Nepal | May 28, 2020

FinMin clarifies budget not as expansionary as portrayed

Himalayan News Service
Share Now:
Finance Minister Bishnu Prasad Paudel

File – Finance Minister Bishnu Prasad Paudel talking to THT journalist Rupak D. Sharma in Kathamndu on Sunday, January 31, 2016. Photo: THT

Kathmandu, May 29

At a time when the fiscal budget for 2016-17 has been highly criticised for its distributive approach, Finance Minister Bishnu Prasad Paudel, today, defended that all the allocations made in the budget are targeted, planned and output oriented.

Opposition parties have been criticising that the budget for the upcoming fiscal presented by Minister Paudel in the Legislature-Parliament on Saturday is expansionary and distributive and poses a risk of high inflation.

The fiscal policy has doubled the budget for the Constituency Infrastructure Special Programme for social security allowances and increased grant for village development committees and municipalities, and Constituency Development Programmes. Furthermore, it has also raised the salary of government staffers by 25 per cent.

However, Minister Paudel said that the budget for next fiscal is not as expansionary as portrayed by critics. He stated that the budget has been expanded by just 28 per cent as compared to the current budget. “Share of recurrent expenditure in total budget is less than 0.1 per cent and the capital expenditure has been increased by only 4.5 per cent as compared to previous budget.”

The finance minister accepted that the budget is ambitious to some extent saying, “Since the country has embarked on a path of rapid economic growth since this fiscal as per the spirit of the new constitution which was promulgated in September last year, the traditional thinking and ways of working will not lead the country towards the desired goal of economic prosperity.”

He also clarified that the government has not breached any fiscal discipline to generate resources for budget financing. Target for revenue growth and domestic borrowing has not been increased unnaturally, according to Minister Paudel.

The minister highlighted that the fiscal budget has largely focused on productive capacity enhancement, reconstruction of earthquake ravaged infrastructure, new infrastructure projects like hydro electricity, transmission lines, airports and road connectivity, and aimed to stimulate economic growth to 6.5 per cent in next fiscal from dismal economic growth of 0.77 per cent in this fiscal.

Though it contradicts basic macroeconomic concept, the fiscal policy has tried to keep positive correlation between growth and inflation. It has set a target to control inflation at 7.5 per cent in next fiscal.

Yubaraj Khatiwada, vice chairman of National Planning Commission and one of the architects of fiscal policy 2016-17, said that they will be able to tame the inflation at the desired level in next fiscal by improving the current supply side constraints. “If we analyse the nature of inflation, it is mainly caused by the high food prices and the government has allocated sufficient budget to boost agriculture production in a bid to address the supply side constraints,” he said. “The government also has not made any changes to the consumption taxes, which will also support to control inflation.”

The fiscal budget for 2016-17 has allocated above Rs 30 billion to boost agriculture productivity and livestock farming to address the supply side constraints. It has offered many grant schemes and lowered credit interest rate to lure people to the agriculture sector.

A version of this article appears in print on May 30, 2016 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

US President Donald Trump, Twitter account

Twitter fact-checks Trump tweet for the first time

SAN FRANCISCO: Twitter on Tuesday for the first time prompted readers to check the facts in tweets sent by US President Donald Trump, warning that his claims about mail-in ballots were false and had been debunked by fact checkers. The move marked a dramatic shift for the social network, Trump Read More...

Darchula Nepali stranded

Indecision prevails on managing migrants mulling return to Nepal

KATHMANDU, MAY 26 The government is yet to take any concrete decision on how to manage quarantine and health facilities, accommodation and visa process for those preparing to return to the country from abroad, including those from major labour destinations. Government officials have made frequ Read More...

More PCR tests necessary for accurate diagnosis

Kathmandu, May 26 A woman, who tested positive for coronavirus infection and was undergoing treatment at Tribhuvan University Teaching Hospital, tested negative twice in the rapid diagnostic test. However, she tested positive for the infection in the polymerase chain reaction test in the National Read More...

Home quarantined pregnant woman dies in Saptari

Rajbiraj, May 26 A pregnant woman staying in home quarantine at Simara Chowk of Kanchanrup Municipality, Saptari, died today. Saptari District Hospital said that the woman aged 24 had died at home at around 7:00am today. “The deceased woman’s throat swab sample was collected and sent to BP Read More...

Deuba renews demand for relief package to journos and media houses

Kathmandu, May 26 Nepali Congress President Sher Bahadur Deuba has once again called on the government to announce relief package for journalists and media houses. Issuing a statement on the occasion of the 29th anniversary of Nepal Press Union today, Deuba expressed concern about scores of jo Read More...

Quarantine facility poses risk of virus spread

Bajura, May 26 Quarantine facility at Malika Higher Secondary School in Bajura headquarters, Martadi, is at high risk of COVDI-19. A total of 93 people, who recently returned from India have been kept in the quarantine facility. They came from red-zone in India. But, they have not undergone Read More...

Bring gender-responsive budget: HoR panel

Kathmandu, May 26 The Women and Social Development Committee of the House of Representatives has directed the federal and provincial governments to bring gender-responsible budget for the fiscal 2020-21 in the wake of adverse situation created by the COVID-19 pandemic. Chairperson of the parli Read More...

Govt projects 2.3 per cent economic growth for this fiscal

Per capita income to increase to Rs 126,018 Despite joblessness absolute poverty to decline KATHMANDU, MAY 26 Halt in economic activities as a result of the lockdown that the government has imposed to control the spread of the COVID-19 contagion was expected to hit the country's econom Read More...