Print Edition - 2012-11-03 | MONEY
NPC raises ceiling to around Rs 450 billion
- Cites inflation, addition of new programmes for the upward revision
Nov 2, 2012-
The government plans to go ahead with issuing a full budget amounting to Rs 450 billion even as the political parties continue to bicker over the national financial plan that has pushed it behind schedule.
The National Planning Commission (NPC) had originally fixed the budget ceiling for the current fiscal year at Rs 429 billion last July, but it is now making an upward revision to include new programmes.
NPC vice-chairman Dipendra Bahadur Kshetry said the ceiling would increase due to inflation over the last three years and new progarmmes to be included in the budget.
NPC member Janak Shah also said the ceiling would reach approximately Rs 450 billion. “We are recommending the ceiling to the Finance Ministry for the preparation of the budget within two-three days,” said Shah.
The NPC moved to fix a new budget ceiling after the ruling parties vowed to introduce a full-fledged budget at any cost despite strong protest from the opposition parties.
The budget ceiling had to be raised as the government needs to make additional spending to hold elections to the Constituent Assembly, implement the Load Shedding Reduction Action Plan endorsed by the Cabinet recently, maintain a smooth supply of chemical fertilizers for farmers and conduct action plans on good governance and economic development introduced by the government.
The budget, according to Shah, will basically focus on four areas—infrastructure, agriculture, energy and tourism—which are also the priority areas set by the current interim plan. “Agriculture, in particular, will get a higher budget allocation; and it will be ensured that farmers get adequate chemical fertilizers this year,” said Shah.
“We have concluded that farm resources have been limited despite being accorded priority.”
The higher farm budget is in line with Prime Minister Baburam Bhattarai’s vision who has repeatedly said that the government would allocate more resources to the agricultural sector in the new budget.
The new budget will ensure increased investment in research and development in the farm sector. “It will introduce programmes to improve technical services to farmers,” added Shah.
The government will earmark around Rs 8-10 billion for the planned CA elections while about Rs 6 billion will be set aside to reduce load-shedding. The plan seeks to cut blackout hours to 10 hours daily from the projected 21 hours.
The major components of this plan are early construction of the Dhalkebar-Muzaffarpur cross-border transmission line, generating 40 MW from diesel plants, importing another 200 MW from India and purchasing energy from plants of local industrial units, among others.
Likewise, at least Rs 5 billion is estimated to be required to import a sufficient quantity of chemical fertilizers to maintain a regular supply. Farmers suffered greatly during the last rainy season as the government could not supply adequate chemical fertilizers and farm output is expected to fall this year.
According to Shah, resources will be allocated to implement good governance and economic development action plans. The plans have been hardly put into practice so far.
The government has been pressing for a full-fledged budget as it will be scrambling to manage funds for administrative expenses such as salaries, allowances, pensions, medical benefits and fuel and office operation from mid-November without it. The one-third budget of Rs 161.02 billion issued in July was meant for the first four-month period.
Though the government has a treasury surplus of over Rs 30 billion, it cannot use the money due to legal provisions associated with the one-third budget. The Finance Ministry revealed on Thursday that the government would face a cash shortfall of Rs 7.42 billion for administrative expenditure including salaries and allowances till mid-November. For this reason, the government is preparing to send an ordinance on the budget to the president even if a consensus cannot be reached.
Published: 03-11-2012 09:40