Honorable Speaker,

1. I feel honored to present the budget for the year 2009/10 as a Finance Minister of the coalition Government of Nepal formed under the support of the twenty-two among the twenty-four political parties of the Legislative-Parliament to build socialism oriented, just, nondiscriminatory, competent and prosperous Nepal by formulating the new Constitution as per the ideologies of the historic People’s Movement, Comprehensive Peace Accord and directive of the Constitution Assembly. On this occasion, I would like to express my deep-down tribute to the entire known and unknown Martyrs’ demised during the struggle to attain federal democratic republic in the country. Further, I would like to honor the wounded and warriors of the Peoples Movement.

2. The major priorities of the coalition government are building consensus among all the political parties; constitutional supremacy; rule of law; guaranteeing the goodgovernance; bring the peace process to a logical end by implementing all the agreements signed and consensus reached in the past to end the anarchy, lawlessness and insecurity; promulgating the new constitution with national consensus within stipulated time-frame; and accelerating economic growth by state restructuring and socio-economic transformation. The proposed budget is based on the background of these major priorities and Three-Year Interim Plan.

3. For a long time, in spite of our country's immense diversity, all the linguistic, religious, cultural and ethnic groups as well as the people of different genders and geographical areas couldn't get equal treatment from the country because of the existence of monarchial feudal system. This became the cause of various types of protests, revolts and political instability. The acute discontent against this state of affairs was voiced by the people's movement of the year 2005/06 and the Terai-Madhesh movement and similar other peaceful movements. Our present concern is to move ahead with recognition of the feelings and messages of such movements. We still face challenges. We can institutionalize those political changes only after facing those challenges successfully.

4. As we had to be engaged in the process of political changes for a long time, we haven't been able to pay much attention to economic development; many other countries of the world including our neighbors have taken a quantum leap in economic development. In the context of completion of spectacular political change, we have now to focus on moving ahead through achieving consensus among all political parties for achieving socio-economic transformation and economic development. This alone can lead to the strengthening of national unity through the creation of an economically prosperous nation.

5. The partnership of co-operative, private and public sectors is a must for the development of Nepalese economy. Over the last few years, economic crisis and credit crunch have posed a challenge to world economy. Therefore, our policy and programs should be directed to facing those challenges. At the same time, it has become indispensable for the state to incorporate all the groups, genders, races, communities and geographical areas so far ostracized by market economy and suffering from discrimination as well as non-inclusion. Political stability is its sine quo non. This will also support the strengthening and consolidation of the federal democratic republic. Review of Economic Status and Budget Implementation of the Current Fiscal year

Right Honorable Speaker,

6. According to revised estimate, GDP growth rate is likely to register 3.8 % at basic price and 4.7% at produces’ price in the current fiscal year. The GDP growth has declined owing to factors such as energy crisis, unfavorable weather, decline in capital expenditure, disturbed industrial sector, absence of elected local representatives and global economic crisis.

7. Annual average inflation is expected to surge by 13% due to the high food prices driven by world food crises, devaluation of Nepali currency, cartelling and malpractices in the domestic market, weak public delivery system, closure, strike, transport halt and obstruction created in supply system by different agitating groups.

8. The Balance of Payment situation and foreign currency reserve is in satisfactory situation because of remittances inflow and increase in the receipt of export and tourism earnings. Export and import are expected to go up by 28.6% and 12% respectively in the FY 2008/09 as compared to same period previous year. Trade deficit is expected to widen by 28.2 % and remain at Rs 208 billion 510 million. Of the total trade deficit, India alone accounts for 57.3 %. As of mid-May 2009, the gross foreign exchange reserves stood at Rs. 282 billion 330 million which is adequate to finance merchandise and service imports of 10 months. Balance of payment is expected to

register a surplus of Rs. 30 billion at the end of the current fiscal year.

9. According to the revised estimate, total government expenditure will remain at Rs. 213 billion 578.3 million in the FY 2008/09. Of this, the share of recurrent expenditure is Rs 122 billion 79.5 million (57.16% of total expenditure), capital expenditure Rs.73 billion 309.5 million (34.32% of total expenditure) and repayment of principles and interest Rs 18 billion 189.3 million (8.52% of total expenditure).

10. A special effort has been made toward minimizing future liabilities and allocating more resources for development activities in future by utilizing the probable savings in the current fiscal year. In this regard, a budget of Rs. 400 million was set aside for debt cancellation, however, total liability for this increased to Rs. 5 billion 970 million; but has been paid up all in the current fiscal year itself instead of transferring liability to future. A sum of Rs. 4 billion 550 million has been allocated as payment of 7 years lump sum pension amount to 5605 employees who retired under the Voluntary Retirement Scheme. An amount of Rs. 500 million has been released as subsidy to fertilizer, although such amount was not provisioned in the budget at the beginning.

11. According to the revised estimate, revenue collection will stand at Rs 142 billion 211.3 million - increased by 32.14% as compared to actual in the FY 2008/09. As of mid July 2009, a foreign aid commitment of Rs. 47 billion 856.4 million has been made in the current fiscal year as compared to Rs. 34 billion 60.8 million in the FY 2007/08.

12. A ceiling of Rs. 25 billion has been fixed for the domestic borrowing, and that will be honored.

13. I have presented before this august Legislative-Parliament today, a report on the annual

budget allocation and progress of each Ministry along with the annual status review of public enterprises for the current fiscal year.

Right Honorable Speaker,

14. While analyzing various structural aspects of the economy in the course of budget formulation, what I found is that we do not lack resources and institutional mechanism. Rather, I realized that willingness to work, capacity and sense of responsibility toward the nation and the people should be additionally focused on. I did observe that there is a need to develop human efficiency, responsibility and accountability for enhancing

program implementation capacity. I also found that formation of political structures at the local bodies is equally urgent for the people’s participation in the development process. Problems and Challenges of the Economy Right Honorable Speaker,

15. We cannot build prosperous, modern and just Nepal without overcoming poverty, unemployment and discrimination. We can achieve this target only through higher and inclusive economic growth and judicious distribution of income. While formulating this budget, I have identified the obstacles for higher and inclusive growth and judicious distribution of income, and concentrated the policies and programs towards minimizing them. Despite the favorable internal resources mobilization and higher foreign exchange reserves, Nepali economy now is facing various problems such as high inflation, low economic growth, declining productivity, increasing unemployment, uneasy investment climate, unequal development, climate change, high and low rainfalls. While formulating this budget, I have basically focused on the following problems:

(A) Lack of improvement in investment climate:

16. After the establishment of democratic republic, strong voices a e coming up from different classes, regions, gender and communities of the country for their own rights, welfare and benefits. Such voices have to be heartedly honored for strengthening democratic culture. In such a situation, state itself has to enhance its capacity to address those issues as well as people should also internalize the state’s limitations. Challenges have been added by impunity and deteriorating peace and security situation. Investment of the state and the private sector has been shrinking because of these reasons. Expected improvements have not been attained in economic growth rate, poverty, unemployment, etc. Now, the major challenge has been the lack of favorable investment climate in the country.

(B) High Inflation:

17. It is a serious concern that Nepal is facing a double digit inflation, although the price is declining all over the world, in the wake of global financial crisis for last few years. In addition, it has adversely affected disadvantaged communities by the sharp price increases of daily necessity items like lentils, rice, ghee, oil (edible), sugar and vegetables. Controlling inflation and bringing it to the minimum level has been another big challenge.

(C) Prioritization in resource utilization:

18. People’s expectation rose significantly after the historical political changes. Everybody wants that their issues and demands should be fulfilled immediately and at once. However, it is not possible to fulfill all demands immediately and at once due to limited resources and capacity. Hence, prioritization and everybody’s patience are necessary towards the government’s efforts to move forward the development activities. Long term benefits can be attained if resources are allocated to the bigger projects that will support speedy economic growth and can be completed on time rather than dispersing resources thinly everywhere and end up by non-completing projects. In this background, there is also a challenge to prioritize projects and allocate necessary budget to enhance effectiveness of the resources, and set criteria to initiate new projects only after completion of on-going projects.

(D) Weak budget implementation and project management:

19. While reviewing the past development efforts, I have realized that people’s credibility towards government has been declining because of the non-implementation of p ograms although policies and programs were well formulated. The cost overrun has been doubled in some big physical infrastructure projects due to time over run. In theabsence of guaranteeing multi-year budget for infrastructure project that cannot be completed within a fiscal year, one third of annual time is being spent for contracting out. Likewise, annually allocated and unspent amount are either being freezed or demanding trends to transfer such amount to other low priority projects are increasing. On the one hand quality of the completed projects are not being maintained, on the other hand, arrangement for maintenance has not been effective as well.

(E) Increasing Unemployment:

20. Investment in non-agriculture sector shrinked both from the state as well as private sector due to conflict in the past and political instability during the latter period of transitional phase. Despite agriculture sector being a source of livelihood for about twothird of the country’s population, this sector has not been able to absorb the additional manpower in this sector due to lack of modernization and commercialization. The employment opportunities available in the public sector are also passing through contraction. On the other hand, yearly about 400,000manpower has been added in the labor market of Nepal. Des ite some relief in the employment problems of the country due to an increasing access of Nepali people in the labor market abroad, the number of youths who do not have access to employment opportunities is also large. In the latter period, the number of non-skilled youths as well as educated unemployed has also been increasing fast. Hence, effectively addressing the problem of unemployment has been another challenge.

(F) Weak Performance of Public Enterprises

21. Most of the public enterprises have been miss managed and in a state of disarray for the last few years. Some enterprises which were privatized in the previous years have been withdrawn whereas the efforts to re-operate such corporations have not produced desired results. In this connection, thousands of laborers and employees that are working in such corporations and billions worth of properties invested in those enterprises have been stranded. Such enterprises are contributing no benefits to the state. In course of time, such enterprises are accumulating losses and adding liabilities to the state. Hence, settling issues related to liabilities and laborers, employees and properties of Public Enterprises for good has been another challenge.

(G) Energy Crisis

22. Electricity shortage has been a matter of another serious challenge in the context of moving the economy forward. Especially, during dry season, the whole society is disturbed due to load shedding of longer period. This has resulted in a big decline in the overall productivity of the country. This situation is an outcome of nonimplementation of new power projects in a planned way for a long time due to conflict in the past. There is no possibility of additional electricity supply immediately as the completion of such projects takes longer period. Therefore, ensuring an uninterrupted supply of electricity has been a big challenge in order to make the economy dynamic.

(H) Inadequate Physical and Financial Infrastructure:

23. Modern road network, regular supply of energy, strong communication, skilled manpower, efficient financial sector and the capital market are essential for achieving commercialization of agriculture, beneficial use of renewable natural resources, industrialization and tourism development. Such physical and financial infrastructures have not been developed so far in our country. Day-to-day closures, strikes and criminal activities have been obstructing not only the utilization of the existing infrastructures but also the expansion of infrastructure.

(I) Climatic Change and Natural Disaster

24. Nepal has been facing problems of natural disaster due to excessive carbon emission by developed countries and Nepal's inability to prevent forest encroachment and its distribution. Government budget has to increase every year for the relief and rehabilitation of the loss of lives and properties caused by natural disaster, this also has resulted in negative impact in the agricultural production as well. Creating mass public awareness, developing integrated strategy and institutional mechanism have become challenging tasks in order to minimize natural disaster.

(J) Poverty, Inequality and Discriminatory Attitude and Practice

25. Per capita income is very low despite the decline in the absolute poverty rate. The poverty and gap of inequality has been deepening. Discriminations with regard to class, ethnic, regional and gender are prevalent. Task of seeking active contribution from the private, non-government and cooperative sector has been a challenge as only the government budget is not sufficient to end all features of poverty, inequality and discrimination.

Right Honorable Speaker,

26. While mentioning economic and non-economic problems and obstacles being faced by the economy, I have also observed the opportunities and indications of economic reform within itself. All must accept the fact that the people could no achieve the outcomes as desired because of some weaknesses in the course of democratic exercises in the past. Moreover, ten year long violent conflict had pushed the speed of development back. From this situation, now we have begun a new journey of development through the struggle of hundreds of thousands of Nepali people of all classes, ethnicities and communities. This coalition government is fully committed to the campaign of building prosperous, modern and just Nepal in true sense, learning the lessons from the past that it would be difficult to maintain sustainable peace and stability if the peoples’ aspirations are not appropriately addressed. Basic Thoughts of the Budget

Right Honorable Speaker,

27. The economy will be run on socialism-oriented, people oriented and concepts of public welfare state for the sake of high economic growth and distributive justice. All the three sectors of the economy -cooperatives, private and public sectors – will have significant role to play. In particular, the government will emphasize the empowerment of cooperative sector for the sake of rural uplift and equitable and inclusive development. Appropriate and timely government intervention will be followed in order to mitigate the likely inequality and its associated malpractices caused by the uninterrupted practice of market economy. 28. The prevailing main economic problems in no way could be solved without the structural change of the economy. Structural change in the economy would be initiated with commercialization of agriculture, industrialization based on agriculture, forestry and available minerals, hydroelectric power generation and its commercial use and also focusing on the new dimensions of tourism development by relinquishing subsistence agriculture and tax-benefits processing industrial structure

29. Internal source will be increased and external dependency will by reduced for the sake of huge investment required to achieve high economic growth rate. Investment friendly environment will be created for the promotion of private sector investment by removing all kinds of policy and infrastructure oriented obstacles. Revenue mobilization will be increased significantly by increasing the tax net and administrative capacity. For the time being, emphasis will be given to mobilize foreign assistance for large physical and economic infrastructure of national priority, rural infrastructure, agriculture, social sector and inclusive development. In the long run, emphasis will be given to build a self-reliant national economy without the need of foreign assistance.

30. Emphasis will be given towards mutual economic relationship with the neighboring countries as well as rest of the world. Expansion of North-South roads will be given high priority in order to take advantage of the rapid economic development of the two big rising neighboring economies of India and China. Commodities and services of comparative advantage will be identified and promoted. Emphasis will be given for the balanced development of export oriented and import substitution industries in the changed context. 31. Macroeconomic stability is the precondition for rapid economi development. Budget deficit will be kept within a specific limit without contraction of the resources to be directed towards the private sector. Government expenditures will be mobilized towards the productive sector by curtailing the expenditures of the unproductive sector. The monetary policy will be aimed at investment promotion and price control. Deposit mobilization and micro-finance will be emphasized by expanding the banks and

financial institutions. Balance of payment situation will be strengthened by gradually reducing trade deficits. Political initiatives will be taken to minimize actions like Bandh, strike, highway obstruction, road bloc and Ghearao that obstructs the economic stability.

Objectives of the Budget

Right Honorable Speaker,

32. In order to give pace to the prosperous, modern and just Nepal mentioned by me above, the budget of this fiscal year has adopted the following objectives: o To facilitate promulgation of the new constitution as per the people’s expectations and bring the peace process to an end. o To create employment by encouraging roles and investments of the cooperative, private and public sectors pursuant to the concept of inclusive development.

To emphasize the development of large physical and economic infrastructures for rapid economic growth

To intensify the relief, reconstruction and rehabilitation for the conflict affected, and

To provide relief to the people by controlling price and facilitating supply system.

Priorities of the Budget

33. I have set the following policy-wise priorities for the next year’s budget to achieve the

proposed objectives,

a) To help draft the constitution by implementing Comprehensive Peace Accord and

bringing the peace process to an end.

b) To maintain law and order by removing impunity.

c) To increase investment for employment oriented inclusive development.

d) To implement targeted programs for the uplift and development of the

disadvantaged groups, communities and geographical areas

e) To emphasize on physical and economic infrastructure development.

f) To commercialize and modernize agriculture for the transformation

of the economy.

g) To accelerate social development by increasing investment in

education, health and

drinking water and sanitation sectors.

h) To improve the power distribution system in order to mitigate the

increasing energy

crisis by hydroelectricity production and expansion of transmission line.

i) To mobilize the international assistance for the promotion of

national interest.

j) To let the people feel the existence of a responsible government by improving

public administration and service delivery.

Right Honorable Speaker,

Now, I would like to seek permission for presenting the main sectoral policies and programs of the next year’s budget. State Restructuring and Institutional Development of Federal Democratic Republic

34. There will be no shortcomings in the financial and other resources for the Constituent

Assembly required to make the new constitution.

35. Mutual economic and social inter-relations among hills, mountains and Terai-Madhesh will be strengthened. In order to facilitate the Constituent Assembly for the institutionalization of the federalism, cooperation will be extended to the works of the State Restructuring Commission. Necessary changes, in accordance with whatever provisions are made in the federal structure of the new constitution, will be made in the fiscal and budgetary system for its implementation.

36. Necessary financial resources will be made available to implement the agreements concluded by the Government of Nepal with the Madhesi People's Right Forun in August 30, 2007 and the United Democratic Madhesi Front in February 28, 2008.

37. Likewise, no resources will be constrained for the implementation of the agreements made by the Government of Nepal with the indigenous groups, ethnic groups, Tharus, backward communities, Muslims, other parties, organizations and trade unions.

38. On the basis of national consensus, an arrangement to build a political mechanism will be made to operate the local bodies in an accountable manner and to make development programs people-friendly by bringing effectivenesses in the services to be delivered to the people. 39. A People's Movement and Martyrs Memorial Museum will be established in Gokarna, Kathmandu. Construction of the Republic Monument will be completed. A national ethnic museum will be established in Champadevi, Kathmandu. Planned development of the Narayanhiti Museum will be made. The statues of Terai-Madesh martyrs and martyr memorial parks will be established in memory of the martyrs of the Madesh

movement.

40. For the judicial sector, I have allocated Rs. 1 billion 410 million to cooperate in effective implementation of the judicial performances as per the strategic reforms plan prepared by the independent judiciary.. Sustainable Peace, Relief, Rehabilitation and Reconstruction 41. Until the completion of reconciliation and rehabilitation works, I have continued the livelihood and monthly allowances to the Combatants of the Maoist Army staying in temporary camps.

42. I have allocated necessary budget for the National Peace and Rehabilitaion Commission, the High-level Truth and Reconciliation Commission, the High-level State Restructuring Suggestions Commission, the Investigation of the Disappeared Commission and the National Inclusion Commission. 43. Implementing the programs heartfelt by the people under '' Peace Campaign Through People's Initiatives" from the Villages-Dehats, the local peace committees will be expanded to village level in the forthcoming year for the enhancement of reconciliation and good wishes.

44. While continuing with the programmes envisioned under Ganeshman Singh Peace Movement, I have allocated adequate budget to fund subsistence allowance and scholarship of the injured, family and children of the martyrs of People's Movement, Armed Conflict, Madhesh Movement and other various movements. Families of those who were killed during the armed conflict and have not received compensation during current Fiscal Year will be provided with the compensation in the coming Fiscal Year.

45. Those displaced during the past conflict will be rehabilitated. Similarly, those, whose properties have been verified as the seized or damaged during the conflict but not yet compensated, will be provided with appropriate and standardized compensation. Property seized during the conflict will be compensated with appropriate crops on the basis of certain standards and full amount of interest accrued on loan taken by these victims will be waived if they pay principal amount.

46. To provide appropriate education to the children of the pastconflict-affected families, have provisioned for scholarship through Ministry of Education.

47. The earliest possible reconstruction of the physical structures ruined during the conflict is the only way to make people feel real peace and realization of peace building. I have allocated Rs. 2 billion 350 million for completion of all reconstruction works within the period of next two years.

48. Similarly, I have allocated Rs. 2 billion 110 million for post-conflict development and construction. Under this programme, construction of 260 kilometers of road and construction of 40 bridges will be started; 96 suspension bridges and 104 small infrastructures will be constructed; and 80 drinking water projects will be completed.

49. I have allocated Rs. 1 billion 300 million for relief, land development and rehabilitation of the victims of the floods in Koshi and Far and Middle West; and for immediate relief and protection programmes to operate immediately after natural disasters. Peace and Security: Expectations of People

50. A bio metric smart card containing a picture will be distributed to all Nepali citizens as a national identity card, which can also be used for election purpose. This card will be arranged for drawingsocial security allowances, including elderly allowance, from any bank. A separate entity will be created at central level for managing implementation of such card system, registering and archiving the records of personal events, and for execution of social security programs.

51. To materialize the spirit of the theme- "Peace and Security Expectations of People", security system will be made capable, efficient and effective, and, thus, impunity will be ended. A separate Bureau will be established to carry out investigation and analysis of serious and organized crimes. People's level of confidence in the State will be increased through reducing crime rate in the society.

52. With a view to ensuring strengthened and effective peace and security in the areas of Metropolitan cities, Sub-Metropolitan cities and Municipalities, concerned Municipalities, in collaboration with Nepal Police, shall be required to prescribe certain areas, where new banks and financial institutions, hotels, lodges, and restaurants can be established. Banks, hotels, lodges, and restaurants so established shall be allowed to operate their businesses only within the prescribed areas. Entities established prior to this, will require shifting their businesses to the prescribed areas within a period of one year. The prescribed areas will be made intensively secured throughelectronic tools. Similarly, necessary arrangement will be made for industrial security.

53. I have arranged for additional budget with a view to transforming prisons into reform homes and improving physical infrastructure. Social Security and Inclusive Development

54. I have given continuity to the social security allowances currently being provided to the elderly citizens, single women, endangered ethnic group, and, partially and fully handicapped individuals. I have scaled up the allowance of Rs. 500being given to the Raute ethnic group to Rs. 1000. Ra ute ethnic group, if they wish, wil be permanently settled in appropriate places. I have allocated Rs. 7 billion 780 billion for social security

55. I have allocated needful budget for establishing one " Health Shelter for Elderly Citizen "in each of the five development regions with the objective to provid appropriate care, medicaltreatment and attentions to the conflict affected elderly citizens. With a view to ensuring due respect to and security of the elderly national talents, I have allocated needful budget to establish "Pushpalal Sarjak Home" in Kathmandu. Poverty Alleviation and Inclusive Programme

56. Scaled-up investment in local level programmes is essential for poverty alleviation and inclusive development. For this, nine programmes consisting of balanced education for all and literacy, health, safe drinking water, small irrigation, small and cottage industries, skill-oriented trainings and employment, intensive plantation afforestation, small hydroelectricity and local roads will be effectively implemented through community.

57. Special programmes will be executed with high priority fo education, health, employment and empowerment of the indigenous people, ethnic group, Tharus,Madhesis, Dalits, Muslim, Madhesi-backward group, endangered ethnic group oppressed, poor, disabled and people living in backward regions, wh are left behind in economic and social development.

58. Poverty alleviation programme currently operational targeting at the socially and economically backward community and households below poverty line will be expanded to all the districts. I have allocated Rs. 2 billion 720 million for this programme.

59. Distribution of "State Privileged Identity Card" to the families living below poverty line will be initiated. The cardholders will be given privileged access to the health service, education and public supply system. The cardholders will have the first right to purchase subsidized goods to be sold by the agencies of the Nepal Government.

60. To bring about improvement in the condition of child-care in poor and highly backward families, "Child Protection Grant" of Rs. 200 per month per child under the age of 5 for up to 2 children of the each poor Dalit family and all families in Karnali Zone will be provided from mid-October 2009. Such grant can be used only for the nutrition of the children and will be provided either to mother or to guardian in absence of the mother. Ministry of Local Development will prepare a directive to this effect by the mid- October 2009. I believe that this programme will bring about improvement in the nutrition level of about 4 hundred thousand children. I have allocated Rs. 720 million for this programme.

61. I have made arrangement to continue the activities under the programmes, such as "Bisheshwor with Poor" and "Women Awareness Programme" through DistrictDevelopment Committee

62. With the objectives to make the girl child of the poor families Terai/Madhes selfreliant through enhancement of skill and capacity, I have made necessary arrangement to award scholarship to the A.N.M. or equivalent technical education to those girl children, who are willing and have already completed Grade- 8 education, and belonging to Dalits, and poor Muslim families residing in Parsa, Bara, Rautahat, Sarlahi, Mahottari, Dhanush, Siraha and Saptari districts. The institutes, in which such girl-child wish to enroll, shall require to enroll them compulsorily. Directives for this will be prepeared by the mid-November 2009. I have allocated a budget of Rs. 60 million for this programme.

63. Society still rejects inter-cast marriage between dalit and non-dalit and the initial days of the couples thus married are normally tough. To encourage such inter-cast marriage, the government will provide a grant of Rs. 100,000 to the newly married couple within 30 days of marriage registration with the District Administration Office. Similarly, to encourage widow-marriage, the government will provide a grant of Rs. 50,000 to the couple within 30 days of marriage registration with the District Administration Office. To increase the access of the widows to employment and other opportunities and to review the future structure of allowance, data of the widows will be collected. Social and Cultural Preservation

64. Language, literature, art, music and culture of all ethnicities and janajatis will be preserved, maintained and promoted. Preservation of traditional monasteries, temples, mosques and ritual places will be continued with reaffirmed additional priority.

65. I have allocated necessary budget to help establish ethnic museums inclusive of all ethnicities from Terai-Madhesh, hill and mountain in various districts

ensuring local level participation and leadership.

66 Tradition of rewarding and respecting the Nepali talents who receive international and regional award in the areas of literature, music, arts and any otherfield will be initiated. Special attention will be given to honour and preserve the distinguished talents devoting their life to this arena

67 In the process of awarding the person who significantly contributed in the development of Maithali language, literature and culture, I have allocated Rs. 10 million as a revolving fund for "Mahakabi Vidhyapati Puraskar Guthi". Women Development and Social Empowerment

68. I have continued the concept of gender responsive budget to enhance gender equality. I have proposed Rs. 49 billion 450 million; which is 17.3 percent o total budget for the program which will directly benefit the women in the next year.

69 I have allocated Rs. 493 million to continue women development program carried out in all the districts. I have allocated Rs. 221.2 million for social, economic and legal empowerment program conducted in 15 districts which are backward in human development and gender development index.

70 I have allocated Rs.30 million budget to conduct home development program in Dang, Salyan, Banke, Bardiya, Surkhet, Jajarkot, Dailekh, Kailali, Darchula and Kanchanpur districts for economic and social empowerment of women from the Badi community.

71 Women, who are victimized from domestic violence and sexual harassment due to not getting secured shelter, are compelled to befurther victimized. Viewing this, I have allocated Rs. 20 million budget to establish short term shelter, and women sheltering house with food in selected 15 district headquarters after mid- October 2009. Women who come to take shelter will be rehabilitated within 30 days. Youth Mobilization for Nation Building

72 As the role and contribution of youth is very crucial in economic, social and cultural development, and in the establishment of sustainable peace, a youth policy will be formulated for capacity development and mobilization. Under National Youth Mobilization Program, youth partnership, youth experience exchange and awareness campaigning program against addictions will be carried out. National Youth Council will be formed. For this, I have allocated Rs. 63.6 million.

73 Youth volunteers will be widely mobilized in every village under the policy of mobilizing them in sustainable peace and development by awakening the spirit of volunteer service in youth. Volunteers deputed in villages will assist the local people in the field of technical assistance in small infrastructure development, monitoring, health service, literacy, establishment of peace, enhancement of social harmony and awareness programs. For this, I have allocated Rs. 100 million

74 By developing the sports on the basis of the theme "Sports for Healthy Life andNational Pride", due emphasis will be given in preparing healthy, capable and disciplined citizen, and maintaining national identity at the international level. In the forthcoming year, the construction of a regional level stadium will be initiated each in Sunasari, Chitwan and Kailali. National Sports Academy will be built in Hetauda. Necessary preparation will be made for the participation of Nepali athlets in 11th South Asian Game being held in Bangaladesh in December/January, 2009/10. Likewise, emphasis will be laid on the infrastructure development for the planning of international and regional level sports competition in Nepal in each year. According to the policy to encourage sports talent, the provision of life-long subsistence allowance will be made to gold medalist in Asian and Olympic games. I have allocated Rs. 273.2 million budgets for National Sports Council to carry out the activities related to sports development. Right Honorable Speaker, Transformation in Agriculture for Economic Prosperity

75 Since agriculture sector is the main pillar of income and employment of majority of Nepalese people, program with the campaign "Agriculture for subsistence to Agriculture for sustainable development" will be carried out. Priority will be given to the implementation of long-term agriculture plan. I have allocated Rs. 8 billion 60 million in the agriculture sector.

76 I have allocated Rs. 1 billion 500 million to provide subsidy to chemical fertilizer.

77 Necessary policy and infrastructure will be arranged to encourage the production of organic fertilizer in local level. Similarly, arrangement for making available internationally recognized certificate will be made free of cost for the export of organic agricultural produces. I have allocated Rs. 50 million to provide 50 percent capital subsidy on the cost of machinery equipment to the organic fertilizer factory to be established by cooperatives.

78 In order to encourage good debtors, a fifty percent rebate on interest payable will be given to those small farmers and entrepreneurs who have borrowed upto Rs. 50 thousand from the Agricultural Development Bank, Nepal Bank, Rastriya Banijya Bank and Small Farmers Cooperative Bank and pay installment in FY 2009/10. I have continued interest subsidy provided through Agricultural Development Bank to tea, cardamom, coffee farming, cold storage and floriculture. If the principal is paid by the tea producing small farmers who are in crisis, all interest will be waived. I have continued rebate facility given to the demand charge of electricity to be used in shallow tubewells and milk chilling cooperative centers.

79 A twenty five percent subsidy on the cost of machinery equipments will be provided to processing industries to be established by tea, coffee, herbs, honey, Junar (orange), ginger and milk producing cooperatives having high price and comparative benefit in international market. For this program, I have allocated Rs. 100 million.

80 The Government of Nepal will bear necessary expenses for commercial identification of Nepalese tea and coffee, which have distinct identification in international market, inthe name of "N pal Tea" and "Nepal Coffee" in international market.

81 "Sugarcane Board" with the participation of farmer themselves will be constituted to encourage sugarcane production, to increase productivity and to empower farmers.

82 In order to provide immediate relief to the people who are in food crisis and to assist the farmers for food production increment, continuity in the activities of small irrigation, fertilizer and seed transportation, seed production and storage under food crisis addressing program in 23 districts of high and mid mountain areas, will be given. For this, I have allocated Rs. 239.7 million.

83 Cooperatives farming will be encouraged to increase agricultura productivity under the program "Cooperatives in Villages and Cities, Employment at Every Household". Facilities including infrastructure building, technical service, fertilizer, seed subsidy and agro-machinery will be made available to the institutions affiliated to cooperatives farming. To enhance the capacity of cooperatives and to operate cooperatives as a campaign, I have arranged to provide subsidy to National Cooperatives Federation through Cooperatives Board. In order to increase the capital fund of National Cooperatives Bank, I have proposed Rs. 10 million for loan investment.

84 Under Cooperatives-Private Partnership, food, fruits and vegetable collection centers and wholesale market will be constructed in Jumla, Kathmandu, Bharatpur, Dhalkebar, Hariown and Butwal. Well managed vegetable market will be developed and maintained in Kathmandu Metropolis and other municipalities. Capital subsidy will be provided to meat trader's cooperatives to manage animal slaughter house in Kathmandu.

85 Nepal Agriculture Research Council will be strengthened to conduct an imitable and advanced research as per the demand of the farmers. In order to minimise the negative impact on the agricultural production due to change in climate, emphasis will be given to the research of the eco-friendly agricultural system.

86 The farmers will be encouraged in fish production as a campaign in the Terai. The fish farms under the government ownership will be gradually transferred to the farmer groups. About 120 million fishlings will be reproduced and distributed to facilitate fish production. In Kathnamdu Valley, capital subsidy will be provided for the infrastructure development of modern fish market with cold storage facility to be established by cooperatives societies.

87 I have allocated Rs. 445.8 million for the continuation of the special livestock program which has been currently in operation in the 27 districts of the Terai-Madesh, mid hill and high hill regions.

88 Special program will be carried out to prevent/control bird flu, swine flu, and other (trans boundary) livestock related diseases.

89 I have earmarked budget for the micro insurance of livestock and crop in order to provide safety to the farmer's production and livestock farming. Irrigation for increased agricultural production

90 A sum of Rs. 7 billion 950 million has been allocated for the entire irrigation sector which is an increase of 35.76 percent as compared to the revised estimate of current Fiscal Year.

91 High priority will be given to the Sikta Irrigation Project. I have allocated Rs. 603.3 million for the 15 km construction of the first phase of the main canal and designing up to additional 35 km and completing the cost estimate.

92 I have allocated Rs. 55 million for the commencement of th "Ranijamara Kulariya Irrigation Project" in Kailali district which can provide irrigation facilities to the 20,000 hectares arable land of that district. Construction work of the "Jamuni Irrigation Project" in Rauthat district will be initiated. Badkapath Irrigation Project of the Dang district will be carried out rapidly.

93 Additional 36 thousand hectares land will be irrigated under the third phase of the Mahakali Irrigation Project through the water received from the Tanakpur Barrage of India. I have allocated necessary budget for carrying out of this project with priority.

94 16 thousand 6 hundred hectares land will be irrigated throughout the year in the 20 districts of the Terai Madesh by the installation of 12 new deep tube-wells, 25 ongoing deep tube-wells and 7 thousand shallow tube-wells.

95 I have given high priority to the construction of small and medium sized irrigation projects. For this purpose, I have earmarked Rs. 1 billion 160 million. Hence, these projects which will be implemented in a massive scale will also create employment opportunities. Improvement in Land Management

96 A High Level Scientific Land Reform Commission will be given complete shape on the basis of political consensus. Land management, distribution and productivity enhancement program will be carried out on the basis of recommendations given by the past and current commissions for productivity enhancement and professionalization. I have allocated Rs. 1 billion 490 million for the implementation of land improvement and management related programs.

97 As the record of the public and government land has been prepared, an action plan for protection and utilization of such land will be made and implemented strictly.

98 Current land registration system will be changed will be registered under residential, agricultural, industrial, forestry and public lands categories. A ban on agriculture land will be imposed for using in other purposes keeping in view of the long-term food security. A law related to confiscation of land by the government will be promulgated if the registered agriculture land remains uncultivated regularly for two consecutive years. Preparation of map on land utilization by District and Village Development Committees will be continued. Land utilization program will be implemented as a pilot project in certain selected areas.

99 All land records will be maintained in computer at 68 Land Revenue Offices including 30 additional Offices in next year, and land ownership certificate will be provided through computer system. 18 Rehabilitation of Kamlari, Haliya and Rehabilitation of Bonded Labor (Mukta Kamaiya)

100 Rehabilitation of all registered family of bonded labor will be accomplished within the next fiscal year. I have allocated necessary budget to give continuity to programs such as bonded labour entrepreneurship development, skill development, model vegetable farming and land exchange and adjustment program that directly benefits such groups.

101 Freed Haliya will get land equivalent to that of the tenant farmers from the landlord; law in this regard will be formulated. Free residential school education or technical training will be provided to the freed Kamlaris as per their ages and interests. Likewise, necessary steps will be taken to end the exploitation prevailing among Haruwa and Charuwa. Uplift of the Landless Squatters

102 High priority will be given to mainstream the landless squatters towards the economic development schemes. Income generation and shelter programs will be launched for the

landless and squatters who are residing in different area on the recommendation of the high level commission formed to settle problems related to squatters. Forest conservation and development

103 I have proposed a sum of Rs. 3 billion 440 million for the forest conservation and development sector which is an increase of 37 percent as compared to the revised estimate of the current Fiscal Year.

104 I would like to call every Nepali citizen to participate in a afforestration program with a slogan "One man, One Plant" to attain a national goal of maintaining at least 40 percent forest coverage area out of the total land of Nepal. A massive public awareness campaign will be launched for the conservation and preservation of forest and to protect it from wild fire. An afforestation campaign of Devdar, Okhar, Loathsalla, and Gurans species will be launched in high hill area.

105 22.3 million plants of multi- purpose species, herbal plants, cane, bamboo and Sajiwan will be planted to conduct the afforestation program as a campaign,. The partnership of public, private and community sector will be arranged for the protection of forest and plantation.

106 The opportunity of "Green Employment" will be created in rural area through implementing forest entrepreneurship program based on community owned forest resources with special priority. The area of community forest and leasehold forest will be expanded. Forests will be commercialized by imparting technology to prepare Briquette and timber through branches and forest wastage to community forest user groups. For this propose, revolving fund up to Rs. 100 million will be created by the Government. Under this program, communities will establish industries based on forest raw materials, i e. herb, Chiuri Ghee, Lokta, Cane Bamboo, Bee farming, Field broom, Membin etc.

107 Emphasis will be given to establish market infrastructure of herbs. I have allocated necessary budget for establishing an international standard laboratory to help commercial processing of herbs.

108 Extensive dissemination as well as publicity will be made after formulating the law related to Biological Security and Genetic resources and protection through area expansion and effective management of biological diversity. Soil Conservation and River Training

109 Emphasis will be given to the construction of rain water collecting pond and water-shed management in alpine and mountainous districts to increase local employment and to control land erosion and to minimize loss of economic and human lives. Likewise, special program will be operated to control water current and water-shed conservation of Karnali, Gandaki and Koshi. I have allocated Rs. 200 million to carry out this program as a campaign.

110 To construct embankment in massive manner as per master plan in coming fiscal year on 10 cankerous river and temporary water streams of Terai-Madhes, including Kankai, Ratu, Narayani, Dodha, Jhhim, Lakhandhehi, Rs. 1 billion is allocated and river training work will be completed gradually. I have allocated Rs. 1 billion 400 million toconstruct embankment in other rivers and small rivers. Large number of employment opportunities will be generated by this money allocated for river embankment.

111 Special program will be carried out in Terai to maintain growth of agricultural productivity and to protect Chure and Shiwalik mountain range. Mechi Mahakali Integrated Chure Protection Action Plan will be formulated and Chure Conservation Program will be operated in four districts including Siraha, Saptari, Udayapur and Sunsari district in the coming fiscal year. "Tourism Development for Wider Economic Growth"

112 Preparation will be made to observe Nepal Tourism Year 2011 with the aim of bringing 10,00,000 tourists into Nepal through the campaign of "Nepali Temperament, Welcome and Hospitality of Guest" slogan. Under this program, package will be developed to attract tourists with the partnership of successful organization and institution of tourism sector and dissemination as well as publicity task will be carried out. An interaction with all climbers of Mt. Everest will be conducted in coming fiscal year. Nepal will be developed as an attractive venue of international as well as regional convention center. 20

113 I have removed the provision of Tourism Service Fee from July 16, 2009 which wa collected as income source of Nepal Tourism Board to implement its programs. I have made an arrangement in such a way that Nepal Tourism Board could reach an agreement with airline companies to collect Rs. 1000 per passenger at air ticket itself effective from that date.

114 Additional places for Paragliding and Rafting, which are attractive for extending the stay of foreign tourists coming to Nepal and also for interna tourists, will be expanded. Paragliding at Gheralik of Arghakhanchi and feasibility study of Rafting operation will be carried out at Balefi to Chatara and Ramdighat to Narayanghat.

115 Birat area, Bideha area, Sahales area, Simroun area and Lumbini area in Terai Madhes and Karnali Chisapani area will be developed as tourism spots. Pathivara, Barah area, Pasupatinath, Manakamana, Muktinath, Sorgadwari and Mallikarjun will be promoted as seven Spiritual Destinations. Private sector will be promoted to construct traveler guest house to facilitate spiritual tourists in Barah area, Gosaikunda, Khaptad Lake, Tribeni, Chhanna Marga and Resunga Pokhari area. Special attention will be given for tourism development of Muktinath area to Damodar lake. A feasibility study will be carried out to operate Cable Car in Muktinath area. Emphasis will be given to complete the construction of physical infrastructure at Lumbini.

116 Special programs will be carried out for the promotion and conservation of lakes and ponds which are the ancient assets of touristic resource. Tourism development works like, database preparation of the lakes of Nepal and conservation o lakes, will be completed.

117 Ring road construction work at Doti- Achham portion and Bajura-Bajhang portion of Khaptad area will be initiated. Route to touch the Khaptad area of Bajhang, Doti, Achham and tourism trekking route of Bajura and Khaptad Surma, Khaptad Ure glen, Khaptad Ramarosan trekking route will be improved.

118 "Art Village" will be developed in the area of Maithili, Bhojpuri, Tharu, Lapcha, Limbu and Dhimal inhabitants. I have allocated necessary amount to construct and develop the Sukhani area as infrastructure for tourism area development where freedom fighters had attained martyrdom at the time of historic Jhapa revolt.

119 Installation work of new radar in Tribhuvan International Airport will be initiated to make the flights reliable and systematic. Runway will be expanded to minimize the air traffic problems in Tribhuvan International Airport.

120 Construction of International Airport in Nijgadh of Bara will be started with high priority. Construction work of regional airport at Pokhara and Lumbini will be initiated. Regional and other important airports in view of touristic perspective located in hill and himali area, will be continued. will continue.

121 I have allocated Rs. 250 million for up grading all airports of Rajbiraj, Janakpur and Humla, Mugu, Kalikot and Dolpa of Karnali zone and Rs. 100 million for extension of Dhangadi airport. Airport of Simara and Dhangadi will be developed and equipped for landing and take off during night time. Private Sector Development and Investment Friendly Environment

122. Development strategy of Nepal should address the problems of both parts of Nepalese economy comprising some parts as modern and the rest as traditional. Market oriented economy will be helpful to develop modern sector so as the Government will be committed to create environment for its expansion as regulator, facilitator and to develop leadership and help private sector as the pioneer. The role of Government will be increased in the sector where public liability has to be borne and the private sector has not yet entered. We can move toward sustainable development through the development of competitive capability. For this purpose, in the initial stage, the Government will adopt appropriate measures to support them.

123. Policy stability being one of the main foundations of investment environment, the Government will give continuity to good policies being adopted by the previous government.

124. A High Level Investment Board will be formed under the chairmanship of Rt. Hon. Prime Minister, with the objective of attracting national and foreign investment in large industry and infrastructure and create conducive environment to them. Cottage Village will be established to encourage the small and cottage industries.

125. For the development of private sector, following are the indicators related to reducing the cost of business: simplicity in starting and closing a business, licensing, availability of flexible and productive labors, simplicity in listing and ownership transferring of properties, guarantee of the rights to property, simple and facilitated credit system, protection of investment, business friendly tax system, control of smuggling at borders and guarantee of contract enforcement. Reforms will be initiated in order to encourage investment interlinking the above mentioned issues.

126. Motivation will be made to fix two types of wage rates depending on the minimum work performance