Budget 2079/80 Highlights: All Sectors Covered

Budget 2079/80 Highlights:

The minister of Finance, Janardan Sharma announced the Budget of Nepal for Fiscal Year 2079/80 after approval of the cabinet meeting in the joint sitting of the federal parliament.

Budget Goals: Stability, productivity, and employment growth.

The major purpose of the budget is to decrease imports by 20% and increase export by double.

Budget Size: 17.93 Kharba,

Re-Current Expenditure- 7.53 Kharba

Capital Expenditure- 3.80 Kharba (21.2%)

Financial Management- 2.30 Kharba (12.8%)

Financial Handover to Province/Local Government - 4.29 Kharba (24%)

Sources to attain the required amount to meet the budget size;

• Through Tax                         - 12.40 Kharba
• Through Grants                    -55.46 arba
• Through Foreign Loans        - 2.42 Kharba
• Through Internal Loan         - 2.56 Kharba

Allocation of Budgets:

• Tourism Sector: Rs. 9.38 Arba
• Ministry of Agriculture and Livestock Development: Rs 55.97 Arba
• Industrial Infrastructure: Rs 3.89 Arba
• Ministry of Industry, Commerce and Supplies: Rs 10.48 Arba
• Prime Minister's Employment Program: Rs 7.5 Arba
• Health Insurance Program: Rs 7.5 Arba
• Ministry of Health and Population: Rs 69.38 Arba
• Rs. 2 Kharba to state and Rs. 40 Arba to the Local level
• Per capita income of Nepalis increased by Rs 18,000.
• Establishment of business incubation centers: Rs. 26 Crores.
• Rs.6.53 Arba budget allocation for railway construction.
• Rs.2.46 Arba to the Ministry of Youth and Sports.
• Rs.13 Arba allocation in forest and environment sector.
• Rs. 6.70 Arba allocated for postal highway.
• Continuity of constituency strategic road; Rs. 7 Arba.
• Rs. 70.05 Arba for Education Sector.
• Rs. 1.42 Arba for the construction of all local level administrative buildings within two years

Health Sector:

• Rs 6 Arba has been allocated for health in the states and Rs 27 Arba at the local level.
• Free health check-up once a year for people over 40 age.
• Rs 200 million has been allocated for installing dialysis machines at each provincial hospitals.

Tourism/COVID Relief and related Sectors:

• 10 lakh tourists to be attracted next FY
• Hotel businesses affected by COVID-19 will get an exemption of license and renewal fees.

Agriculture Sector:

• The government has introduced Kisan Pension Scheme. The government will deposit 10 percent of the amount deposited by the farmers in this scheme.
• Imports of paddy, maize, wheat, and vegetables will be reduced by 30 percent.
• Rs 45 Crores was allocated for 100 food warehouses across the country.
• A microfinance fund will be established to disburse loans equal to Rs. 5 Kharba to provide agricultural loans at home.
• 80 percent premium of agricultural insurance will be borne by the government.

Government Policies in Business Sector:

• Only entities and individuals who have obtained permission from the official body will be allowed to trade real estate.
• Up to 8 percent cash subsidy on cement, steel, footwear and treated water exports
• Cooperatives should invest 50 percent in the productive sector.
• The government is going to open the way for Nepali construction businessmen to serve abroad.
• Loan is available on project collateral to manage capital from Venture Capital.
• Government land leased for 50 years for setting up industries
• To encourage the operation of sick industries in the private sector.
• Cement and Other export-oriented industries to be benefitted
• Seed capital will be provided through venture capital to support the startup business.
• The interest rate of productive sector and business loan will be different.
• Each branch of commercial banks will have to provide loan to at least 5 agricultural production and processing industries.
• Government announces to operate Hetauda textile industry.
• Local infrastructure department dismissed.
• Green Hydrogen and Green ammonia-based fertilizers factory will be established in the collaboration with Investment Board.
• Government to build 13 big hydropower

Salaries:

• Salaries of government employees increased by 15 percent.
• Salary of employees of different levels has been increased from at least Rs. 3520 to Rs. 10260.
• Salary of teachers, army and police will also increase. This will also increase the income of pensioners.
• The increased salary will be applicable for civil servants as well as police, army, teachers, and professors.
• The salary of the second tier has increased by about Rs 3700 to Rs 28,355.
• The salary of the third tier employees has also increased by around Rs. 3900 to close to Rs. 30,000.
• The current monthly salary of the fourth level employees has been increased by about Rs. 4200 and that of the fifth level employees by about Rs. 4600.
• The salary of Gazette Anankit employees has been increased from a minimum of Rs 4560 to a maximum of Rs 4920.
• The monthly salary of government employees has risen from at least Rs 26,990 to Rs 78,667. Apart from this, they will also get an additional monthly allowance of Rs 2000.
• The monthly salary of the secretary will reach Rs 56,582 while the monthly salary of the special secretary will be Rs 66,652. Similarly, the Chief Secretary has reached Rs 70,406.
• Employment will be increased by 30 percent annually.

Others:

• Newa Museum will be established in Kathmandu.
• The government has lowered the minimum limit for foreign investment to Rs 2 Crore. At present, the limit is Rs 5 Crores.
• Arrangements to sell apartments to foreigners
• Self-employed citizens will be included in the citizen pension scheme.
• Old age allowance in 68 years now. Previously, it was 70 years.
• One electric stove per family will be distributed at the local level.
• Minimum is FDI Rs 2 crore
• Government offices are encouraged to use domestic produced goods
• To provide barren land on lease
• Private equity and venture capital will be allowed to operate.
• Rs 500,000 minimum income tax slab for unmarried people.
• Rs 600,000 minimum income tax slab for married people.
• The limit of discounted insurance premium is Rs.40,000 from present Rs 25,000.
• The previous monthly allowance of Rs 2,000 has been continued.
• The government has made arrangements for free kidney transplants.
• Concessional loans to returnees from foreign employment.
• LPG subsidy will be removed, the price of cooking gas will increase.
• Provision of safe housing for the extremely poor, dalit and endangered castes.
• Now also public welfare advertisements to online media.
• Reduced internet service charges.
• Announcement to develop Marin of Sindhuli as a new city.
• Entrepreneurial housewife program will be conducted.
• The economic growth rate will be 5.8 percent.
• Petroleum pipeline from Siliguri in India to Jhapa will be made soon.
• Inflation target for next year is set to be below 7%
• National Cyber Security Center will be established to ensure cyber security among the citizens and digital forensic research of digital systems of governmental units.

Education Sector:

• Announcement to start technical education in 12 hundred schools across the country.
• Rs 8.3 Arba has been allocated for Technical and Vocation Education programs.
• The loans for startups and young entrepreneurs on the collateral of their educational certificate have been continued
• Rs 10 crores has been allocated for the procurement of internet and digital boards in 20 schools in all provinces.

Financial Sectors:

• Concessional loans will be provided through microfinance.
• 5 Kharba microfinance fund, farmer pension program will be started to give loans to farmers through microfinance.
• Insurance companies must invest a certain percentage of their profits in the infrastructure sector.
• Hedge funds will be established to reduce the risk of forex rate fluctuations in the international investments
• All the payment collections and payouts from three levels of the government will be made through the banking channel
• Required provisions will be made to develop fully digitized banking services
• The online trading system of the securities market (NEPSE) will be improved
• Legal provisions will be made to allow NRNs to invest and trade in the secondary capital market
• 10% share quota for IPOs to be allocated for the Nepali investors living abroad.
• Companies with capital more than Rs. 1 Arba must issue IPO
• Companies that does transactions of more than Rs. 5 Arba must issue IPO.
• Companies that uses natural resources and enjoys government benefits are to issue IPO.

 Electricity Sector:

• 2 to 15 percent concession to industries consuming Rs 10 crores electricity yearly.
• IPO of Nepal Electricity Authority granted at a premium price. To invest the collected amount in the project containing the reservoir.
• Electricity will be considered the major exporting product for improving international trade and decreasing the trade deficit.
• People who consume less than 20 Units of electricity should not pay the price of electricity.

Youth and Sports:

• The construction of Mulpani cricket stadium to be over this year.
• Kirtipur stadium to be upgraded to host night time events.
• Gautam Buddha International Cricket Stadium to be taken over by the government.
• Lifelong monthly life insurance for Asian and Olympic medalists.

Railways, Airways and Roadways:

• Dadeldhura Balewa Dang and Tikapur airports will be upgraded.
• Arrangements will be made for electronic payment in transportation in major cities.
• Government announces to build three expressways connecting Chitwan with Kathmandu, Butwal and Pokhara.
• Supreme Court has to allocate budget for the construction of Nijgadh International Airport.
• Announcement to expand Narayanghat road section.
• The government has given priority to roads connecting China.
• Accelerate the construction of East-West Railway Bardibas - Nijgadh section.
• Rs. 5 Arba to Nagdhunga tunnel.
• Rs. 9.33 Arba budget for Pushpalal Highway.
• Rs 1 Arba budget for the expansion of the ring road.
• Rs 12.24 Arba has been allocated for the improvement of airways infrastructure in Nepal.
• Utility Corridors will be developed to remove the repetition of maintenance works on the roads and urban settlements and the inconvenience caused by them.
• Unbundling of the Civil Aviation Authority of Nepal into two bodies.

Tax rebate:

• Only one percent tax will be levied on singles up to Rs 500,000 and up to Rs 600,000 on couples. Earlier, it was Rs 4 lakh for singles and Rs 4.5 lakh for couples.
• The limit of tax exemption from insurance premium has also been increased. The limit of Rs.20,000 has been increased to Rs. 40,000. 
• Electrical vehicle assembling factory to get 40% tax deduction for 5 years.