Finance Minister unveils first federal budget of Rs 1.31 trillion
KATHMANDU: Finance Minister Yubaraj Khatiwada presented a federal budget of Rs 1,315 billion for the fiscal 2018-19 in the joint session of the House of Representatives and National Assembly here today, with a major focus on transforming the production sector and development of physical infrastructure.
Along with growth target of eight per cent and aim of creating fresh jobs for 500,000 individuals, the fiscal budget has set targets for each sector from the allocated resources.
Economists and experts have termed the budget ‘realistic and balanced’. Former finance secretary Rameshwore Khanal said the finance minister seemed to have realised that prosperity could not be achieved through distributive and populist programmes similar to that launched by past communist governments. The federal budget has encouraged investment in the economy considering how low investment is a major constraint for economic growth.
Finance Minister Khatiwada, who had reiterated channelising resources of the banks and financial institutions to production sector, has unveiled loan schemes for migrant returnees, women, youth and members of Dalit community.
The federal budget has announced project loan of up to Rs 1 million for returnee migrants based on certification of their skills. The fiscal budget has also announced loan of Rs 700,000 to youths against collateral of their academic certificates. Education loan will be provided at five per cent interest to students of economically-backward and marginalised groups. The budget has provision to provide guarantee on both aforementioned loan schemes and insure the enterprise run by the borrowers.
The federal budget has announced subsidising interest rate by up to five per cent on loans of up to Rs 1 million for Dalits on group guarantee, to encourage them towards community-based production schemes.
The budget has announced loans of up to Rs 1.5 million for women-run projects with specific skills on group guarantee by subsidising interest rate by six per cent. These schemes aim to boost production and support poverty reduction in an inclusive and gender-friendly manner.
The fiscal budget has announced foreign direct investment will be discouraged in non-tradable sectors and FDI will be promoted in sectors that produce goods and services for exports and will have optimum value addition in the economy. The budget has offered five per cent cash incentive on exports.
The budget has announced incentives to boost agriculture production. The government will bear 75 per cent of insurance premium on agriculture, livestock and fishery. The federal budget has allocated Rs 5 billion for subsidising interest in agriculture credit for the fiscal 2018-19. Likewise, 25 per cent grant will be provided to farmers’ cooperatives for purchasing equipment for processing milk, meat, fruits and vegetables and similar amount of grant will be provided for establishing factories of silk, cotton and wool. Sugarcane growers will get grants based on production.
A total of Rs 3.89 billion has been allocated for rehabilitation of bonded labour force.
On the other hand, the budget has allocated Rs 10.99 billion for major irrigation projects, namely, Bheri-Babai diversion, Rani-Jamara-Kulariya, Sikta and Babai irrigation projects.
The fiscal budget has given due priority to tourism sector and allocated Rs 5.2 billion for development of the sector with the aim of bringing two million tourists in the next two years.
The federal budget has allocated resources efficiently for infrastructure projects to address the infrastructure bottlenecks and unleash economic potential. It has allocated Rs 19.35 billion for improvement in aviation infrastructure. To take forward the energy (generation, transmission) projects and augmentation of existing system, the federal budget has allocated Rs 83.9 billion for energy sector.
A total of Rs 109.38 billion has been allocated for transport infrastructure — roads, rails, tunnels, among others — and Rs 151 billion has been allocated for post-earthquake reconstruction.
Apart from regular projects, the fiscal budget has announced Madan Bhandari East-West Highway along the Chure range as a new priority project and allocated Rs 4.5 billion for it.
Former finance minister Ram Sharan Mahat alleged that a large chunk of the budget worth Rs 156.28 billion, which is around 12 per cent of the total budget, has been concentrated in the prime minister’s office, which is the highest amount in the history of budget system.
The fiscal budget, however, has given continuity to constituency development programme and allocated Rs 40 million to each of the 275 constituencies despite public criticism. The fiscal budget has given due priority to skill development at the school level and allocated Rs 840 million for vocational education.
The federal budget has announced health insurance of Rs 100,000 for senior citizens and raised the life insurance amount of civil servants to Rs 200,000 instead of raising social security amount and salary. The government will bear 50 per cent of the premium of insurance of civil servants.
The federal budget has transferred Rs 113.43 billion to seven provinces and Rs 195.05 billion to 753 local bodies in equalisation and conditional grants. Under the revenue-sharing scheme, the provinces and local bodies have received Rs 60.42 billion and Rs 53.82 billion, respectively, from the divisible fund.
The provincial governments will present their budget before provincial assemblies by mid-June and the local governments will present budget to the budget assembly 20 days ahead of the beginning of the fiscal year calendar.
KATHMANDU: Finance Minister Yubaraj Khatiwada has launched the first ever federal budget of Rs 1.315 trillion for the fiscal year 2018/19, today.
Out of the total budget, government aims to utilise Rs 845.5 billion as recurrent expenditure. Likewise, Rs314.28 billion and Rs155.18 billion have been earmarked for capital expenditure and financing provision, respectively.
Moreover, the government has set a revenue collection target of Rs 831 billion. Likewise, the government will seek foreign grants and loans of Rs58 billion and Rs 253billion, respectively. Internal loan amounting Rs172 billion is expected to balance the expenditures and sources of the budget.
Economic growth in the upcoming fiscal has been projected at 8 per cent.
Government has prioritised generation of employment opportunities, promoting agriculture and tourism sectors, conserving water resources, enhancing quality of public service delivery in the first federal budget.
Rs 3.10 billion has been allocated to initiate Prime Minister Employment Programme with an aim to generate employment opportunities. Moreover, the government has decided to provide 5 per cent concessional loan of Rs 700,000 backed by educational certificates to help young entrepreneurs to launch their ventures.
With financial coordination with all local levels, the government has decided to establish at least one health centre in all of the 1200 wards within two years. In the first phase the government will grant Rs4 billion to the locals levels for establishing health centres. Likewise, the government has decided to depute at least one doctor in all of the health centres in the country. The government has allocated Rs 56.41 billion for the development of medical sector. Every community school to get high speed internet connection
Sector-wise Budget allocation:
- Health: Rs 56.41 billion
- Education, Science and Technology: Rs 134 billion
- Agriculture: Rs 33.71 billion
- Tourism: Rs 5.20 billion
- Energy: Rs 83.89 billion
Budget Plan Highlights:
- Education: The current state of Universities will be upgraded. Curriculum of schools will be improved, instilling a feeling of nationalism and responsibilities in the students.
- Government to establish one stadium in each of the seven provinces.
- Provision of air ambulances for emergency rescue service for pregnant women of rural areas.
- Awareness on social ills such as witchery, chhau-padi among others to eventually eradicate such malpractices.
- Women, Children and Senior Citizens: Initiatives would be taken to end violence against women. Priority would be given to children with disabilities. Retreats would be developed for elderly citizens.
- Health insurance of Rs 100,000 for senior citizens above 70 years of age.
- Government waives off loans taken by farmers from Sana Kishan Cooperative.
- Agriculture Learning Centres to be established at all local levels.
- Natural zoo and trails to be established in possible tourist destinations.
- Cultivable lands shall not be used for constructing houses or other structures.
- Government allocates budget to carry out feasibility study of iron mines and to carry out the mining.
- Budget provision has been made to conserve water sources in the mountainous regions.
- Rs 16.58 billion allocated to forest and environment sector.
- Noise pollution, environmental pollution, rampant dust in Kathmandu to be brought under control.
- Government announces five per cent export incentive.
- Visit Nepal 2020 to be held to promote tourism.
- Government to upgrade petroleum storage capacity, to hold fuel for three months.
- Provision will be made towards the security of mountaineers and trekkers.
- Aviation infrastructures to be expedited. Master-plan to upgrade domestic airport, Rs 19.35 billion allocated to aviation sector.
- Internal tourism to be promoted with the slogan 'Pahile Desh Ani Bidesh' (country before foreign country).
- Helipad would be constructed at all local levels.
- Government has provisioned budget for the conservation of drinking water sources to manage drinking water in urban areas.
- Allocation of Rs 24.5 billion to develop and conserve drinking water and manage water sources.
- National Cleaning Campaign to be initiated in the upcoming fiscal.
- Toilet to be constructed in every house. Country to be made open defecation free zone.
- Smart toilets with modern facilities to be built in public places.
- 3,000 megawatts of electricity to be generated through public investment.
- North-South transmission lines to be constructed within five years.
- Rs 83.89 billion allocated to develop energy sector.
- Budget has been allocated for the construction of Federal Parliament building.
- Government launches Janata Aawas Programme, to provide Rs 50,000 as incentive to marginalised communities to buy zinc sheets for their houses.
- Provision to make various rivers of Kathmandu Valley sewage free.
- Rs 4.50 billion allocated to construct Madan Bhandari Highway.
- Naubise Naghdhunga tunnel project to be initiated in the upcoming fiscal.
- Rs 109 billion allocated to develop transportation infrastructures.
- Cable car feasibility study to be conducted to upgrade transportation services in Kathmandu.
- Government to implement Tarai-Madhes Prosperity Programme; Rs 2.6 billion allocated.
- Every Nepali citizen to have bank account within a year.
- Companies worth Rs 1 billion must be listed in stock market.
- Government to ease the process of business registration and scrapping.
- Government to monitor Non Governmental Organisations.
- Rs 40 million to be allocated to all electoral constituencies.
- 'Human Rights in every household' to be launched
- Inflation benefits to civil servants increased to Rs 2,000, insurance of Rs 200,000, government to bear 50 per cent of premium charge.
- Income tax slab increased to 10, 20 and 30 per cent.
- Tax will be collected from public for the use of roads.
- Government hikes tax on import of bikes exceeding 150 cc, and other vehicles above 1500 cc.
- Strict action would be taken against those not complying with the revenue related regulations.
Prime Minister, members of the Council of Ministers, members of both the houses of the parliament and foreign dignitaries were attending the presentation.