Finance Minister unveils Rs 285.93b budget

Finance Minister Surendra Pandey presented Rs 285.93 billion budget for the fiscal year 2009-10 at the legislature-parliament on Monday. Of the total expenditure, the government has proposed Rs.135.58 billion (47.42 percent) for general administration and Rs. 150 billion and 347.5 million (52.58 percent) for development related expenses. Out of the estimated sources of financing, Rs. 161 billion 73.6 million will be borne from the current source of revenue. Out of the total foreign assistance of Rs. 78 billion 516.2 million, Rs. 56 billion 955.6 million will be borne by foreign grants and Rs.21 billion 560.06 million by foreign loans. The budget deficit has been estimated to be around Rs. 46.34 billion even after mobilising these sources.

The budget projects 5.5 percent Gross Domestic Product (GDP) at the end of the fiscal year 2009/10. The growth rate in agriculture sector is expected to be at 3.3 percent and the non-agriculture sector at 6.6 percent. Estimating that the price level will gradually improve and the government aims to reduce the inflation rate to 7 percent. The inflation rate crossed 13 in the current fiscal year. The government has allocated Rs 46.5 billion to education sector and Rs 18.67 billion to health sector for the fiscal year 2009/10.

Similarly, Rs 25.24 billion has been set aside for local development whereas agriculture and irrigation have received Rs 8.06 billion and Rs 7.95 billion respectively. On the other hand, transportation sector (both road and air) has received 19.75 billion. Likewise, Rs 15.3 billion has been earmarked for defense while Rs 14.55 billion has been allocated for the police forces.

The government has earmarked Rs. 2.11 billion for post-conflict development and reconstruction. Under this programme, construction of 260 kilometers of road and construction of 40 bridges will be started; 96 suspension bridges and 104 small infrastructures will be constructed; and 80 drinking water projects will be completed. Likewise, Rs. 1.3 billion will be spent for relief, land development and rehabilitation of the victims of the floods in Koshi and Far and Middle West; and for immediate relief and protection programmes to operate immediately after natural disasters.

According to the Finance Minister, the government will give priority to the implementation of the agreements with various groups including the Madhesis and Janajatis. He stated that poverty alleviation programme currently operational targeting at the socially and economically backward community and households below poverty line would be expanded to all the districts. Rs. 2.72 billion has been allocated for this programme.

Similarly, the budget aims at promoting private sector investment and make the market competitive. A high-level Investment Board headed by the Prime Minister would be formed to attract national and foreign private investment on major infrastructure projects. The Finance Minister said the government would not make it mandatory to reveal income source for manufacturing industries using more than 50 percent indigenous raw materials, employing more than 300 national workers or those of national importance such as hydro electricity projects, international airports, tunnel ways, road ways or railways until mid April, 2019. Likewise, excise duty on items produced by using more than 90 percent domestic scraps has been waived. In the budget, arrangement has been made for compulsory collection of VAT on the construction of buildings, apartments or shopping complexes for commercial purposes exceeding the value of Rs. 5 million. The local development tax has been annulled.

Likewise, income tax ceiling for individuals has been raised to Rs. 160,000 from Rs. 115,000 and Rs. 200000 for married couples from the current Rs. 140,000. Capital gain tax is has been reduced from 15 percent to 10 percent while eighty percent duty on milk tanker has been exempted while the prevailing customs duty has been reduced to 30 percent from 40 percent.

Rs. 7.83 billion has been earmarked as the grant to Village Development Committees on the basis of their respective population, cost and geographical area.Rs 2.11 billion has been earmarked for the construction of 6.5 kilometer of main works out of 26.50 kilometer tunnel construction under Melamchi Drinking Water Project being implemented to provide easy access to the supply of drinking water in Kathmandu Valley.

In order to facilitate electricity generation, the government has given continuity to the arrangements of waivers of license for up to 3 MW and waivers of detailed environment impact assessment for up to 50 MW. Similarly, waivers on environment impact license will be provided for the construction of extension lines under the action plan of National Energy Crisis Mitigation. Similarly, no environment impact assessment will be required for the construction of extension line that occupies less than 5 hector of forest area. A total of Rs. 1 billion 570 million has been earmarked for community and rural electrification programme. Self Employment Scheme introduced by the previous Maoist-led government has been given continuity by the new government. Unemployed youths undertaking activities in commercial agriculture, agro-industries or service sectors, will be provided with non-collateral loan up to Rs. 200,000 from the banks.

The Finance Minister also proposed to distribute bio-metric smart card to all Nepali citizens as a national identity card, which can also be used for election purpose. This card will be arranged for drawing social security allowances, including elderly allowance, from any bank. A separate entity will be created at central level for managing implementation of this system, registering and archiving the records of personal events, and for execution of social security programmes.
Source: Nepalnews.com