Next budget to focus on rebuilding: FinMin

Next budget to focus on rebuilding: FinMin

Jul 1, 2015-

The government on Wednesday informed that budget for the next fiscal year will focus on reconstruction and rehabilitation after the recent earthquakes to achieve a higher economic growth.

Presenting the ‘Principle and Priorities’ of the Appropriation Bill 2015 at Parliament, Finance Minister Ram Sharan Mahat said the government would allocate adequate resources for the reconstruction and rehabilitation of damaged infrastructure and people affected by the devastating earthquakes of April 25 and May 25.

“Damaged personal houses, government buildings, infrastructure related to public service delivery, and cultural and archaeological heritage will be reconstructed by using earthquake-resistant technologies,” he said.

The devastating quake and aftershocks damaged assets and properties valued at $5.13 billion (Rs513 billion), and the loss in terms of foreign earnings in different sectors is to the tune of $1.88 billion, the Post-Disaster Needs Assessment (PDNA) report says. The government has established the prime minister-led National Reconstruction Authority for the reconstruction and rehabilitation projects, and set up the National  Reconstruction Fund to finance them.

Having received aid commitments totalling $4.4 billion from donors at last week’s international conference, the government aims to raise the rest of the funds through internal loans to meet an estimated $6.7 billion it would required for the reconstruction and rehabilitation efforts. “The government will issue ‘Reconstruction Bond’ to raise money to meet any funding gap,” he said.

The budget will also focus on capacity building of the concerned agencies related to disaster management and allocate resources for machinery needed for disaster preparedness, according to Mahat. The government will introduce programmes to increase production and productivity of agriculture, industry and service sectors aimed at boosting economic growth. Due to the damages caused by the quake in all three sectors of the economy, economic growth this year is expected to remain an eight-year low of 3.04 percent.

As the service sector has been hit the hardest by the disaster, the government said efforts would be made to revive construction, financial and tourism sectors. Measures such as safety audit of tourism destinations, conveying positive message about Nepal’s safety and publicity campaign through country’s diplomatic missions abroad will be carried out to revive tourism.

In a bid to bolster the industrial sector the government will allow openings of new industries at land owned by the state enterprises which have been shut down, the finance minister said.

The national crisis caused by the April 25 earthquake and its aftermath has pushed an estimated one million people below poverty line. The PDNA report estimates that the poverty level would go up by more than 2.5-3.5 percent post earthquake. As per the Human Development Report (2014), the poverty prevalence in Nepal is 23.8 percent.

“Measures will  be taken to revive them to their original status and reducing poverty,” Mahat said.

Considering the slow pace of development activities as well as rescue and relief measures in the immediate aftermath of the quakes due to the lack of elected local bodies, the government said that it would hold the election of local government at the earliest.

Mahat also announced that the government would take the “carrot and stick” approach while re-prioritising the ongoing projects and programmes. “Funding would be cut down to unproductive projects and programmes. But the national priority projects will continue to receive enough resources,” the minister said, adding that government agencies failing to spend available resources would be blacklisted and the officials responsible would be penalised.

Published: 02-07-2015 07:38

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