Foreign aid plunges

Foreign aid to the country has plunged due to the government's low absorptive capacity.

"The country has received Rs 2.29 billion foreign cash loans and Rs 11.71 billion foreign grants in the seven months of the current fiscal year," according to the central bank.

In the same period of last fiscal year 2011-12, the country had received Rs 2.79 billion foreign cash loans and Rs 24.27 billion foreign grants, respectively.

The failure of the caretaker government led by Dr Baburam Bhattarai in bringing a full-fledged budget has hit foreign aid flow as development partners are still waiting for a full-fledged budget to pump in development aid.

"However, in the absence of a budget, development partners are in a wait and watch mode," according to a Finance Ministry official. "Development partners are enthusiastic about helping Nepal but without new programmes and projects from the government, they are in a dilemma," he said, hoping that the newly formed government might be able to bring a full-fledged budget to rescue the economy that is looking down.