The job of stimulus is to stimulate

Tons of small businesses are simply hanging by a thread; they need grants, not loans.

Covid-19 threw the world a curveball. Governments, businesses and households were all caught off guard. At the outset, Nepal’s 2019-20 budget, for the fiscal year ending mid-July last year, set an ambitious goal of 8.5 percent growth in the economy; donor institutions such as the International Monetary Fund, World Bank and Asian Development Bank were not as optimistic, but they all expected the economy to put up decent growth. Then the pandemic hit. As the virus wreaked havoc, when it was all said and done, the economy hardly grew. Not much relief is in sight in the current fiscal year either; most growth forecasts are in low single digits. Six months into the fiscal year, the government raised 42 percent of its tax revenue goal of Rs913 billion. The Rs1,475-billion budget expects a deficit of Rs525 billion. Revenue shortfall either means more red ink or reduced expenditures.