Print Edition - 2014-07-10 | MONEY
Budget size within NPC ceiling difficult: Mahat
Jul 9, 2014-
Finance Minister Ram Sharan Mahat has admitted it will be difficult to keep the budget size within the ceiling fixed by National Planning Commission (NPC) amid huge demand for resources from various sectors.
NPC has fixed the budget ceiling at Rs 596 billion for the next fiscal year. With lawmakers demanding Rs 50 million for each electoral constituency and employee unions lobbying for a salary hike, the budget size is expected to increase. Mahat said the actual budget size will be decided “at the last hour calculation”, but added the government has seriously taken the employee unions’ demand for a pay hike.
The government is scheduled to present the budget for the next fiscal year on Sunday. Talking about the policy direction of the new budget, Mahat said it would be reform-oriented. The finance minister, who has been consistently talking about the need for starting second generation economic reforms, said reforms measures would be initiated in industrial and financial sectors.
The government has identified around two dozen Acts and policies to be amended or introduced for second generation reforms. The government is working to introduce some new Acts and amend the existing ones, including Industrial Enterprise Act, Foreign Investment Policy and Act, Special Economic Zone Act, Bank and Financial Institution Act, Cooperative Act, Nepal Rastra Bank Act, Electricity Act, among others.
Another focus of the new budget, according to Mahat, will be on enhancing capacity of government agencies to administer development projects. As the current Public Procurement Act has been identified as one of factors delaying implementation of development projects, the government has initiated the process to introduce a new Act. “We are giving serious thought to introduce policy measures for faster implementation of development projects,” he said.
According to the minister, privatisation of state-owned enterprises and re-opening of closed industries with the involvement of the private sector will also be in the government’s priority.
Almost half of the public enterprises (PEs) that are currently in operation are facing losses. “There can be many forms of privatisation, including lease out and outright privatisation. How the PEs will be privatised will be decided based on specific requirement,” the finance minister told the Post. “There are also several models to revive the closed industries and we are exploring all possible options.”
The government wants to re-open state-owned enterprises such as Nepal Drugs Limited and Janakpur Cigarette Factory with the private sector’s participation.
The government will continue allocating budget for the Kathmandu-Tarai Fast Track Project, which future has remained uncertain after three shortlisted Indian companies withdraw from the bidding process.
“The government is still willing to give another chance to the private sector to invest in the Fast Track project,” said Mahat, referring to interests shown by various foreign companies.
“However, the government is also determined to build the project itself if efforts to attract foreign investment fail.”
Mahat also said the new budget would give high priority to export promotion and import substitution to reduce ballooning trade deficit.
- Focus on economic reforms
- Policy and administrative reforms for budget implementation
- Private sector participation in public enterprises
- Private sector to be given chance to build Fast Track
Published: 10-07-2014 09:14