July 15, 2011 / 3:55 PM / 7 years ago

Nepal deficit budget has money for peace process - fin min

KATHMANDU (Reuters) - Nepal’s finance minister on Friday allayed concerns the government did not have enough money to conclude a fragile peace process with the former Maoist rebels as he presented the annual budget for the Himalayan republic.

Nepal's Finance Minister Bharat Mohan Adhikari addresses the budget during a speech at the legislature-parliament in Kathmandu July 15, 2011. REUTES/Navesh Chitrakar

The fate of 19,000 former Maoist guerrillas is crucial to the conclusion of the peace process that ended a decade-long civil war in 2006, but little progress has been made on political differences.

The army is unwilling to integrate them into regular units and the Maoists have demanded each fighter be paid 1 million Nepalese rupees ($14,286) to start a new life, causing some concerns whether the government had funds to solve the problem.

“I have made necessary provision for the integration of the Maoist combatants and their rehabilitation so as to take the peace process to its logical conclusion,” Finance Minister Bharat Mohan Adhikari told parliament.

He did not provide details.

Ever since the end of the civil war and the abolition of the 239-year old monarchy, Nepal has been in political turmoil which has delayed the drafting of a republican constitution, a key part of the peace deal.

Much of the impasse has come as the Maoists bicker with other parties over the guerrillas, now in camps, and over the control of the army.

Political woes, along with shortages of power, irrigation and industrial labour, have hurt the economy, which was forecast to grow 3.5 percent in the current fiscal year that ends Saturday, the slowest in four years.

Nepal’s new financial year begins July 17 this year, which is the start of the fourth month of the Nepalese calendar.

Adhikari said of the total outlay, $3.39 billion would be met from revenue collection and $984 million from foreign grants, a key source of funding for development projects.

The deficit will be met through internal as well as foreign loans from multilateral agencies, he said.

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