Narrowing budget deficit
FOR years, Nepal has been in deficit and the
trend continues to increase, despite several measures announced by the government and
Nepal Rastra Bank, the central bank of Nepal, to reverse the negative trends seen in the
overall economic scenario. Though the volume of trade and budgetary deficits continues to
increase every year, at the same time the volume of overall international trade and
exports have also increased - - which is a matter of satisfaction for all. The volume of
growth, of course, has been bigger in the recent years because of various factors
including inflation and growth in economic activities. But this growth alone does not
ensure economic development in the country. With the increase in the volume of trade, the
budgetary deficit and gap between import and export have tremendously increased over the
last few years. They are not at all good and positive indications of nationís economy.
One thing needs to be mentioned here is that the government and other concerned bodies
claim that the nationís economy has shown positive indications. Given the overall
scenario, the economic condition of the country has not significantly improved in real
sense. The negative trends seen in our national economy need to be reversed if it is to be
brought back to track.
It is, of course, true that the economy had
started to show some positive symptoms after the government made a shift from controlled
economy to liberal and market friendly economy in 1991. However, the political instability
and frequent changes of government in the last four-plus years severely affected the
countryís economic sector and activities. Now the majority government of the Nepali
Congress has expressed commitment to correct the deteriorating economic condition of the
ocuntry and for which some measures have also been initiated. Although it might take time
to see the results of these efforts, some positive indications have been noticed. Nepal
Rastra Bankís recent communique concerning the macro economic situation of the country in
the last three months also reveals that despite budgetary deficit the economic situation
has started to show some good results. According to NRB, the present foreign exchange
reserve is sufficient to cover the imports for 10 months, which is one more positive
aspect. The need of the hour is to build up on this and other positive economic indicators
to narrow down, the growing trade and budgetary deficits so as to turn Nepalís moribund
economy into the healthy one.
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