Nine percent increment in foreign assistance grant and loan to Nepal

Nepal has received commitment for foreign assistance grant worth Rs 241 billion as of March in the current fiscal year, which is an increment of 9 per cent against the same period last year.

The increment in the foreign assistance is attributed to the development donor’s and friendly countries’ increasing confidence on the incumbent government formed following the second constituent assembly elections in 2013.

Of total foreign assistance grant and loan committed to Nepal during the current fiscal year, Indian Prime Minister Narendra Modi-offered USD 1 billion during his maiden trip to Nepal in August 2014 accounts for the lion’s share while China has also increased in its assistance on the occasion of Nepal-China’s diplomatic ties reaching 60 years this year.

Among the received foreign assistance, grant amounts to Rs 113.5 billion (47.04 per cent) while 127.8 billion (52.96 per cent) is loan, as per the information shared by the Ministry of Finance.

According to the International Economic Cooperation Coordination Division under Ministry of Finance, the grant and loan has been provided for various 24 projects by the international development partners of which the education sector received Rs 2.78 billion while the irrigation sector received Rs. 6.79 billion.

The government earlier had mention (in the budget speech) that of total expenditure budgeted to spent in the current fiscal year, it is to cover around Rs 73.38 billion from foreign aid as income. Likewise, the government also had mentioned to spend Rs. 49.52 billion from the foreign loan aiming to address the budget deficit.

Ramsharan Pudasaini, Spokesperson at the MoF was of the opinion that the increment in the foreign aid was to due to the present situation of the country, which is favorable for development works. He added that although the foreign aid had increased in the recent years, the aid has not been best utilized since the expenditure capacity has not been expanded due to various reasons including inability to acquire land for running projects on time.

Economist Prof Dr Biswambhar Pyakurel too suggests that the government should improve its spending capacity rather than only rejoicing in the rise in foreign aid. RSS

Source: Myrepublica