Govt lowers expenditure extimates to Rs. 1.08 trillion

 Previous governments left unlimited liabilities: FM

Kahmandu, Mar. 7: The Ministry of Finance (MoF) has adjusted the budget of the current Fiscal Year 2017/18 by lowering the total expenditure estimates to Rs. 1082.99 billion from the Rs. 1278.99 billion.

In the mid-term review of current year’s budget on Wednesday, the MoF said that the recurrent, capital and financing expenditure would be Rs. 738.94 billion, Rs. 234.62 billion and 109.42 billion respectively.

The estimate of recurrent, capital and financing budget is 91.96 per cent, 70 per cent and 78 per cent of the budget of the current fiscal respectively.

“It is estimated that by the end of the current FY, Rs. 1082.99 billion budget will be spend, which is 84.6 per cent of the total allocation and 31 per cent up from the last year’s budget,” said Finance Secretary Shankar Prasad Adhikari.

He said that the government had a challenge to implement the budget with Rs. 184.32 billion deficit.

Adhikari said that the resources were allocated with the hope of Rs. 102.73 billon treasury balance and Rs. 32.97 billion budgetary supports from the donors but the treasury balance is expected to witness negative growth while the government did not receive the money from the donors.

According to him, another challenge was to address the non-budgetary demand worth Rs. 326 billion.

Former Finance Minister Krishna Bahadur Mahara had presented the budget of Rs. 1278.99 billion for this year with Rs. 803.53 billion for the recurrent expenditure Rs. 335.17 for capital expentidure and Rs. 140.28 billion for financing.

Capital expenditure has remained poor so far with just 14.3 per cent budget utilised while recurrent expenditure has witnessed 41.2 per cent progress.

Nirmal Hari Adhikari, Joint Secretary of the Ministry said that the recurrent expenditures have gone up due to the money disbursed to the local bodies and election expenses.

Finance Minister Dr. Yuba Raj Khatiwada said that the present government was sitting on piles of unlimited liabilities left by the previous governments.

He said that the government would drop the development projects that were unable to take off by mid-March and modify the project development plans of the projects that were initiated but stuck in the middle due to various reasons.

“The government will also integrate the social security programmes in order to remove the redundancies. I think we have been liberal enough in terms of social security and I am also more or less responsible for that,” he said.

According to him, resources will be generated by expanding the tax base and controlling leakages, raising remaining domestic borrowing Rs. 30.21 billion, drawing the idle money from various government accounts and depositing the revenue account, and expediting the reimbursement process.

Economic growth 6 per cent

The government has adjusted the economic growth rate for the current FY to 6 per cent from its earlier estimates of 7.2 per cent.

The government was forced to lower the Gross Domestic Product (GDP) growth estimates due to decline in rice production.

Rice projection, the major contributor to the economic growth, is estimated to decline by 1.5 per cent due to the Terai floods this monsoon against the growth of 21.7 per cent last year.

However, Governor of the Nepal Rastra Bank Dr. Chiranjibi Nepal said that the economic growth rate could go a bit higher given the increasing economic and business activities in the country.

He also said that the NRB was in the process of approving Rs. 151 billion Foreign Direct Investment (FDI).

The Ministry said that the inflation rate would go as up as 6 per cent by the end of this fiscal, which is as per the target of the budget. Inflation in the first six months of the current FY is 3.5 per cent.

Dr. Khatiwada said that the Ministry would issue a white paper with the solutions to the weak revenue mobilization and capital expenditure, liquidity crunch and high trade deficit.

Published in The Rising Nepal on 8 March 2018.