Kathmandu, May 29
The government has announced the budget of
Rs. 1647 billion for the coming Fiscal Year 2021/22. Finance Minister Bishnu
Prasad Paudel on Saturday unveiled the budget that aims at protecting the lives
of people from the deadly COVID-19 pandemic, expediting the rehabilitation of
business and economy, strengthening the welfare role of the state and creating
resilient economy.
The size of budget is Rs. 173 billion
larger compared to the current FY 2020/21. Then FM Dr. Yuba Raj Khatiwada had
brought the budget of Rs. 1474 billion which was 3.81 per cent smaller than the
budget a year earlier.
About Rs. 678.6 billion is allocated for
recurrent expenditure of the federal government, Rs. 374.2 billion for capital
budget and Rs. 207.9 for financial management. Rs. 386.7 billion is separated
for the provinces and local bodies. The share of these allocations is 41.2 per
cent recurrent, 22.7 per cent capital, 12.6 per cent financial management and
23.5 per cent financial transfer.
In absence of the House of Representatives
which was dissolved recently, FM Paudel presented the budget from the Office of
the Prime Minister at Singhadurbar. The budget was announced following the
ratification of Finance Ordinance, Ordinance to Raise National Debt and
Appropriation Ordinance 2077 earlier on Saturday.
Sources
of the budget
The budget of the FY 2021/22 has Rs. 559.3
billion deficit. Rs. 1024.9 billion is expected to be raised from the revenue
and Rs. 63.3 billion from foreign grants. It leaves the space of about Rs.
559.3 billion source gap.
According to FM Paudel, the remaining
amount would be managed through international loan Rs. 309.2 billion and
domestic borrowing Rs. 250 billion.
Financial
transfer
"The financial transfers to the sub-national
governments include Rs. 325 billion equilisation grant and Rs. 60.9 billion
development budget," said FM Paudel.
Combined capital allocation for the federal
and sub-national governments makes the size of total development budget 23.9
per cent higher than the current year's.
FM Paudel has increased the equilisation,
special, matching and conditional grants to the sub-national governments.
Provinces will get Rs. 57.9 billion and local bodies Rs. 94.5 billion in
equilisation grant.
Likewise, the size of conditional grant is
Rs. 35.8 billion and Rs. 173 billion to the provinces and local bodies.
Matching grant is Rs. 12.3 billion and special grant is Rs. 12.4 billion.
It is also expected that the sub-national
bodies will get about Rs. 126.6 billion in revenue share in the next fiscal.
6.5
per cent growth
Through the budget the government has
projected a growth rate of 6.5 per cent in the coming FY.
FM Paudel said that the growth target was
set in an expectation of pandemic control, reforms in health service and
infrastructure, implementation and initiation of large strategic projects, and expansion
of clean energy and information technology facilities.
In the hope of getting the COVID-19 under
control and boosting economic activities, the government had set a growth
target of 7 per cent for the current fiscal year. But according to the Economic
Survey of FY 20120/21 unveiled on Friday, the country will achieve the economic
growth of maximum 4 per cent.
Nepal had witnessed economic contraction of
2.12 per cent in FY 2019/20 due to the first wave of the pandemic. It was the
worst economic scenario in about two decades.
Likewise, the inflation target is set at
6.5 per cent.
86 per cent budget to be utilized
According to the
budget statement, 85.9 per cent budget would be utilized in the current fiscal
including 91.4 per cent recurrent, 71.3 per cent capital expenditure and 85.2
per cent financial management.
Likewise, revenue
collection target would also be unmet. About 94.8 per cent of the Rs. 889.6
billion revenue would be mobilised by the end of this year. Rs. 27.6 billion
foreign grant, Rs. 165.1 billion foreign loan and Rs. 223 billion domestic loan
will be mobilised against the target of Rs. 60.52 billion, Rs. 299.5 billion
and Rs. 255 billion respectively.
Priorities
The budget of the next fiscal year has
given priority to the control and treatment of COVID-19, expansion of health,
road, irrigation, railway, and energy infrastructure. Education has received
the largest share of budget. Rs. 180.4 billion is allocated to Ministry of
Education, Science and Technology. Likewise, Rs. 122.7 billion is earmarked for
the projects and programmes under the Ministry of Health and Population.
Infrastructure projects like Kathmandu Terai Expressway, Airports,
East-West Highway, tunnels in Nagdhunga and Tinkune, and bridges across the
country have received a large purse for their development.
Rs. 8.15 billion is allocated for
the construction of Kathmandu-Terai Expressway, Rs. 6.59 billion for postal
highway, Rs. 20.3 billion for airports, Rs. 9.8 billion for
Nagdhunaga-Sisnekhola tunnel and Rs. 10 billion for railway development.
The government has planned to
develop 300 bridges in the next fiscal while Rs. 5.5 billion is earmarked for
the construction of suspension bridges.
Continuing its business
rehabilitation programmes implemented this year, the government has earmarked
Rs. 13 billion for refinancing for the business and industry.
PAF scrapped
FM Paudel has scrapped three
national development programmes that were notorious for financial
misappropriation. He has scrapped the Poverty Alleviation Fund, Election
Constituency Development Programme and Local Infrastructure Development
Partnership Programme.
He has announced to provide zinc
sheets for 168,000 households to replace the thatched roof.
Similarly, additional 50,000
households will be provided electricity through alternative energy schemes. The
country is likely to add about 1,629 MW electricity to its national gird,
according to the budget.
Major numbers
Size
Total
Budget: Rs. 1647 billion
Recurrent
expenditure: Rs. 678.6 billion (41.2%)
Capital
expenditure: Rs. 374.2 billion (22.7%)
Financial
management: 207.9 billion (12.6%)
Fiscal
transfers: Rs. 386.7 billion (23.5%)
Sources:
Revenue:
Rs. 1024.9 billion
Foreign
grants: Rs. 63.3 billion
Foreign
loan: Rs. 309.2 billion
Domestic
loan: Rs. 250 billion
Economic growth target: 6.5 per cent
Inflation projection: 6.5 per cent
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