Energy, agriculture, infrastructure and tourism will be in focus as Finance Minister Yubaraj Khatiwada presents the federal government’s budget for the next fiscal year in Parliament on Tuesday.

As Khatiwada unveils his first budget, all eyes are on how he strikes a fine balance between addressing popular aspirations for development and maintaining fiscal discipline.

In its programmes and policies passed on Sunday, the communist government led by KP Sharma Oli has outlined a number of pet projects on infrastructure and social development.

While the National Planning Commission (NPC) has set a ceiling of around Rs1.2 trillion, Finance Ministry sources say the budget will be  as big as Rs1.45 trillion. The government has numerous public expectations to meet and electoral pledges to honour in the fiscal document, said officials.

The government aims to collect Rs1 trillion in revenues in the upcoming fiscal year while Rs300 billion is expected to be raised in foreign aid. Sources said significant amounts of funds would be allotted to provincial and local governments, even as they will be short of demands, according to Finance Ministry officials. The provincial and local governments are likely to get around Rs400 billion from the federal government.

The budget also aims to achieve around 8 percent economic growth to meet the targets set by the annual policies and programmes such as doubling per capita income in five years. The government aims to achieve double digit growth after a near double digit growth in the initial years.

Prime Minister’s Chief Adviser Bishnu Rimal said civil servants’ salary will not increase this time but some sort of adjustment would be made in allowances and indirect benefits. The government is unlikely to increase social security allowances, as promised in the election manifesto, due to additional resource needs of local and provincial governments.

According to Finance Ministry sources, significant amounts of funds will be mobilised for flagship projects in the sectors of energy, tourism, agriculture and infrastructure, including PM Oli’s dream projects like railways and waterways.

Newly announced Madan Bhandari Highway, feasibility study for Nepal-India waterway and railway expansion including metro rail in Kathmandu are some of the big ticket projects to be announced in the budget.

Compared to past years, the budget will earmark more funds for the Kathmandu-Tarai Expressway and railway projects. Giving infrastructure development a major push, there will be huge resources for energy and irrigation sectors with Sunkoshi-Marine Diversion Programme and Butwal-Sunauli cross-border transmission line as major highlights.

Promotion of domestic industries will be another key feature of the budget while industries using Nepali raw materials will be attached high priority.

With the government’s budgetary system under strain, the new budget, according to sources, is likely to revise the tax regime significantly.

According to officials, there will be changes in the income tax ceiling while more taxes will be levied on import of luxury items such as cigarettes and liquor items.

In a bid to increase the government’s sources of income, the budget will explore new areas of revenue including fees, royalties and land registration taxes.

The budget will introduce a programme named ‘Sustainable Energy for All’, focusing on hydroelectric and renewable sources.

“We’ve focused on reservoir projects as well as expansion of transmission lines under this programme,” said an NPC member. The Nepal Clean Environment Campaign is another scheme likely to be announced with focus on curbing air pollution through promotion of electric vehicles.