Upcoming budgets of provinces witness a shrink

Kathmandu, June 16

Six provinces on Friday unveiled their annual income and expenditure statements in the respective Provincial Assemblies while Koshi Province government unveiled its budget for fiscal year 2023/24 through an ordinance on Thursday. 

In total, the seven provinces unveiled the budget of Rs. 279.57 billion with Bagmati Province having the largest budget at Rs. 62.70 billion. Bagmati announced the largest budget among the provinces with the expenditure estimates of Rs. 62.70 billion while Sudurpaschim’s budget size is the smallest – Rs. 29.26.

Karnali province brought out the budget larger than Sudurpaschim and almost at par with Gandaki. Provinces have reduced the size of their budget of the next fiscal compared to this year.

 

Bagmati: Rs. 62.70 billion

Bagmati Province has unveiled the largest budget among seven provinces amounting to Rs. 62.70 billion for the next fiscal year 2023/24.

Economic Affairs Minister of the Province, Bahadur Singh Lama, presented the budget at the Provincial Assembly on Friday.

The government has allocated Rs. 26.60 billion for recurrent expenditure, Rs. 35.50 billion for capital expenditure and Rs. 500 million for financial management.

The share of recurrent, capital and financial management in the budget is 42.58 per cent, 56.62 per cent and 0.8 per cent respectively. 

The province aims to raise Rs. 25.17 billion from tax revenue, Rs. 5.26 billion from other revenue, Rs. 17.81 billion in fiscal transfer from the federal government and reserve of the current fiscal year and Rs. 14.55 billion from other recipients. 

Compared to the current fiscal year’s budget of Rs. 70.93 billion, the size of the budget is smaller with an increased recurrent expenditures and reduced capital expenditure.

Giving priority to agriculture development, the Bagmati province government has allocated Rs.3.38 billion for the agriculture sector.

Similarly,  Rs. 2.16 billion has been allocated for the Ministry of Tourism, Industry and Urban Development, Rs. 3.03 billion for the Ministry of Forest and Environment, Rs. 770 million for the Ministry of Labour, Employment and Transport, Rs. 4.07 billion for the Ministry of Health and Rs. 21.66 billion for the Ministry of Physical Infrastructure.

The purpose of the budget is to create jobs and alleviate poverty through the development of the agricultural sector, increase investment in economic and social infrastructure, strengthen the foundation of a socialist-oriented economy, achieve sustainable economic development by increasing production and productivity and protect and use natural resources.

The budget aims to adopt frugality in government expenditure, maintain financial discipline and ensure efficient allocation.

The government has abolished various allowances in order to cut current expenditures.

The budget has taken a policy of promoting homestays and expanding tourism infrastructure and service facilities to extend the stay of tourists.

For the promotion and development of religious, cultural, environmental and rural tourism in Bagmati Province, it has made arrangements to celebrate the year 2024 as the Year of Visiting Bagmati Province.

 

Madhes: Rs. 44.11 billion

The government of Madhes Province has announced the budget or Rs. 44.11 billion for the upcoming Fiscal Year 2023/24.

Minister for Economic Affairs of the province, Sanjaya Kumar Yadav presented the budget at the provincial assembly. The size of the budget is smaller by Rs. 2.77 billion from Rs. 46.88 billion of the current fiscal.

He allocated Rs. 25.69 billion (58.25) for capital expenditure, Rs. 18.22 billion (41.30 per cent) for recurrent expenses, and Rs. 200 million (0.45) for financial management.

The budget has given priority to infrastructure development, enhancing the quality of education and health services, expanding irrigation facilities, employment and good governance.

Madhes government aims at raising about Rs. 4.38 billion from internal revenue and receiving Rs. 11.38 billion from the federal government's revenue distribution.

Likewise, other sources of income are fiscal equalization grant from the central government Rs. 7.41 billion, savings from the current FY's Rs. 12.90 billion, special grant Rs. 490 million, matching grant Rs. 980 million and conditional grants from the federal government Rs. 4.56 billion.

Minister Yadav said that after managing these resources, the budget still faces a deficit of Rs. 2 billion which would be raised from internal borrowing.

He complained with the federal government for pledging the least grants to the provinces in the next FY. "The government of Madhes province has taken this case seriously since its major resources were the federal grants. So, we urge the federal government to immediately fulfill its commitments," he said.

 

Lumbini: Rs. 40.47 billion

Similarly, Lumbini provincial government announced a budget of Rs. 40.47 billion for the upcoming Fiscal Year 2023/24. Economic Affairs Minister of the province, Dhan Bahadur Maski, announced the budget which is smaller by Rs. 2.16 billion compared to that of Rs. 42.63 of this FY 2022/23.

Giving priority to infrastructure construction, education, health, agriculture, tourism and employment, Minister Maski allocated Rs. 23.25 billion (57.45 per cent) for capital expenditure.

He earmarked Rs. 13.63 billion (33.68 per cent) for recurrent Rs. 3.58 billion (8.87 per cent) for fiscal transfers. A major reduction (Rs. 2.16 billion) is made in fiscal transfers.

The provincial government aims to raise Rs. 6.73 billion from internal revenue.

Similarly, it has been estimated that Rs. 11.3 billion will be collected from the revenue distribution,  Rs. 29 million from royalty, and Rs. 2.5 billion from the local levels.

The federal government's fiscal transfer will be reduced by about Rs. 3 billion in the next FY.  This year, Lumbini has received Rs. 18.47 billion in grants which have been reduced to Rs. 15.38 billion for the next fiscal. The fiscal equalisation grant is reduced to Rs. 8.14 billion for the next FY from Rs. 8.54 this year and the conditional grant is adjusted to Rs. 5.83 billion from Rs. 8.71 billion.

Likewise, the special grant has been decreased to Rs. 560 million from Rs. 883 million but matching grant is increased to Rs. 840 million for the next year from 739 million of this year.

The government has allocated Rs.1 billion to implement Chief Minister's Economic Development Programme. Promoting employment by developing skills, capital and technology have got priority. The provincial government has also arranged budget to promote domestically produced alcohol.

 

Gandaki: Rs. 33.42 billion

Similarly, the Gandaki Province government has unveiled a budget of Rs. 33.42 billion for the next fiscal year 2023/24.

Minister for Economic Affairs and Planning of Gandaki Province Jit Prakash Ale Magar presented the new budget at the province assembly meeting.

The government has presented a smaller budget for the next fiscal year as compared to the current fiscal year’s budget.

Out of the budget allocation, Rs. 12.73 billion (38.1 per cent) has been allocated for recurrent expenditure, Rs.  20.19 billion (60.4 per cent) for capital expenditure and Rs. 500 million  (1.5 per cent) for financial management.

It is estimated that Rs. 7.62 billion from the financial equalisation grant received from the federal government and Rs. 9.5 billion from the revenue sharing are the sources of expenditure in the next fiscal year.

The government projected that Rs. 400 million will be received from royalty distribution, Rs. 4.94 billion for conditional grants, Rs. 840 million for supplementary grants and Rs. 700 million for special grants.

It is estimated that Rs. 5.16 billion will be mobilised from the internal sources of the province.

The Minister for Finance has estimated that there will be a cash balance of Rs. 3 billion from the implementation of the programmes for the current fiscal year.

 The Gandaki Province government has reduced the cash subsidy programme through the budget brought and made it production based.

The government has given priority to increasing production and productivity of agricultural goods, promote tourism, employment generation and sustainable and durable physical infrastructure.

 

Sudurpaschim: Rs. 29.26 billion

In Dhangadhi, Sudurpaschim Province government unveiled Rs. 29.26 billion budget for the next Fiscal Year 2023/24.

Economic Affairs Minister of the province, Naresh Kumar Shahi, presented the budget for the next fiscal year at the provincial assembly. The size of the budget is smaller by Rs. 7.48 billion compared to that of the current fiscal year's Rs. 36.74 billion.

According to Shahi, the government has allocated Rs. 9.59 billion (32.79 per cent) for recurrent and Rs. 17.2 billion (58.16 per cent) for capital expenditures. Likewise, Rs. 2.34 billion (8.02 per cent) has been allocated for inter-governmental fiscal transfers and Rs. 300 million (1.03 per cent) for financial arrangements.

The government has allocated Rs. 960 million (Rs. 30 million each) for all 32 constituencies of the province. A total budget of 96 million rupees has been allocated for this programme.

The province aims to raise Rs. 1.50 billion from internal revenue to finance its expenditures. Likewise, Minister Shahi informed that the provincial government is likely to get Rs. 9.41 billion from the federal government in revenue distribution.

Similarly, Rs. 8.52 billion will be received in fiscal equalisation grant from the federal government while Rs. 3.86 billion would be saved from the allocations of the current FY.

It is also said that Rs. 4.51 billion will be received as conditional grants, Rs. 770 million as matching grant and Rs. 620 million as special grants from the federal government.

 

Karnali: Rs. 33.37 billion

Karnali Province government has unveiled a budget of Rs. 33.37 billion for the next fiscal year 2023/24.

Minister for Economic Affairs and Planning of Karnali Province government Bedraj Singh presented the annual income and expenditure of the province at the meeting of the Provincial  Assembly.

The Karnali government has allocated around  Rs. 9 billion (26.97 per cent) under the heading of recurrent expenditure, Rs. 19.57 billion (58.65 per cent) under the capital expenditure, and Rs. 4.80 billion (14.38 per cent) under fiscal transfer.

For the current fiscal year 2022/23, the provincial government had unveiled budget of Rs. 32.74 billion. Despite the reduction in fiscal transfer from the federal government, the provincial government’s budget is bigger by Rs. 1 billion than the current fiscal year.

The province has set a target to mobilise Rs. 836 million from the internal revenue of the province, Rs. 7.41 billion surpluses of the current fiscal year, Rs. 8.84 billion from the revenue distribution received from the federal government, Rs. 10.16 billion for financial equalisation, Rs. 761.6 million for supplementary grants.

It is estimated that Rs. 597.9 million will be mobilised towards special grants and Rs. 18.6 million will be mobilised through foreign aid. In the allocated budget, a total of Rs. 4.80 billion has been transferred to the local level.

Similarly, Rs. 1.16 billion has been allocated to the local level wards through the Chief Minister Employment Programme, said Minister Singh.

Out of the allocated budget, the government has set aside Rs. 10.14 billion for physical infrastructure, transportation and urban development.

Similarly, Rs. 3.53 billion has been allocated for the Ministry of Water Resources and Energy Development, Rs. 941 million to run programmes related to drinking water and sanitation, Rs. 2.11 billion for programmes related to land management, agriculture and cooperatives, Rs. 2.14 billion for industry, tourism, forest and environment.

The budget has targeted to create at least 10,000 jobs every year through Karnali Prosperous Campaign in multi-sector use and multi-stakeholder partnership.

A policy has been taken to expand the scope of taxes related to revenue mobilisation.

 The Koshi Province government unveiled a budget of Rs. 36.24 billion on Thursday.

(Written jointly with Laxman Kafle with inputs from Ram Mani Dahal, Navin Shahi, Bhuwan Karki, Dhirendra Prasad Sah, Abinash Chaudhary.)

Published in The Rising Nepal daily on 17 June 2023.