Growth Projection at 6%, Inflation Projection at 6.5%
Focus on Austerity, Effective Capital Spending Planned
Kathmandu, May 29: Finance Minister Dr. Prakash Sharan Mahat has announced the budget of Rs. 1751.31 billion for the upcoming Fiscal Year 2023/24.
The budget presented in the joint session of the Federal Parliament on Monday is larger by Rs. 63 billion than the ceiling set by the National Planning Commission. But it is larger by 16.37 per cent of the adjusted size of the current FY 2022/23 Rs. 1549.99 billion and 2.37 per cent smaller than the original budget size Rs. 1793 billion.
Then FM Janardan Sharma had presented the budget of this year while FM Bishnu Prasad Paudel had downsized it during the mid-term review in February.
Experts have termed the move to reduce the budget a 'courageous move' of the finance minister.
FM Dr. Mahat has allocated about two thirds of the budget -- Rs. 1141.78 billion (65.20 per cent) -- for recurrent expenditure which includes the allocations for the sub-national governments, maintenance of the infrastructure projects, and salaries and subsidies to be paid by the government. Rs. 400.8 billion will be transferred to the provincial and local governments.
About 17.25 per cent of the budget (Rs. 302.7 billion) is allocated for development projects while 17.55 per cent or Rs. 307.45 billion is earmarked for financial provisions.
Capital allocation has been reduced compared to the current year's allotment of 21.2 per cent or Rs. 380.38 billion. However, revenue collection of the government has remained dismal this year as it has mobilised only 35.6 per cent (Rs. 135.4 billion) of the total annual target with only 48 days of current FY remaining.
Sharma's allocation included 42 per cent to recurrent expenditure, 24 per cent to sub-national governments and 12.8 per cent to financial provisions.
Sources of the budget
FM Dr. Mahat said that Rs. 1248.6 billion revenue collection is projected for the next fiscal and it makes the largest source for the expenditures. The revenue estimates make about 71.3 per cent of the total expenditure estimates. Other sources for the expenditures include Rs. 49.94 billion foreign grants.
The remaining sources would be managed from foreign loans of Rs. 212.75 billion and domestic borrowing of Rs. 240 billion. This means the budget has a deficit of Rs. 452.75 billion (25.85 per cent of the total size of expenditure).
Presenting the budget at the parliament, Dr. Mahat said that the budget was designed aiming at achieving the economic growth rate of 6 per cent and containing inflation at 6.5 per cent. According to the Nepal Rastra Bank, the inflation rate in Nepal was 7.76 per cent in April.
"To maintain prosperity, the budget will also be focused on building a digital and green economy. I have taken the priorities of the allocation bill as a suggestion to make the best use of resources. This budget has come to address the suggestions of the private sector and meet public expectations in order to instill hope," said FM Dr. Mahat.
He also said that the government had prepared the budget for the next year with the slogan of the second phase of economic reform and structural change of the economy.
However, he is likely to face a tough time in managing the resources since given the current year's performance future prospects don't look promising. The government could collect only Rs. 829.6 billion revenue and other payments against the expenditures of Rs. 1101.5 billion by Sunday, creating a huge gap between income and expenditure.
Infrastructure development
According to the budget speech of the finance minister, the government is making preparations to expand the
access to electricity to all households across the country within next two years, and transmission lines, micro and small hydroelectricity projects, renewable energy from solar and wind would be developed to meet this objective.
He said that about 900 megawatt electricity would be added to the national grid in the next fiscal year with the contribution from 111 MW Rasuwagadhi, 102 MW Mid-Bhotekoshi, 42.5 MW Sanjen and many other private sector projects. If this goal is achieved, total installed electricity would be 3600 MW by the end of the next fiscal. Other projects that are included in the budget are the Project Development Agreement of West Seti, Seti River 6 and Lower Arun hydel projects, and finalising modality of 1,200 MW Budhigandaki and 635 MW Dudhkoshi reservoir projects.
FM Dr. Mahat also said that he had allocated budget to the projects that could be completed in time with the estimated funds. He has drastically reduced the budget of the Ministry of Water Resources and Irrigation (MoWERI) and Ministry of Physical Infrastructure and Transport (MoPIT).
Rs. 87.45 billion is earmarked for the MoWERI which is Rs. 21 billion less than this year. Likewise, the budget of MoPIT has come down by Rs. 30 billion to Rs. 131.59 billion.
Through the budget, the government has announced to complete 150 motorable bridges along the highways and strategic roads. Expansion of Suryabinayak-Dhulikhel road, and Kalanki-Basundhara section of Kathmandu Ring Road, underpass and flyover construction at the national highway including Saatdobato, Ekantakuna and Koteshwor in the Kathmandu Valley, Kathmandu-Terai Fast Track, Tokha-Chhahare Tunnel, Kaligandaki Corridor, East-West Highway, Karnali Highway, Postal Highway and many other roads and infrastructure projects have got their way into the budget of the next fiscal 2023/24.
Signature bridge construction will be started on Narayani River and Tinau River. Simikot, the only district headquarters to be connected with the national road network, would be connected next year.
Likewise, Minister Dr. Mahat said that a standard would be made to export stones and pebbles without harming the environment.
Industrial development
The government aims to establish a chemical fertiliser plant in the country in a public-private partnership model via Investment Board of Nepal while for the next fiscal year Rs. 30 billion is allocated to subsidise the fertiliser purchase.
Similarly, detailed survey and detailed project report of Dhaubadi Iron Mines would be prepared and excavation would begin in the next fiscal. Exploration and mining of petroleum products in Dailekh, iron in Nawalparasi and Parbat, granite, slabstone and ceramics in Makwanpur, limestone in Arghakhanchi and dolomite in Dhading would be carried forward to promote the mining industry in Nepal.
Technology assistance, awareness and training programmes would be conducted for the internalisation of the fourth generation industrialisation concept. Implementation of the fourth generation industrial concept in industries would be encouraged and facilitated.
The Finance Minister has made a significant effort in industrial reform with the announcement to opening of any business with just Rs. 100 paid up capital and free registration.
Social security claims significant size For social security programmes including senior citizen allowance, Rs. 157.7 billion has been allocated which is higher than Rs. 23 billion compared to the allocation of current fiscal year.
The senior citizen allowance of Rs. 4,000 has been continued while the eligibility age is 68 years.
However, the government has continued with the controversial constituency development programme and Rs. 50 million is allocated for each election constituency. "To address the local needs of development and construction expected by the people of the constituency through the people's representatives, I have proposed a parliamentary area infrastructure development programme by allocating Rs. 50 million," said Dr. Mahat.
Likewise, Citizen Pension Scheme will be implemented through Citizen Investment Trust to include all self-employed Nepalis in the pension plan.
No comments:
Post a Comment