Kathmandu, July 12, 2010-In a critical time of the political history of Nepal, much needed funding and budgeting to run the government is most and The caretaker government has presented an advance budget of Rs 110.21 billion for the fiscal year 2067/68 on Monday in the legislature parliament.
As the government was unable to unveil a full-size budget because of prolonged political deadlock, Finance Minister Surendra Pandey introduced a Bill on the authority to spend in the next fiscal year an amount not exceeding one-third of the total expenditure of the current fiscal year as per the article 96 a (2) of the interim constitution.
This means the government will be able to spend Rs.95.31 billion after the advance budget is endorsed by the parliament as the total budget of the current fiscal year stands at Rs. 285.93 billion.
While presenting the advance budget in the parliament, Pandey said that economic growth was confined to 3.5 percent this fiscal year as opposed to the expected growth of 5.5 percent due to various political and non-political reasons.
“Political instability coupled with poor performance of agricultural and industrial sector has been the prime cause behind the less-than-expected economic growth,” he said.
The trade deficit in the current fiscal year has further widened due to dwindling exports in contrast to surging imports.
According to Nepal Rastra Bank, the volume of exports is expected to rise by 28.9 percent while the same of exports will plummet by 9.7 percent in this fiscal year.
In this year, trade deficit is projected to be widened by 41.8 percent to reach Rs 296.80 billion.
Till the end of this fiscal year, the balance of payment (BoP) deficit is expected to incline to Rs 9 billion. Similarly, till the end of this Nepali month of Asadh, the volume of foreign exchange reserve is estimated to reach Rs 260 billion.
Minister Pandey also admitted that the obstruction to the annual budgetary process has dealt a severe blow to the development efforts of the country.
In 2008, the then Finance Minister Ram Sharan Mahat had presented an advance budget of Rs. 73.54 billion as the country reeled under a political deadlock over new government formation.
After CA elections last year, the main opposition Maoists did not allow endorsement of the budget for four months owing to political wrangling.
Finance Ministry records also show that the government has failed to spend the budget for capital expenditure over the last two years compared to previous years.
The government cannot introduce any new programmes and change the tax rates in the advance budget. And, this will impede implementation of new projects.