Govt says will miss economic targetsThe government has said it will miss the targets for economic growth, expenditure and revenue collection for this fiscal year due to the Indian trade embargo that affected economic activities in the first half.
The government has said it will miss the targets for economic growth, expenditure and revenue collection for this fiscal year due to the Indian trade embargo that affected economic activities in the first half.
Economic activities were affected severely in the absence of fuel, construction materials, raw materials and chemical fertilisers during the blockade that lasted for four and half months starting from September 22, 2015. Although border crossings were eased after three months, blockade at major border point of Birgunj was lifted only on February 4, 2016.
Unveiling the mid-term review of the budget on Thursday, Finance Minister Bishnu Poudel said the government expected just over 2 percent growth this fiscal year, far below the targeted 6 percent.
As a result of the blockade, farmers could not get chemical fertilisers, affecting agriculture output, the budget review states, adding supply constraints caused by the embargo also affected economic activities in the non-agriculture sector.
“We will make efforts to achieve more than 2 percent growth as the situation has eased after the lifting of the embargo,” said Poudel.
Presenting a White Paper on the economy on November 24, 2015, the government had predicted economic growth of below 2 percent.
In the first six months of the fiscal year, public expenditure stood at just 21.94 percent of the allocated budget, while capital expenditure amounted to RS15.55 billion—7.18 percent of the allocation.
A big portion of the capital
budget is meant for reconstruction, which is yet to begin. The
government expects total
expenditure of Rs700.01 billion at the end of the fiscal year—85.66 percent of the allocation.
Poudel said the expenditure would grow immensely in the days to come as earthquake-damaged infrastructure would be reconstructed and work on the major development projects would be expedited.
With imports slumping in the first six months, the government expects to miss the revenue target by Rs45 billion this fiscal year. Nepal’s revenue collection is largely depends on imports, which fell 25.7 percent during the review period.
According to the Finance Minister, the government will
reprioritise development projects and allocate resources for those spending well.
“The government has formed ‘Infrastructure Projects Monitoring and Direction Committee’ to speed identify infrastructure projects, determine priority and reprioritise them and coordinate and ease their implementation,” said Poudel.