Higher expenditure leads Rs. 9.81 billion deficit

Higher growth of expenditure has led budget to Rs. 9.81 billion deficit in the first five months of fiscal year of 2007-08, said a report of Nepal Rastra Bank (NRB). In the same period of the last year, the budget was at the surplus of Rs. 4.95 billion.

According to the report, of the sources of deficit financing, the government mobilized Rs. 5.08 billion through the fresh issuance of securities, and Rs. 2.57 billion from NRB in the form of overdraft. The amount raised through the issuance of securities is 24.8 percent of the budgeted ceiling of Rs. 20.5 billion for the current fiscal year. According to the provision, the government can borrow up to Rs 4.33 billion (statutory limit of 5 percent of the previous year's net revenue collection) as overdraft from the NRB.

The NRB record shows the net domestic borrowing of the government stood Rs. 4.14 billion. In this period, the government retired domestic securities worth Rs. 3.51 billion and borrowed Rs. 7.65 billion by way of fresh issuance and overdraft.

According to the report, of the total budget deficit, remaining Rs. 2.24 billion was financed through external borrowing.