Print Edition - 2015-06-10 | MONEY
NPC sets budget ceiling at Rs880b
Jun 9, 2015-
The budget for the next fiscal year will increase by at least 42 percent to Rs880 billion compared to the budget for this fiscal year as the government is required to allocate huge resources for reconstruction in the aftermath of the deadly earthquake. The size of the budget for the current fiscal year is Rs618.1 billion.
A meeting of the Resource Committee headed by National Planning Commission (NPC) Vice-chairman Govinda Raj Pokharel on Tuesday fixed the ceiling for the budget for the next fiscal year.
Although the government had been making budget preparations based on the ceiling of Rs735 billion fixed earlier, the committee made an upward revision keeping in mind the changed context following the quake. Pokharel said at a Parliamentary committee on Tuesday the budget size was massively hiked to arrange funds for reconstruction of damaged infrastructure and rehabilitation as well as to give continuity to work on national pride projects and help develop backward regions in terms of human development.
With the Finance Ministry expecting a downturn in revenue collection next year due to the quakes’ impact on the economy, the resource committee downsised the resources to be generated from taxes. The committee expects to generate Rs501 billion from taxes against Rs512 estimated while setting the budget ceiling before the earthquake.
As the services sector—especially tourism, insurance and banking—has been hit hard by the quake, revenue collection is expected to remain low next fiscal year.
However, reconstruction activities are expected to generate some revenue for the government.
Around Rs250 billion is expected to be generated from foreign grants and loans and Rs100 billion from internal loans. Rest of the resources (Rs29 billion) will be generated from the savings to be made this fiscal year.
While setting the budget ceiling earlier, the government had aimed at receiving Rs148 billion in foreign aid and raising Rs74 billion in internal debt.
NPC member Chandramani Adhikari said the resources under the foreign aid heading was hiked substantially as the government expects more aid commitment from donors.
Published: 10-06-2015 09:09