Budget surplus increases

Due to the government's low appetite for development expenditure, the government budget remained at a surplus of Rs 23.17 billion by the end of five months of the current fiscal year 2012-13, according to the central bank.

"The budget surplus stood at Rs 8.03 billion in the same period of last fiscal year," it said, attributing the huge surplus to a higher rate of growth in resource mobilisation relative to government expenditure.

The inability of the incumbent government has to led to a surge in the budget surplus, according to Nepal Rastra Bank (NRB) that revealed that the total government spending decreased by 2.6 per cent to Rs 85.83 billion by mid-December against an increase of 48 per cent spending in the same period of last year. "The delay in adopting a full-fledged budget for the current fiscal year has been attributed to such a decrease in the growth rate of total expenditure."

Donors also urged the government last month during the review meeting to expedite development expenditure also to achieve the growth target. Low expenditure could also create a liquidity crisis in banks.