With a huge surplus money, growing foreign investment commitments in the hydropower sector and increasing revenue, Nepal’s economy is getting back on the right track. However, certain worries persist due to the low spending on capital investment.

“An investment-friendly environment has been seen in the country as foreign investment worth 11 billion US dollars has been invested for the construction of Upper Karnali, Arun III, cement factories and five star hotels,” said Dr. Ram Sharan Mahat. “Revenue collection increased by seven per cent in the first four months of the current fiscal year, more than the target set by the government,” said Finance Minister Mahat. According to a press release, a total of Rs 114 billion revenue was collected during the period.

Encouraged by the growing number of new foreign investment projects like hotel, cement factory, airport and airline, the government is now working to invite more investment in other sectors as well.

According to Minister Dr. Mahat, the government has got a foreign investment commitment of Rs 90.18 billion during the 4-month period. "The grant loan of Rs 100 million recently signed with India has not been incorporated in it."

At a time when there are reports on the deteriorating economic performance, the Ministry of Finance has clarified that the overall financial situation of the country is improving and the environment for investment is also satisfactory.

The total expenditure until 20 November of the current fiscal year is Rs 98.82 billion, including Rs 83.57 billion towards current expenditure and Rs 6.59 billion in capital expenditure. Similarly, Rs 8.64 million has been expended in financial arrangement, the Ministry of Finance stated in a press meet it organized here.

Compared to the previous fiscal year, the overall inflation has increased by one per cent and the year-on-year point-wise consumer inflation till October 17 was 7.5 per cent. The inflation in the corresponding period in the last fiscal year was 8.4 per cent.

As compared to the foreign exchange reserves of Rs 665.41 billion as of 16 July 2014, this has increased by 2.1 per cent to 679.4 billion until 17 October. This reserve is enough to meet the goods import for 10.8 months and that of goods and services for 9.3 months.

The Ministry has stated that the overall national economy is gearing up and the increasing capital expenditure is a challenge.

“A target of raising Rs 52.75 billion internal loans was set in the previous year but the internal loan has not been mobilized as of mid-November,” said Dr. Mahat.