Finance Minister Professor Biman Prasad says it’s no longer feasible for the government to sustain the economy solely through borrowing and spending.

Despite this being the norm for the past several years, Prasad says the government has implemented rigorous measures and adopted essential financial strategies to bolster our economy while cutting down on wasteful expenditure.

As the minister responsible for government’s coffers, Prasad says he is particularly proud to see the country’s deficit reduced from an average of 9 percent to around 4.8 percent since coming into power last December.

“The way we have been able to do that is to reform the tax system. We increased the company tax, so it’s not just the people; some of the critics are just concentrating on VAT, saying the prices have gone up because of VAT.”

Prasad says the administration has copped some criticism for introducing three VAT rates, including a three percent tax on companies importing raw materials.

“So the business community and the private sector are also contributing to the revenue measures. The interest and principal payment for the loan that we already had this year are almost a billion dollars out of the budget. We just go for interest payments and principle payments.”

The Minister says the 2023–2024 budget takes a balanced approach to minimizing spending while also helping the vulnerable population.

“We can’t run an economy on just borrowing and spending, which is what happened for so many years. We don’t want to do that because if we don’t put a stop to that, then the situation for our people economically will be worse than what we saw during COVID.”

Prasad says his ministry will not compromise the interests of the most vulnerable in society or the country as a whole and that the current budget reflects some semblance of rationality and practicality in terms of government spending.