Budget deficit crosses Rs 7 billion in six months

With increased spending on election preparations, relief works and administration, the budget deficit has reached 7.7 billion rupees in the first half of the fiscal year 2007/8.

Presenting the mid-term budget evaluation report at the Finance Ministry on Tuesday, Finance Minister Dr Ram Saran Mahat said the budget deficit was a result out of ballooning administrative costs, increased relief aid for conflict-hit people, election preparations and investment on new hydropower plants.

The mid-term statistics are in sharp contrast to that of fiscal year 2006/7 when there was a surplus of 9.54 billion rupees. The report indicates that exports fell by 5.8 percent during this period due mainly to frequent general strikes in Terai and other parts of the country.

Though the finance minister admitted that the growth rate this year is unlikely to exceed 4.5 percent - 0.5 percent down from the projection - he claimed that the economy was stable and that “there’s nothing to be worried about the economy” thanks to peace and improving political scenario.

Crippling hours of load shedding and shortage of petroleum products have been two major factors behind the slowdown in growth, Dr Mahat said.

However, revenue collection has shown an encouraging trend with 25.4 percent growth in the last six months as compared to the same period the previous fiscal year. Tourism revenue also grew by 65.3 percent in the past six months. nepalnews.com mk Mar 05 08