Nepal | July 05, 2020

Fiscal budget to prioritise revitalising crisis-hit economy

Sujan Dhungana
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Kathmandu, May 10

Finance Minister Yubaraj Khatiwada today mentioned that the budget for the upcoming fiscal year would chiefly dwell on resolving multi-lateral effects caused by the COVID-19 pandemic and ensure achieving economic and developmental goals.

Along with this, the budget will also focus on expansion of health infrastructure, revival of the economy with necessary encouragement to the private sector, promotion of capital formation, job creation and achieving social justice through good governance, Khatiwada said while presenting the principles and priorities of the budget for fiscal 2020-21 today in the House of Representatives.

The minister said the budget would dwell on implementation and execution of ongoing projects and policies over new projects amid additional financial liabilities as a result of the coronavirus contagion.

“Existing projects will be re-prioritised and budget will be allocated accordingly and the government will adopt austerity measures in public expenses amid revenue shortfall,” said Khatiwada.

“The budget and resource allocation will focus on executing the 15th periodic plan of the government, achieving sustainable development goals and Nepal’s goal of graduating from the least developed nation status,” he added.

Acknowledging that the government is set to miss economic and development goals projected for this fiscal due to the spread of coronavirus, Khatiwada said the government would adopt monetary and financial instruments through the budget to cope with and reduce the impact of COVID-19. According to him, the government will also raise tax range for the upcoming fiscal while tax rates will not be revised.

“Like other nations, Nepal has suffered serious economic losses due to coronavirus and the labour market, along with tourism and supply situation, have been severely affected. While sectors severely affected by the pandemic, including the tourism sector, will be given priority, necessary supportive measures will be taken to enhance business growth and improve investment climate in the country,” said Khatiwada.

The budget will also focus on providing employment to those returning from abroad in agriculture and other sectors and promote entrepreneurial growth to address post-crisis employment challenges.

“Along with the manifesto and the government’s goal, the budget will also emphasise controlling the COVID-19 pandemic and revitalising the economy,” he added.

Khatiwada added that the government would provide tax relief to the business community through the budget to help revive and upscale businesses. “The budget will have provisions to help small and medium enterprises recover.”

The pre-budget discussion began in the Parliament today. Lawmakers will dwell on the budget’s principles and priorities in the following meeting of the Parliament.

Following the pre-budget discussion, the government’s policies and programmes for the upcoming fiscal will be presented on May 15 and the annual budget will be presented on Jestha 15 (May 28).

In the offing

  • New monetary and financial instruments to cope with multilateral effects of COVID-19
  • Tax relief for businesses
  • Reprioritisation of existing projects
  • Job creation, entrepreneurial growth
  • Austerity measures in public expenses
A version of this article appears in e-paper on May 11, 2020, of The Himalayan Times.

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