MoF readies budget draft
KATHMANDU, JUL 04 -
Following the presentation of the government’s policies and programmes on Sunday, all attention has now zeroed in on the annual budget. The budget division at the Ministry of Finance (MoF) has completed the first draft of the government’s annual expenditure and income statement of around Rs 385 billion for the next fiscal year.
The budget will get the final shape once the flagship programmes of major political parties are incorporated. The budget draft has already reached to Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari.
The size of the budget has exceeded the ceiling fixed by the National Planning Commission (NPC) by Rs 4 billion. The NPC had fixed the ceiling at Rs 381 billion. “The size slightly went up while pleasing all the ministries,” said a ministry source. According to MoF officials, ministries’ demand was of over Rs 450 billion.
Every year, the finance ministry has to address the demands of major political parties when the budget making process enters its final stage. Generally, parties force the ministry to incorporate programmes that are generally meant for their cadres.
Along with the programmes aimed at addressing the current economic crisis, the main opposition Nepali Congress (NC) has demanded continuation of some populist programmes introduced by the governments it had led in the past. The programmes include Bisheshwer with the Poor, Ganesh Man Singh Peace Initiative, Mahila Jagriti (Women Empowerment). Madhesi parties have also threatened of blocking the budget presentation if their concerns were not addressed.
Finance ministry officials say around Rs 5 billion is enough to incorporate programmes asked by the parties. “About Rs 5 billion is enough to incorporate programmes desired by the parties without hampering the resources earmarked for programmes already mentioned in the budget draft,” said a ministry official. “Therefore, there won’t be major changes to the size of the budget that has been fixed in the draft. It could reach a maximum of Rs 390 billion.”
In order to address political parties’ demand, the ministry usually makes a smart move: increasing the size of internal loans.
Amid widespread speculation that the upcoming budget would be distributive, the ministry source claimed that programmes incorporated in the budget draft were not as distributive as speculated. “However, the chances of a distributive budget cannot be ruled out, if parties seek to add programmes of their wish,” said MoF official.
Education, infrastructure, local development and health are the four sectors that have been allocated the largest resources in the budget. The budget has allocated Rs 61 billion for education, Rs 44 billion for infrastructure, Rs 43 billion for local development and Rs 25 billion for the health sector.
According to MoF sources, the budget will not have new big infrastructure projects. Instead, it has prioritised the fast completion of two major infrastructure projects—Mid-Hill highway and Kathmandu-Tarai Fast Track—as mentioned in the government’s policies and programmes. These projects will be getting Rs 1.5 billion each. The government aims to complete the track opening of these two roads within the next fiscal year.
A huge resource allocation for infrastructure is understandable, as the policies and programmes have prioritised the completion of irrigation projects including Sikta and Ranijamara-Kulariya. The government will also undertake the construction of Bheri-Babai diversion project and fast-track the construction of Upper Tamakoshi, Chamelia, Kulekhani III, Upper Trishuli 3A and Rahughat hydropower projects, according to the Policies and Programme.
With the policies and programmes mentioning that the government will take action against businessmen involved in tax evasion using fake value added tax bills, the possibility of the budget awarding them relief has ended.
Source: Kantipur
Following the presentation of the government’s policies and programmes on Sunday, all attention has now zeroed in on the annual budget. The budget division at the Ministry of Finance (MoF) has completed the first draft of the government’s annual expenditure and income statement of around Rs 385 billion for the next fiscal year.
The budget will get the final shape once the flagship programmes of major political parties are incorporated. The budget draft has already reached to Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari.
The size of the budget has exceeded the ceiling fixed by the National Planning Commission (NPC) by Rs 4 billion. The NPC had fixed the ceiling at Rs 381 billion. “The size slightly went up while pleasing all the ministries,” said a ministry source. According to MoF officials, ministries’ demand was of over Rs 450 billion.
Every year, the finance ministry has to address the demands of major political parties when the budget making process enters its final stage. Generally, parties force the ministry to incorporate programmes that are generally meant for their cadres.
Along with the programmes aimed at addressing the current economic crisis, the main opposition Nepali Congress (NC) has demanded continuation of some populist programmes introduced by the governments it had led in the past. The programmes include Bisheshwer with the Poor, Ganesh Man Singh Peace Initiative, Mahila Jagriti (Women Empowerment). Madhesi parties have also threatened of blocking the budget presentation if their concerns were not addressed.
Finance ministry officials say around Rs 5 billion is enough to incorporate programmes asked by the parties. “About Rs 5 billion is enough to incorporate programmes desired by the parties without hampering the resources earmarked for programmes already mentioned in the budget draft,” said a ministry official. “Therefore, there won’t be major changes to the size of the budget that has been fixed in the draft. It could reach a maximum of Rs 390 billion.”
In order to address political parties’ demand, the ministry usually makes a smart move: increasing the size of internal loans.
Amid widespread speculation that the upcoming budget would be distributive, the ministry source claimed that programmes incorporated in the budget draft were not as distributive as speculated. “However, the chances of a distributive budget cannot be ruled out, if parties seek to add programmes of their wish,” said MoF official.
Education, infrastructure, local development and health are the four sectors that have been allocated the largest resources in the budget. The budget has allocated Rs 61 billion for education, Rs 44 billion for infrastructure, Rs 43 billion for local development and Rs 25 billion for the health sector.
According to MoF sources, the budget will not have new big infrastructure projects. Instead, it has prioritised the fast completion of two major infrastructure projects—Mid-Hill highway and Kathmandu-Tarai Fast Track—as mentioned in the government’s policies and programmes. These projects will be getting Rs 1.5 billion each. The government aims to complete the track opening of these two roads within the next fiscal year.
A huge resource allocation for infrastructure is understandable, as the policies and programmes have prioritised the completion of irrigation projects including Sikta and Ranijamara-Kulariya. The government will also undertake the construction of Bheri-Babai diversion project and fast-track the construction of Upper Tamakoshi, Chamelia, Kulekhani III, Upper Trishuli 3A and Rahughat hydropower projects, according to the Policies and Programme.
With the policies and programmes mentioning that the government will take action against businessmen involved in tax evasion using fake value added tax bills, the possibility of the budget awarding them relief has ended.
Source: Kantipur
