Budget today: Infra, reforms to get push

- PRITHVI MAN SHRESTHA, Kathmandu
Budget today: Infra, reforms to get push

Jul 12, 2014-

Ram Sharan Mahat will present his seventh budget as finance minister in Parliament on Sunday, focusing on policy reforms, infrastructure and agriculture. The budget that Mahat terms as "reform- and investment-oriented" will outlay significant investments in energy, infrastructure, agriculture and irrigation sectors.

However, for Mahat and his team, addressing lawmakers' demand for Rs 50 million for each electoral constituency remained the biggest challenge as of Saturday night when they put finishing touches to the budget. Sources said the budget will somehow address the MPs' demand.

The finance minister is learned to have told President Ram Baran Yadav and Acting Prime Minister Bam Dev Gautam during his briefings that the budget would be as big as Rs 618 billion.

Sources say education sector will get the largest chunk of budget, followed by local development, energy and health sectors. The government has earmarked Rs 86 billion to the education sector, up around Rs 6 billion year-on-year.

Compared to earlier budget, the government has increased funding for local development by almost Rs 4 billion. The Ministry of Federal Affairs and Local Development with get Rs 50 billion, in line with the ceiling fixed by the NPC.

The energy sector that received Rs 30 billion in the current fiscal year will get around Rs 28 billion while the Agriculture Ministry will get around Rs 22 billion.

The budget, according to sources, will announce significant measures for “second-generation reforms” that will be centred on strengthening the regulatory framework. It will push for new Acts and policies in the areas of industry, hydropower, financial sector, foreign exchange, investment promotion.

Source say there will be no new big projects in the budget. But it will allocate significant resources for ongoing infrastructure projects including Kathmandu-Tarai Fast Track and Upper Tamakoshi Hydropower Project.

After failing to attract foreign investors under the build-own-operate-transfer (BOOT) model, the government is taking own initiatives to construct the Fast Track.

In the energy sector, two new transmission lines between Nepal and India will be included to facilitate cross-border power trade. The government will announce 50 new municipalities, following on its recent announcement of 72 towns as municipal areas. People's Embankment Programme (Janata ko Tatbandha Karyakram) is set to be implemented in two more rivers from the existing 14.

With the announcement of the upcoming Decade of Agriculture Revolution in the offing, irrigation will get major push in the budget. In its 20-year vision for the farm sector, the government will prepare mechanisms for implementing the agriculture development strategy.

Expansion of the “one village one product” programme, exemption of interest on loans for entrepreneurs who pool land for farming and Ring Road expansion in Kathmandu with Chinese assistance are other schemes to be announced.

Despite reservations from top Finance Ministry officials, there is a possibility of the budget announcing a Tax Clearance Commission.

MAJOR HIGHLIGHTS

- Peoples’ Embankment Programme for two more rivers

- Agriculture Development Strategy to be introduced

- Expansion of One Village One Product programme

- Govt to invest in Kathmandu Tarai Fast Track

- Education sector gets biggest resource, followed by local development

- Two more transmission lines between Nepal and India

Published: 13-07-2014 09:14

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