KATHMANDU -  Nepal's government unveiled it's annual budget on Monday focused on allocating funds to newly elected local units and sustaining its record high growth rate.

The Maoist finance minister Krishna Bahadur Mahara outlined a $12.38 billion budget, giving resources for federal elections, rebuilding of quake-hit houses and infrastructure development.

"The objective of this budget is implementation of the constitution, achievement of high and inclusive growth, maintain economic stability and increase the reach of people to the services of the government," Mahara said in a televised speech.

The country held the first phase of its local elections -- the first in 20 years -- in mid-May, allowing a key provision of Nepal's post-war constitution, which grants financial autonomy to local governments, to finally be implemented.

The five-year mandate of the last local officials expired in 2002 at the height of the country's decade-long civil war and party-affiliated bureaucrats were left to fill the institutional void.

There is huge hope that newly elected local officials will undermine the culture of graft that has flourished in the last 15 years.

"Enough resources will be provided to local units to undertake development works and provide services... I have provided the resources to local units through financial handover," the finance minister said.

The budget announcement comes at an awkward time for the government -- between the two phases of local elections and ahead of provincial and national elections later this year -- leaving them unable to announce any new programmes because of restrictions on electioneering by the ruling parties.

The Himalayan nation, one of the slowest growing economies in South Asia, was devastated by an earthquake and a border blockade in 2015, which sent growth plummeting to 0.01 last year, with crucial sectors like agriculture and tourism badly hit.

But the economy has bounced back, with the growth rate this year estimated at 6.94 percent, the highest in 23 years.

Experts said that high growth rate this year is an over-correction following two sluggish years and the World Bank expects it to moderate to around 5 percent fom next year.

Poor planning and a sluggish bureaucracy have hampered growth in previous years, with the government routinely failing to spend funds allocated in annual budgets and complete projects on time.

Mahara said the new budget aimed to achieve even higher growth next year.

"I hope that the implementation of this budget will increase economic activity and we will achieve a growth rate of 7.2 percent," he said.

Analysts warn that Nepal needs to undergo fundamental reforms, including opening up the economy to foreign investment, in order to achieve sustained higher growth rates.