April 2: The government is facing mounting challenge for resource management with the coronavirus taking heavy toll on the country’s economy.

On one hand, the economic activities have come to a complete halt due to the lockdown while on the other hand the government faces an uphill battle to mange resources to control the spread of the disease.

In order to manage funds to ward off the crisis, the Ministry of Finance has resorted to budget transfer and mobilization of foreign aid.

The finance ministry has transferred Rs 850 million from one budget head to another as per the request of the Ministry of Health and Population. A highly-placed source at the finance ministry told New Business Age that the budget has been transferred from various other programmes under the health ministry.

According to the finance ministry, it has also transferred Rs 500 million to the fund for preventing the spread of COVID-19 from other heads.

Joint Secretary at the ministry Uttar Kumar Khatri informed that the Office of the Prime Minister and Council of Ministers has almost finalized the work procedure to utilize the fund.

“The government will utilize the fund in accordance to the work procedure. If the budget is insufficient, the fund will be managed by transferring amount from the annual budget of the concerned ministries,” said Khatri.

Spokesperson of Nepal Rastra Bank Gunakar Bhatta says resource management will not be a problem for the government as revenue collection, inflow of remittance and budget expenditure are taking place as expected till last month. He said that the government will start facing problems if the current problem persists for more than a month.

“As most of the countries around the world are under lockdown, the inflow of remittance is expected to decrease and the foreign exchange reserve will also decline. The government will face problems in such a situation,” said Bhatta.

The government  has already made it clear that it is ready to mobilize foreign assistance for resource management to cope with the  current crisis. A meeting of the Council of Ministers held last week  has given the authority to the finance ministry to hold discussions with the donor agencies to mobilize the funds for the government’s fight against coronavirus.

The finance ministry has said that the government has initiated the process to receive concessional loan of Rs 3.43 billion from the World Bank to deal with the  coronavirus crisis. It has also accepted credit facility of Rs 13.09 billion from the International Monetary Fund. The finance ministry is also doing its homework to acquire US$ 60 million from the Asian Development Bank.

Joint Secretary at the finance ministry Khatri also informed that the government is discussing about taking concessional loan from other development partners to deal with the current crisis.

The finance ministry has formed a committee to study the impact of coronavirus on Nepal’s economy but the government has not released the findings of the report yet.

Former Finance Secretary Shanta Raj Subedi is of the view that the government should transfer the budget allocated for development works to the sectors affected by coronavirus as there is no possibility of capital expenditure at the moment.