KATHMANDU, JUL 15 - The country finally got its annual budget on time after two years. Finance Minister Shankar Prasad Koirala on Sunday presented a Rs 517.24 billion budget for the next fiscal year. With an agreement in place that no new programmes will be introduced in the fiscal estimates, Koirala’s budget was largely a continuation of the previous budget , though he did introduce a few new plans. The budget allocated Rs 353.42 billion for recurrent expenditure, Rs 85.10 billion for capital expenditure and Rs 78.72 billion for financing purposes. While focusing on energy and the agriculture sector, the budget also allocated Rs 16 billion for the Constituent Assembly (CA) elections scheduled for November 19 and extra funds for local elections. Koirala tried to present a balanced budget in terms of political orientation, amid doubts expressed by leaders of the UCPN (Maoist) and the CPN-UML that it may tilt towards the Nepali Congress’ (NC) economic policy. Koirala was appointed the Finance Minister from the NC quota. The budget clearly followed the three-pillar economy—accommodating the role of the government, the private sector and cooperatives—amid suspicions that the cooperative sector could be marginalised. There is something for government employees as well as the middle class in the new budget . By increasing the salary by 18 percent and an additional monthly allowance of Rs 1,000, the Finance Minister has tried to win over the government employees’ hearts. Also, by increasing the income tax ceiling, Koirala tried to provide some relief to the salaried class. The budget seeks to keep inflation at 8 percent, which, economist Bishwombher Pyakuryal predicted is hard to tame. It also seeks to attain an economic growth rate of 5.5 percent, although it needs a 7 percent growth rate on an average to make the country a developing one in 2022 from the current status of a least developed country. UCPN (Maoist) leader and former finance minister Barsa Man Pun appreciated the budget . He said the next elected government could own up this budget . Former Finance Secretary Rameshore Khanal said local elections could affect the implementation of the budget due to ‘over engagement’ of government employees in holding two elections in a year. He, however, praised the budget ’s focus on the energy and agriculture sectors and adequate budget allocation for transmission lines and completion of ongoing hydropower projects. Giving utmost priority to energy, the budget has allocated Rs 30 billion for the sector, which is more than double the revised expenditure estimates under that heading this year. The revised estimated expenditure in the sector this year stands at Rs 14 billion, from the targeted Rs 18 billion. With the agriculture sector figuring second in the priority list, the budget plans to implement the new 20-year ‘Agriculture Development Strategy’ and the 10-year ‘Food and Nutrition Security Plan’ from the next fiscal year. The budget has allocated Rs 6.7 billion for compost and chemical fertilisers, seeds, technology and mechanisation of agriculture as unfavourable climate and shortage of fertilisers during the plantation season has hit agricultural production this year, ultimately hitting the economic growth. In infrastructure development, focus has been laid on completing the ongoing ‘National Pride Projects’ which are related to the energy, road, railway, irrigation, drinking water and tourism sectors. The budget has added the Pashupati Area Development, Lumbini Area Development, President Chure Conservation and Bheri Babai Diversion Project in the ‘National Pride Project’ list. The Melamchi project has been given Rs 5.24 billion, a hefty amount for the long-awaited project. Sikta Irrigation Project was given Rs 1.14 billion, Mid-Hill highway Rs 1.92 billion and Postal Road Rs 2.21 billion. The budget has allocated Rs 11.01 billion for social security, including allowances for the elderly, single women, disabled and endangered communities. To address anomalies in the foreign employment sector, the budget has provisioned a contract paper to be signed at the Department of Foreign Employment. Despite initial hesitation to take ahead the Youth Self Employment Programme, amid complaints of irregularities, the current government will give continuity to the programme. The budget plans orientation programmes for 50,000 youths and skill training for 10,000 youths. As far as measures related to promotion of the private sector is concerned, the budget announced electricity supply for industrial areas even during load-shedding hours by making a certain timetable. It also plans to reward investors making an investment of above Rs 1 billion with the Prime Minister Entrepreneur Award. Despite concerns over the current government’s priority accorded to cooperatives, the budget has sought to mobilise cooperatives for marketing of agricultural goods. It plans to set up a ‘Cooperative Multi-purpose Commercial Complex’ to expand the market of agriculture cooperatives. As far as increasing the country’s exports are concerned, the budget has doubled the amount for increasing production and promoting market for goods identified by the Nepal Trade Integration Strategy-2010. The country’s trade deficit has gone up alarmingly in recent years due to the country’s small export basket. In the financial sector, the budget has announced measures for monitoring saving and credit cooperatives as the sector has emerged as a risky area, where more than Rs 100 billion public money has been deposited. Mergers among banks and financial institutions have also been encouraged. The budget plans to collect Rs 354.5 billion from revenue, Rs 5.5 billion in principle refund, Rs 69.54 billion from foreign grant. Likewise, it plans to raise Rs 43.7 billion foreign loan and Rs 44 billion from internal loans.
Posted on: Mon, 15 Jul 2013 04:24:17 +0000
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