December 25, 2001

KATHMANDU: Finance Minister Dr. Ram Sharan Mahat told Nepal Television Tuesday government will announce a supplementary budget half-way through the financial year 2001/2 to meet an unexpected additional financial burden mainly for new security needs after an emergency was slapped on the nation November to quell a six year communist rebellion.

He did not specify when the supplementary budget will be announced or its size after consultation with the opposition. But he said development funds will be diverted and additional taxes imposed.
Dr.Mahat said additional security costs, lower than expected revenue collection and increased costs for the SAARC summit forced the government to announce a supplementary budget to meet costs.

For the first time a supplementary budget is being introduced in 11 years of multi-party democracy after the Asian Development Bank earlier in the week said Nepal was facing its worst economic crisis in more than a decade with economic growth predicted this current year at only three percent or half the prediction.
Minister for Water Resources Bijaya Kumar Gachedhar earlier told a newspaper government was diverting Rs.15 billion of the allocated Rs.50.47 billion this year of the development budget for the army and police.