At a time when some left-leaning and Madhesh-based political parties were doubting over the commitment of the government for the development of cooperatives, the budget has clearly recognized the cooperative, public and private sector as the major players of economy.
“Coordinative and promotional role of private, cooperatives and public sectors is important for economic activities. Role of government will be strengthened to tide over the imbalanced and malpractices cropped up in market economy. Role of cooperative will be made more stronger to increase production and employment at local level,” said Finance Minister Shankar Koirala, unveiling the budget.
The new budget announced by Finance Minister Shankar Koirala gives continuity to most of the programs included in the previous fiscal year’s budget. Allocations for the Constituent Assembly (CA) elections and double-digit hike in the salary of civil servants have significantly jacked up recurrent expenditures.
The government has allocated Rs 353.42 billion or 68 percent of the budget for recurrent expenditure, Rs 85.10 billion or 16.45 percent for capital expenditure and Rs 78.72 billion or 15.22 percent for financial management. The budget plans to mobilize Rs 354.5 billion through revenues, Rs 69.54 billion through foreign assistance and the deficit through domestic borrowings. The government has set target to increase revenue mobilization by 20 percent to arrange the resources for increased recurrent expenditure.
-Agriculture Rs 21.40 billion
-Education Rs 80.95 billion
-Irrigation Rs 12.56 billion
-Physical infrastructure Rs 35.27 billion
-Health Rs30.43 billion
-Energy Rs 30 billion
-Economic growth target 5.5 percent
- To contain inflation at 8 percent
“The government’s main priority is to successfully conduct the CA elections and the government has allocated Rs 16 billion for it,” said Koirala, adding that allocations have also been made for hydropower development, construction of roads and railways, irrigation, drinking water and tourism.
The government has made some attempts to get 5.5 percent economic growth with high priority in agriculture, education, irrigation, infrastructure, energy and exports promotion in the coming fiscal year. Nepalese economy saw only 3.6 percent growth during the fiscal year 2012/13. Amid double digit inflation, the budget has also set target to contain the inflation at 8 percent.
The budget has also attempted to win the heart of private sector with some business incentives in investment, industrial and export sectors.
“We appreciate that government which has come up with full-fledged budget with some incentives to boost confidence of private sector. The budget has also recognized the role of private sector in the economy,” said Bhaskar Raj Raj Karnikar, Senior Vice President of Nepalese Chambers of Commerce and Industry (FNCCI).
The budget has also included Pashupati Area Development Trust, Lumbini Development Trust, President Chure Bhawar Conservation Project and Bheri-Babai Multipurpose Diversion project among national pride projects. The budget has made an allocation of Rs 30 billion for hydropower development and construction of transmission lines.
For promotion of solar energy, Rs 1.11 billion has been allocated under the solar energy promotion program that will benefit 125,000 households through generation of 4MW electricity.
The government has also allocated Rs 1.81 billion for road expansion works in the capital and Rs 3.58 billion for construction of strategic roads and local bridges.
In a bid to boost the morale of government employees, the government has also hiked their salary by 18 percent. They will also be provided Rs 1,000 in monthly allowance.
Similarly, the government has allocated a total Rs 21.40 billion, up by around 81 percent of the current fiscal year’s revised allocation for the agricultural sector.
Likewise, Rs 6.07 billion has been allocated for subsidizing fertilizers, seeds, technology and mechanization and Rs 1.75 billion for agriculture research.
Amid bleak performance by community schools, the budget also plans to provide Rs 500,000 each to two best performing community schools and introduce performance contract system for head teachers of such schools. Education sector budget has reached Rs 80.85 billion, up by Rs 60.13 billion of current fiscal year’s revised allocation.
The government has also made arrangements for free treatment to heart patients above 75 years and below 15 years of age. As at least 400,000 youth enter the labor market annually, the government plans to spend Rs 160 million to provide skill development, entrepreneurship and self-employment training to 22,000 youths and vocational trainings to another 50,000 youths.
Amid deteriorating industrial environment in the country, the budget attempts to restore private sector confidence by providing them incentives. The budget also envisions development of Special Economic Zones in additional four places -- Nawalparasi, Kailali, Dang and Surkhet, smooth electricity supply to industrial estates and establishment of international standard exhibition center in the capital. “The government considers the private sector as a key vehicle for economic growth,” Koirala said.
Amid ballooning trade deficit, the budget has come up with export incentive programs. The budget has also introduced fast track service for exporters and doubled the amount allocated for