The Rising Nepal
Kathmandu, May 28: Finance Minister Dr Yuba Raj Khatiwada is presenting the budget for the Fiscal Year 2020/21 on Thursday at the Federal Parliament. The budget is expected to address the challenges created by the COVID-19 pandemic and put the economy battered by the crisis back on track with the announcement of economic stimulus for the business, job creation for the youth and relief for the needy people.
Since the pandemic hit the country at the period when development activities and revenue collection would increase, the government is likely to face resource crunch to fund next year’s programmes. Due to the uncertainty of closure and restrictions on movement, it would be difficult to predict next year’s economic situation.
Dr Khatiwada faces the challenge to strike a balance between the capital formation projects and funding for the coronavirus affected sectors with the scanty available resources. However, he is confident of the management of resources and said that about Rs 150 billion foreign support had already been secured for the next year’s programmes and projects.
While industries and entrepreneurs are expecting economic stimulus as large as 5 per cent of the Gross Domestic Product (GDP), local governments are looking up to the federal government for funds to mobilise in the coronavirus affected sectors, relief works and development projects.
The Finance Minister has hinted that he would give priority to the creation of disaster prepared mechanism across the country, create sound health infrastructure to fight the crisis like coronavirus pandemic, rehabilitate the business and industry and alleviate poverty.
In his principles and priorities of the budget presented in the Federal Parliament earlier, he also said that sufficient resources would be mobilised in the infrastructure projects.
Although, the actual size of the upcoming budget is not made public, the Finance Committee of the parliament, before the advent of the pandemic, had fixed the ceiling at Rs 1.7 trillion. It also recommended revenue target of Rs 1 trillion without increasing the tax rate, however.
Meanwhile, the business sector has asked the government to subsidise the salary to the workers with 25-50 per cent monetary support. This is Dr Khatiwada’s third budget. He had announced Rs 1.53 trillion budget for the current fiscal year 2019/20 with priority to poverty alleviation, infrastructure development and good governance.
He had allocated Rs. 957.10 billion, for recurrent expenditure, Rs. 408.05 billion for development expenditure and Rs. 167.86 billion for financial management. Rs. 464.56 billion was allocated for the subnational governments.
Sources of the current FY’s budget were revenue Rs 981.13 billion, foreign grant Rs. 58 billion, foreign loan Rs 298.83 billion and domestic loan Rs 195 billion.
States and local bodies will announce their budget later – states on the first day of the next fiscal year and local governments 10 days thereafter.