Kathmandu, May 28
Finance Minister Dr Yuba Raj Khatiwada has
announced Rs 1.47 trillion budget for the next Fiscal Year 2020/21 with a focus
to creating robust health infrastructure, reviving the business affected by the
coronavirus pandemic, creating jobs and maintaining social security.
The budget has also given priority to the
expansion of quality health service and creating health infrastructure,
rehabilitation of the production and supply chain disturbed due to the measures
put in to check the spread of the coronavirus, creation of jobs and food
security, completion of delayed infrastructure projects, expansion of
information technology and strengthening of good governance.
This is first time in the recent history
that the country has witnessed a budget that is smaller than the budget of the
previous year. Dr Khatiwada had unveiled the budget of Rs 1.53 trillion for the
current fiscal with an aim of completing the reconstruction work and back-log
projects, the two targets which couldn't be achieved.
Next FY's budget is 3.81 per cent smaller
than that of the current fiscal.
Capital budget reduced
Almost two-thirds of the budget, Rs 948.94
billion or 64.4 per cent, is earmarked for the recurrent expenditure. Likewise,
Rs 352.91 billion is allocated for capital expenditure and Rs 172.79 billion
will go to financial management. The capital and financial management has the
share of 23.9 per cent and 11.7 per cent respectively.
The recurrent budget has gone up from 62.4
per cent and capital budget come down from 26.6 per cent.
Likewise, the resources for the
expenditures will be managed primarily through the revenue and domestic and
foreign loans.
"Rs 889.62 billion will be raised
through revenue and Rs 60.52 billion from foreign grant. The remaining deficit
of Rs 524.5 billion will be arranged through loans," Dr Khatiwada said
while presenting the budget at the joint session of the Federal Parliament.
The size of foreign and domestic loan will
be Rs 299.5 billion and 225 billion respectively.
The Finance Minister has maintained that
the budget is a creation that aimed at treating the multiple bruises caused by
the coronavirus pandemic.
Infrastructure like railway, bridges and
roads, irrigation and hydroelectricity, airports, flyovers and tunnels, programmes
like Digital Nepal Framework, urban development, digital education, broadband
internet to all and insurance to all are included in the budget which are
announced amidst a global health crisis and economic breakdown caused by the
execution of lockdown and travel restrictions to save human lives.
Dr Khatiwada also said at the parliament
that the national aspirations of leading the country on the path of development
and prosperity propelled by two years' achievement and high economic growth
were shattered due to the coronavirus outbreak.
He said that he had felt the responsibility
of saving the lives and giving impetus to the economy, which obviously are the
contradictory aims given the poor health infrastructure and human resources in
the country.
7% growth target
Despite the bleak economic environment, FM
Dr Khatiwada has set the GDP growth target of 7 per cent for the coming fiscal
year.
His hopes are based on the projects that
could be completed within a year and yield immediate economic benefits,
expectations that the delayed and sick projects would be expedited, post-quake
reconstruction would be completed and the service would be expanded.
"Although it is difficult to gauge the
impact of the COVID-19 now, I hope that the economy will catch its rhythm after
the situation becomes normal. Therefore, I hope that the country will embark on
the path of growth of last three year's average of 7 per cent," said Dr
Khatiwada.
Inflation target has also gone up to 7 per
cent against this year's 6 per cent.
Budget to local bodies
States and local bodies will get Rs 55.19
billion and Rs 90.5 billion respectively under the equilisation grant and Rs 36.35
billion and Rs 161.8 billion respectively for conditional grant from the
federal government.
About Rs.122.14 billon revenue will be
distributed to the states and local bodies based on their area, demographic,
human development and low-development indicators.
Likewise, Rs 9.96 billion is allocated for
the matching grant to fund the projects executed by the sub-national
governments. Rs 9.97 is allocated for special grant.
Only 70% budget to be used
Due to the crisis created by the
coronavirus, only 70 per cent budget of the current fiscal year is likely to be
utilised.
Saying that the pandemic had affected both
income and capital expenditure, FM Dr Khatiwada has revised the budget of the
current fiscal which puts the actual budget at Rs 1073.35 billion.
Of the total allocation, recurrent
expenditure will be 73.3 per cent and capital expenditure will touch 58.6 per
cent.
Similarly, revenue mobilisation will be
74.4 per cent, Rs 827 billion of the target of Rs 981.13 billion, foreign grant
will be reduced to Rs 32 billion from Rs 58 billion, foreign loans to Rs 121
billion from Rs 298.83 billion and domestic borrowing will be Rs 193 billion
against Rs 195 billion target.
Budget in Numbers
Budget: Rs. 1,474.64 billion
Expenditures
Recurrent: Rs. 948.94 billion (64.4%)
Capital: Rs. 352.91 billion (23.9%)
Financial Management: Rs. 172.79 billion
(11.7%)
Income
Revenue: Rs. 889.62 billion
Foreign Grant: Rs. 60.52 billion
Foreign Loan: Rs. 299.5 billion
Domestic Borrowing: Rs. 225 billion
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