Whopping Rs 556.6m Budget Surplus in Q1

In the first two months of the current fiscal year 2009-10, government budget surplus stood at Rs 556.6 million in comparison to a surplus of Rs 3.4 billion in the same period last year.

However, the government spending has gone up by 69.8 per cent to Rs 26.6 billion in comparison to an increase of 40.4 per cent last year. "The increase was mainly on account of a rise in the growth of recurrent expenditure," said the current macroeconomic situation based on the first two month's data of the current fiscal year published by the central bank.

"Recurrent expenditure rose by a whopping rate of 108.1 per cent to Rs 17.6 billion, compared to a moderate rise of 11.9 per cent to Rs 8.4 billion in the same period last year," the report said attributing the rise mainly to an upward revision in the salary and allowances of the civil servants and teachers.

Meanwhile, revenue mobilisation also grew by 54.5 per cent to Rs 22.6 billion compared to an increase of 17.5 per cent in the corresponding period of the previous year. The government's firm commitment to control the leakage in the revenue as well as tax administration reforms in conjunction with increasing import and consumption by virtue of high remittances inflow contributed to such an increase in the revenue mobilisation, said the report.

The government received foreign cash loans amounting to Rs 158.9 million and foreign cash grants amounting to Rs 2.72 billion, where as it had received foreign cash loans of Rs 625.1 million and foreign cash grants of Rs 2.12 billion in the same period of last fiscal year.

However, exports fell by 15.2 per cent in contrast to a rise of 35.7 per cent in the same period last year. "Of the total exports, export to India declined by 13.2 per cent in contrast to a rise of 6.7 per cent. Exports to other countries plummeted by 17.4 per cent as against a rise of 94.7 percent in the same period of last fiscal year," Nepal Rastra Bank said.

The decline in the exports to India was attributed to the decline in the exports of readymade garments, zinc sheet, thread, copper wire rod and aluminum section, among others.

Similarly, exports to other countries went down due to decline in the export of woollen carpets, readymade garments, pulses, tanned hides, silverware and jewelleries.

At the same time, total imports expanded by 20.3 per cent compared to a higher growth of 45.5 per cent in the corresponding period of the previous year.

While imports from India rose by 17.3 per cent in the review period compared to a growth of 35.4 per cent, imports from other countries rose by 24.2 per cent compared to a significant growth of 60.7 per cent during the same period last year.

The Balance of Payment deficit also doubled to Rs 3.76 billion against the deficit of Rs 1.89 billion then last year.