Kathmandu: The Nepal government has targeted the economic growth of 7 percent in the next fiscal year 2020-21 despite the severe impact of the COVID-19 pandemic on the economy.

On Thursday, the government presented the annual budget of 1.47 trillion Nepali Rupees ($12 billion), reports Xinhua news agency.

It is the reduced size of budget presented for the next fiscal year that begins in mid-July compared to the size of the budget for the current fiscal 2019-20, as the government expects to cut its revenue collection in the next fiscal year due to the impact of COVID-19 on Nepali economy.

In the last fiscal year, the government presented a budget of 1.53 trillion Nepali Rupees.

Presenting the budget at the joint session of the House of Representatives and the National Assembly, the lower and upper house respectively, on Thursday, Finance Minister Yubaraj Khatiwada said that a 7 percent growth target was set with conviction that the economy would achieve speedy recovery whenever the situation normalized from COVID-19 crisis.

The Minister however said that growth in the current fiscal year 2019-20 is expected to remain at 2.3 percent, still an optimistic view as COVID-19 crisis deepening in the Himalayan country as number of cases reached 1,042 on Thursday.

The government has increased the budget for the health sector significantly by 32 percent to 90.69 billion Nepali Rupees.

In the next fiscal year, it aims to add 272 new hospitals with 5-15 beds in local levels.

With the pandemic impacting the global economy including that of Nepal, tens of thousands of Nepalis at home and abroad have either lost jobs or on the verge of losing their employment.

The Finance Minister announced the plan to create over 700,000 new employments under various employment centric programmes.

The government has also announced a number of economic recovery plans including tax cuts to small enterprises and making available finances at cheaper interest rate to run enterprises and to pay to the employees.