

Vice chairman of NPC Govind Raj Pokhrel said ministries were not serious about seeking timely approval of budget programs. "That is why we have introduced a fast-track mode for approval of development programs," he added.

Source: My Republica