The situation has come to such a pass that a quarter has been calling for letting the budget of the last fiscal year continue for the whole of this year.

“Introducing a budget in the middle of the year will invite many administrative and managerial complications in tax and other rates adjustments. It is, therefore, better to let the last year’s budget continue. The government can then seriously prepare for next year’s budget,” said Rajendra Kumar Khetan, chairman of Khetan Group.

Due to lack of budget, the government has been unable to spend on development.

Almost three months of this fiscal year 2010/11 have passed, but less than 1 percent of expected development expenditures have been spent.

“We expected to spend Rs 125 billion on development this year. But till now only Rs 300 million could be spent on development works. You can imagine the extent of the problem we are facing,” said Finance Minister Surendra Pandey.

This will have a devastating impact on economic growth.

In Nepal, of the total economic activities, government covers 25 percent while the private sector does the rest. But in the absence of budget, even the private sector is not going forth with their activities leading to the situation of a complete standstill.