Govt revises budget to Rs. 1344.6 bn

 'Moderate economic growth rate is expected'

Kathmandu, Feb. 9

The Ministry of Finance has adjusted the estimation of income and expenditure for the current fiscal year 2020/21.

In the mid-term budget review published on Tuesday, Finance Minister Bishnu Prasad Paudel said that due to coronavirus impact on the economy and development, the actual budget mobilisation was revised to 91.19 per cent of the total amount previously earmarked.

Budget size for current fiscal year is Rs. 1,474 billion, of which Rs. 1344.6 billion would be spent.

Recurrent budget is lowered to 96.40 per cent, capital expenditure to 80.20 and financial management to 85 per cent of the budget announced by former Finance Minister Dr. Yuba Raj Khatiwada in May last year.

The budget estimates have been brought down to Rs. 914.7 billion from Rs. 948.9 billion and capital expenditure to Rs. 283.04 billion from Rs. 352.9 billion. Likewise, revenue target is revised to Rs. 885.8 billion from Rs. 950.1 billion.

"First two months of this year were affected by the coronavirus pandemic, and things are yet to return to normal. It affected the overall budget and revenue mobilisation," said Paudel.

However, over the first half of the current fiscal, revenue collection is down by 1.39 per cent.  

The Finance Minister said that the revenue collection was satisfactory with 14 per cent growth. "The government is concerned about the poor capital expenditure and is devising policies to boost development activities, especially large infrastructure building projects," he said.

He maintained that the government was moving ahead with developmental works and was being frugal in its expenditure and that the election budget would be modest compared to the past ones.

Expressing hope, he added that as the resources were available, infrastructure development would catch the desired speed.

Meanwhile, the government has received the commitment of Rs. 187.4 billion in foreign assistance for various development projects -- up from Rs. 72.9 a year earlier.

In the budget review, FM Paudel has proposed to prepare a new work plan for the budget implementation, immediately making the payment of the remaining liability, resolving the constraints experienced by the projects being developed with foreign assistance. He also asked the respective agencies to surrender the budget if they fail to spend it by March end.

He added that an alternative work plan for revenue collection would be developed, revenue leakage would be controlled and regular monitoring would be implemented, and price declaration at the customs would be based on transaction price.

According to the review, status of national pride project is pathetic with just 15.19 per cent budget mobilisation. However, progress of Pokhara International Airport, Pushpalal Highway, Karnali Corridor and Gautam Buddha International Airport is satisfactory.

However, the government did not make public the revised economic growth rate for the current fiscal year.

Secretary of the ministry Shishir Kumar Dhungana said that the growth revision would be announced by the end of the second four-month period of the current fiscal.

Published in The Rising Nepal daily on 10 February 2021.