December 10: Finance Minister Janardan Sharma has claimed that the economic growth rate of the current fiscal year will be 7 percent. The goal of economic growth was difficult to achieve in the past due to various problems, said Sharma, adding that there won’t be such problems now.

Speaking at a meeting of the Finance Committee of the House of Representatives on Thursday, Finance Minister Sharma said that 98 percent of the industries and factories have been re-opened after the Covid-19 pandemic. He said that economic activities have increased everywhere and this will also help in economic growth.

According to him, climate change has been seen as the main challenge in achieving economic growth of late. Stating that billions of rupees have been lost due to unseasonal rainfall, he said that despite these challenges, the target of economic growth would be met.

Furthermore, he also said that liquidity crisis still persists in the market. Stating that there is only Rs 16 billion investment (liquidity) in the banking sector now, he said that the liquidity problem has been removed to some extent. “Even though the NRB has injected Rs 2.3 trillion in the banking system in the current fiscal year alone, the problem has not been resolved. The lack of capital expenditure is also a weakness. However, government’s overall expenditure is 2 percent higher than last year,” he said.

Stating that the flow of foreign aid is continuing, he said that discussions are being held with various donor agencies. “We have just reached an agreement for $400 million loan with the IMF under the ECF. We are getting $100 million at the moment. We are also in the process of getting assistance from other agencies like ADB and other countries,” said Minister Sharma.

Stating that NRB has made arrangements for non-resident Nepalis to open savings accounts in dollars, he said that it would have a positive impact on the country's economy. According to Sharma, the ministry has deployed a special task force at the airport customs. The task force has been seizing 19/20 kg of gold daily at the airport. Stating that arrangements have been made to release the seized gold only after collecting customs duty, Sharma expressed confidence that it would help in revenue collection

At the meeting of the committee, Governor of Nepal Rastra Bank, Maha Prasad Adhikari, said that there was a lack of liquidity as more loans were disbursed than deposits collected. According to officials, deposits have increased by only Rs 64 billion whereas loans from the banking system have gone up to Rs 411 billion.

“There is a lack of liquidity due to the gap of Rs 300 billion,” he said. According to the governor, 50 percent of the extended loan, or Rs 205 billion, has to be spent on imports.

Stating that remittances have not increased significantly, Governor Adhikari said that an average of Rs 80 billion is being received. He says remittances have not been able to keep up with high imports.