KATHMANDU, Oct 13: The government has stepped up its spending in the past few weeks, with the Ministry of Finance (MoF) releasing Rs 117 billion for payment of the government liabilities.
The government spent Rs 98 billion in the headings under the recurrent expenditure in the past three weeks since mid-September. According to the MoF, the large portion of the amount was used to pay the Dashain allowance to the civil servants. In addition, the spending was made also on social security and to release the first installment of the grants that the government provides to the local governments.
Likewise, Rs 14 billion was utilized for financial management. The ministry released Rs 7.23 billion in reimbursement for the development projects. The contractors have long been demanding the government to settle their dues that remained stalled for a long period.
The increased government expenditure is expected to revitalize the economic activities at a time when the country is facing economic slowdown. According to an MoF official, an additional Rs 24 billion has been injected in the banking system with the increased government expenditure.
At present, banks are having excess liquidity with them due to the heavy fall in demand for loans. The banks and financial institutions record Rs 470 billion in loanable funds while the credit-deposit ratio has fallen to 81 percent and interbank rate has gone down to 1.71 percent.