KATHMANDU, MAY 29
The government today unveiled a budget of Rs 1,647.57 billion for fiscal year 2021-22, with priority accorded to battling and softening the blow of the coronavirus pandemic.
The size of the federal budget presented through the ordinance by Finance Minister Bishnu Prasad Poudel today is 11.73 per cent bigger than the budget of Rs 1,474.64 billion announced for the current fiscal year, 2020-21.
The budget for the current fiscal was, however, reduced by around nine per cent to Rs 1,344.68 billion during the half-yearly budget review in February. Thus, compared to the revised budget size, the budget for next fiscal year is even bigger at 22.52 per cent.
While the earlier budgets used to factor in grants to be distributed to the lower levels of the government as recurrent budget, the budget announced for next fiscal has allocated that amount separately. Therefore, the allocation of Rs 678.61 billion to be utilised as recurrent expenditure for the next fiscal is significantly lower than Rs 948.94 billion allocated and later revised to Rs 914.78 billion for the current fiscal.
The allocation for capital budget is Rs 374.26 billion, while Rs 207.97 billion has been earmarked for financing, which is 22.7 per cent and 12.6 per cent of the total budget for the fiscal 2021-22, respectively.
Similarly, Minister Poudel announced that Rs 386.71 billion would be transferred to the provincial and local governments, which is 23.5 per cent of the total budget. Of the grant distribution, Rs 325.74 billion or 84.2 per cent will be equalisation grant, while 60.97 billion or 15.8 per cent will be conditional grant.
Meanwhile, the government has set the revenue collection target for the next fiscal at Rs 1,024.90 billion. It plans to seek foreign grants and loans of Rs 63.37 billion and Rs 309.29 billion, respectively. Furthermore, the government plans to finance its expenses through domestic loans amounting to Rs 250 billion.
The annual economic growth of the country has been set at an optimistic 6.5 per cent for the next fiscal year 'as the government will make efforts to control the COVID-19 spread and help revive businesses and the economy'.
Interestingly, the government had recently conceded that it would be challenging to achieve the revised down economic growth target of 4.01 per cent set for this fiscal due to the second wave of the coronavirus pandemic ravaging the country and the prohibitory measures to curb the spread of the infection.
The economic growth target for this fiscal had earlier been set at seven per cent.
Vowing to ensure that all citizens would be inoculated against COVID-19, Minister Poudel said Rs 26.75 billion has been allocated to procure vaccines.
Similarly, Rs 37.57 billion has been earmarked to curb the pandemic, while Rs 5.60 billion has been allocated to purchase medicines and equipment to control the pandemic.
A budget of Rs 122.77 billion allocated to the Ministry of Health and Population, however, pales in comparison to Rs 180.04 billion allocated to the education sector - the biggest chunk given to any particular sector.
To provide some relief to COV- ID-battered industries, the government has announced waiver on the demand charge for electricity throughout the lockdown period to hotels and production-based industries.
Also, the government has announced 100 per cent waiver for consumers consuming only 20 units of electricity per month during the lockdown/prohibitory period and 100 per cent waiver on the drinking water bill for consumers consuming only 20,000 litres per month during the same period.
The finance minister also announced licence and renewal fee waiver for sectors such as films, handicraft, aviation, media, advertising, health clubs, among others.
In addition, the government will contribute the amount to be paid by organisations and workers to the Social Security Fund for the months of mid- May to mid-June and mid- June to mid-July.
To encourage entrepreneurship, the government has announced a 100 per cent rebate on income tax for start-ups for up to five years from the date of commencement of operation, a onestop system to facilitate the establishment and operation of such start-ups, among other provisions.
In an attempt to revive the badly battered tourism sector, the government has decided to allow 10 days of paid leave to civil servants and free one-month visa to tourists.
Moreover, the government has increased social security allowance by 33 per cent and raised the monthly allowance for senior citizens by Rs 1,000 to Rs 4,000.
Also, the salary of all civil servants has been hiked by Rs 2,000.
In a bid to encourage the use of electric vehicles, the government has decided to waive the renewal fee and road tax on EVs for the next five years, while also setting the target to replace light vehicles running on fossil fuel by EVs by 2032.
In this regard, a taskforce of experts will be formed, the minister said.
Other salient features
• Rs 10.3 billion for railways development
• Rs 6.39 billion for Postal Road
• Rs 15.34 billion for development of East-West Highway
• Rs 8.15 billion for fast track road project
• Rs 9.85 billion for Kathmandu-Nagdhunga-Sisnekhola tunnel construction
• 300 bridges to be built in next fiscal
• Rs 1.80 billion for Tinkune-Jadibuti tunnel construction
• 1,629 MW hydroelectricity to be added to the national grid in the next fiscal
• Electrification in additional 43 districts in next fiscal
• Rs 4 billion for rural and community electrification
• Rs 4.7 billion for construction of Butwal-Gorakhpur inter-country transmission line and Kohalpur-Lamki – Lamki-Bareli inter-country transmission lines.
• Rs 37.61 billion for construction of other transmission lines and sub-stations
• Rs 3.31 billion for development of urban centres across Pushpa Lal Highway and Postal Highway at 27 places
• Rs 6.95 billion for upgradation of Tribhuvan International Airport
• Rs 8.50 billion for completion of Pokhara International Airport
• Commercial mining for Dhauwadi Iron Industry to start from next fiscal
• Petroleum exploration to be completed in next two years in Dailekh district
• Necessary arrangement to be made for the conservation, promotion and use of uranium and radioactive materials found in Lomanthang of Mustang
• Excavation to start in Baitadi, Udayapur, Okhaldhunga, Tanahun and Jajarkot for exploration of precious stones
• Thatched roofs of 168,000 households to be replaced with tin roofs and Rs 75,000 to be given per household for the same
• Houses to be built for indigent and deprived communities in 73 districts under Janata Awas Karyakram
• Journalists to get free treatment in government hospitals
• Media houses to get subsidised loans
• All Nepalis to get national identity cards in the next two years
• Civil service posts shall be filled within six months
• Grant based on merit to be provided to students
• Ban on use of plastic bags with thickness of less than 40 microns from fiscal 2021-22
• 'Made in Nepal, Make in Nepal' campaign to promote Nepali products
• Local Infrastructure Development Partnership Programme scrapped due to resource constraints
• 50 land banks to be established to facilitate proper use of land
• Poverty Alleviation Fund to be discontinued
• Prime Minister Employment Programme to be given continuity; 200,000 jobs to be created
• Water from Himalayan region to be exported
A version of this article appears in the print on May 30, 2021, of The Himalayan Times.