Rs. 1.948 trillion budget, Infrastructure and hydroelectricity get priority

Aim to create 400,000 employment

By Modnath Dhakal/Yogesh Pokharel

Kathmandu, May 28: Finance Minister Bishnu Prasad Poudel Saturday presented budget of Rs. 1.0485 trillion for coming Fiscal Year 2016/17 with special priority to post-quake reconstruction, infrastructure development and constitution implementation.

FM Poudel has allocated Rs. 617.16 billon for regular expenditure, Rs. 311.94 billion for development programmes and Rs. 119.81 billion for financial management.

Regular expenditure, development programmes and financial management got 58.9, 29.7 and 11.4 per cent share of the total budget respectively.

This budget is 20 per cent larger compared to the budget of current FY 2015/16 while it is larger by 49.6 per cent than the revised estimates of the budget of current fiscal.

This is the first budget unveiled following the promulgation of the new constitution. It contains several popular programmes that bring cheers to the people of various walks of life ranging from senior citizens to civil servants to those living in the far-flung districts of Karnali zone.

Finance Minister Bishnu Prasad Poudel

The government plans to manage required resources for the budget from revenue, foreign grant, principal repayment and domestic borrowing.

FM Poudel plans to generate Rs. 565.89 billion from revenue, Rs. 106.89 billion from foreign grant, Rs. 10 billion from principal repayment, Rs. 111 billion from domestic borrowing and rest from foreign loan and other sources.

Major thrust of the budget include reconstruction of quake damaged structure, hydro-electricity generation, transmission line extension and distribution, infrastructure development like road, airport and irrigation, employment generation and other pillars of economy like tourism and manufacturing.

“I have also given priority to urban and local infrastructure development, education, health and drinking water, social security and good governance,” said the Finance Minister.

With the implementation of the budget, the government aims at achieving the economic growth rate of 6.5 per cent and containing inflation at 7.5 per cent.

In the current fiscal, the economy is estimated to be up by 0.8 per cent and inflation to remain at 9.5 per cent.

 Minister Poudel raised the salary of government employee by 25 per cent, doubled the social security allowances, and promised to generate 400,000 jobs within a year.

Tax ceiling raised

Income tax ceiling is raised to Rs. 350,000 for single and Rs. 400,000 for married individual which was Rs. 250,000 for single and 300,000 for married individual.

Customs and excise duty on alcohol, cigarette and beer have been increased.

“I have expanded the tax-base. In order to give relief to the small and medium tax-payers and bring them into the tax-net under the voluntary declaration system, I have decreased income tax on business transaction,” said Poudel.

Infrastructure and agriculture

Through the budget, the government has promised to link all villages with motorable road within two years, implement contributory pension system and establish a separate monitoring mechanism for cooperative sector.

The government plans to end load shedding within two years and generate 10,000 megawatt of additional hydropower within next two decades.

All structures related to education and health will be reconstructed within three years and all quake damaged structures will be reconstructed and rehabilitated in the next five years.

"Integrated development will be promoted in the quake damaged settlement. Likewise, special programmes will be implemented for the rehabilitation of flood and landslide victims in Dang, Banke, Bardiya, Surkhet, Dailekh, Doti, Darchula, Sindhupalchowk and Taplejung districts,” read the budget speech.

The budget has given special attention to the two regional airports in Pokhara and Lumbini, second international airport in Nijgadh, Postal Highway, North-South link roads, reservoir based hydroelectricity projects, Kathmandu-Terai Fast Track road, irrigation, Mid-Hill Highway, East-West Highway and other urban infrastructure.

New programmes like Prime Minister Agriculture Modernization Project, development of zones and super zones, and self-reliant programmes for meat, milk, egg and other agro-products are announced in the budget.

Finance Minister Poudel has allocated budget for two satellite cities in the Kathmandu Valley, 10 model cities along the Mid-Hill Highway and rural infrastructure development.

“I have allocated Rs. 500 million each to 18 municipalities in the Terai region for infrastructure and social development as per the Intensive Urban Development Programmes,” said Poudel.

Likewise, reconstruction of quake-damaged President and Vice-President’s office, Singha Durbar, Supreme Court, Legislature-Parliament, Lawmaker’s residence, Ministers’ quarters and General Headquarters of Nepalese Army will be initiated in the coming fiscal year.

Railways and Shipping

The government has allocated budget for the detailed project report of East-West Electric railway,  Rashuwagadhi-Kathmandu-Pokhara-Lumbini railway and Metro railway in the Kathmandu Valley.

“Construction of the track bed of Bardibas-Simara railway will be completed in the next fiscal and spreading of tracks will begin,” informed Minister Poudel.

Similarly, he promised to expedite preparations for policy making required to operate Nepal’s own ship as per the country’s past experiences and landlocked country’s right to use the sea route.