Productive sector to need Rs 78.29bn in fiscal 2015-16

KATHMANDU: The government needs to spend Rs 78.29 billion next fiscal for recovery and reconstruction activities in the productive sector — agriculture, irrigation, commerce, industry, tourism and financial sectors. The sector has faced total damage and losses worth Rs 178.12 billion or 25 per cent of the total effects.

The Post Disaster Needs Assessment (PDNA) report has made a break-down of the resources required for the recovery and reconstruction works of the productive sector for the next three fiscals, which has a larger contribution in employment, economic growth and capital formation. The report states that the productive sector needs Rs 115.62 billion for recovery and reconstruction works, of which Rs 78.29 billion needs to be utilised next fiscal.

The PDNA has also stressed on ensuring the availability of finance through banking and non-banking institutions, including co-operatives for the recovery of the private sector as it has witnessed huge damage and losses as compared to the public sector. The private sector’s loss stands at Rs 158.079 billion, according to PDNA.

The report has recommended that a large chunk of the budget be spent in the tourism sector next fiscal, which has been severely affected. As per PDNA, the government should spend Rs 29.44 billion in recovery and reconstruction of the tourism sector. PDNA has recommended expenditure of Rs 38.71 billion in the sector in the next two fiscals. The total effect in tourism sector stands at Rs 81.24 billion.

In the next fiscal, tourism sector may get recovery budget of Rs 10.87 billion and reconstruction budget worth Rs 18.57 billion as per recommendations of PDNA.

The report states that the financial sector could receive reconstruction and recovery budget worth Rs 21.97 billion next fiscal, but the recommendation for the same is of Rs 33.47 billion. Recovery has been indicated to be the major challenge for financial sector stability and an estimated Rs 26.81 billion is required within next three fiscals.


A higher amount of resources could be required for financial stability as banks and financial institutions could suffer from higher amount of loan loss due to damages and loss of other businesses. Moreover, line of credit facility worth Rs 3.20 billion may have to be extended to insurance companies next fiscal.

Likewise, agriculture sector, which engages 60 per cent of the working group population, needs Rs 10.77 billion next fiscal for recovery and reconstruction works. A total of Rs 3.57 billion is estimated to be required for the recovery of agriculture sector next fiscal, according to PDNA. Under the reconstruction need, the PDNA has stressed on crucial issues like reconstructing agriculture infrastructure and restocking livestock. “The loss of food and livestock, which were major sources of income of the rural households will potentially cause a severe income shock,” said the PDNA report.

Similarly, as per PDNA, the commerce and industry sectors need to spend Rs 11.55 billion and Rs 4.44 billion, respectively, in recovery and reconstruction activities. More importantly, total working capital required for enterprises (related to trade and commerce) destroyed in the earthquake stands at Rs 2.22 billion for next two fiscal. Likewise, working capital of Rs 2.71 billion has been proposed for affected industries for next two fiscals.

Apart from this, irrigation sector needs to spend Rs 383 million in recovery of irrigation schemes and office buildings of irrigation projects in the next fiscal year.