Government budget at Rs 7.4 billion surplus

In the first six months of the current fiscal year, the government budget remained at a surplus of Rs 7.4 billion in contrast to a deficit of Rs 3.3 billion in the corresponding period the last fiscal year.“An increase in revenue and foreign cash grants account for such a budget surplus,” said a macroeconomic report — of the first six months of this fiscal year — published by Nepal Rastra Bank here today.
Not only that, total government spending has also increased by a mere 12.3 per cent to Rs 65.5 billion in comparison to an increase of 30.2 per cent in the same period the last year.
In the first six months of 2008-09, recurrent expenditure — mostly government salaries and wages — rose by 13.1 per cent to Rs 43.2 billion against an increase of 21.8 per cent in the same period last year.
However, the capital expenditure — development expenses — declined by 23.4 per cent to Rs 7.9 billion in contrast to an increase of 66.3 per cent in the corresponding period of the last year, said the central bank. It was due to the fact that the government has not started any development work till date.
In the first half of the current fiscal year, revenue grew by 25.5 per cent to Rs 59.5 billion — compared to an increase of 25.4 per cent in the same period last year — due to the rise in revenue mobilisation ascribed to the increase in income tax, VAT revenue, excise, vehicle tax and registration fee as well as high growth of non-tax revenue.
Similarly, exports rose by 18.6 per cent in contrast to a decline by 3.2 per cent in the corresponding period of the previous year. “While exports to India rose by 0.9 per cent, exports to other countries soared by 55.9 per cent compared to an increase of 7.1 per cent in the same period last year,” said the report.
However, total imports went up by 23.6 per cent compared to an increase of 14.2 per cent in the corresponding period of the previous year. While imports from India increased by 10.9 per cent, imports from other countries surged by 44.2 per cent in comparison to a growth of 10.5 per cent a year earlier.
The overall Balance of Payment (BoP) recorded a significant surplus of Rs 28.5 billion compared to a deficit of Rs 2 billion in the same period the last fiscal year. Under transfers, workers’ remittances soared by 65.3 per cent in the first six months in comparison to a growth of 18.2 per cent in the same period last fiscal year, according to NRB. “The gross foreign exchange reserves aggregated Rs 254.5 billion, an upsurge by 19.7 per cent compared to in mid-July 2008.”
The government could not control price hike as inflation stood at 14.4 per cent in mid-January. The monetary policy has targetted inflation at 7.5 per cent but that could not be realised. Some experts claim that Nepal’s inflation is imported from India where consumer price index is at 10.45 per cent — according to Reuters — in January from a year earlier.