Nepali Finance Minister Ram Sharan Mahat has blamed the erstwhile royal government of pushing the country's economy on the verge of collapse and warned of serious fiscal crisis in the country, Radio Nepal reported Tuesday.

Presenting the "White Paper" on the state of the country's economy at a meeting of the House of Representatives on Monday, Mahat warned that the current government is likely to come across serious fiscal deficit in the days ahead.

He admitted that the government was not in a position to meet its recurrent expenditure through existing sources of revenue.

The radio quoted Mahat as saying that this year the economy is likely to grow at 1.8 percent only -- less than the current population growth of 2.4 percent.

"Instead of improving country's economy, the situation is such that people might be poorer," he noted.

According to the 17-page long "White Paper," inflation has gone up by 8 percent in the first eight months of the current fiscal year, ends on July 15, 2006, compared with that of 4 percent in the same period of previous fiscal year.

The previous government proposed to raise revenue worth 81.81 billion Nepali rupees (1.168 billion U.S. dollars) in this fiscal year, but the paper said there is likely to be a revenue shortfall of 8 billion rupees (114 million dollars).

Similarly, security related expenses rose to nearly 19 billion rupees (274 million dollars) up from nearly 12 million rupees (171, 428 dollars) four years ago, the paper said.

This year, the government has already spent nearly 16.5 billion rupees (235 million dollars) in security related expenses by mid- April.

The Finance Minister called upon Nepal's donors and multilateral agencies to provide direct budgetary support to the government and offer "liberal support" to help the government in its economic reconstruction program.

Source: Xinhua