Rs 596b budget ceiling fixed for next FY

KATHMANDU, MAR 07 -

The National Planning Commission (NPC) on Thursday fixed the budget ceiling of Rs 596 billion for the next fiscal year. The proposed annual expenditure for the next fiscal is around Rs 80 billion higher than the current budget of Rs 517.24 billion.

“Due to delay in the government formation, the NPC fixed the budget ceiling almost two months behind the schedule,” said Puspa Lal Shakya, joint secretary at the NPC. “Otherwise, such ceiling is forwarded to the Finance Ministry by mid-January every year.”

Consequently the Finance Ministry, which had planned to introduce budget in May, is now working to present it in mid-June. However, the government has yet to take a formal decision on early budget presentation which would help in increasing the capital budget.

As is customary, the largest chunk amounting to Rs 85 billion has been allocated to the Education Ministry, followed by that of the Ministry of Local Development at Rs 50 billion.

The Home Ministry stands third with Rs 49 billion, while the Ministry of Physical Planning and Works has Rs 40 billion. The Home Ministry has received the highest raise, thanks to a decision of the Khil Raj Regmi government to recruit a new batch of personnel both in Nepal Police and Armed Police Force.

“The rise in the number of police personnel and inflation are among the factors considered before increasing size of the Home Ministry budget,” said Shakya.

The Defence Ministry has also received a boost, with its budget ceiling for the next fiscal being scaled up to Rs 30 billion against Rs 27 billion allocated this year.

The ministries of Health, Defense, Energy and Agriculture Development are others to command larger budget. Allocations for most of the ministries that would otherwise get a higher size of budget, has witnessed a rise between Rs 1-5 billion. For example, budget for the education sector has been increased by around Rs 4 billion, while the local development and health will be getting Rs 4.56 billion and Rs 3 billion more.

The allocation to the Ministry of Energy has also been raised by Rs 2 billion on its current budget of Rs 30 billion.

The NPC has set a ceiling of Rs 27 billion for the Nepal Electricity Authority to carry out its projects while allocating an additional Rs 3 billion under the Energy Ministry. “If we incorporate the budget allocated to alternative energy, the size of the budget would be around Rs 32 billion,” said Shakya.

The agriculture sector, another prioritised sector, has received a hike of just Rs 1 billion on its current budget.

Meanwhile, the government is scheduled to discuss on budget preparations, starting from the first week of April.

“Our target is to introduce the budget in the last week of June or first week of July,” said a Finance Ministry official.

According to Shakya, the NPC has raised revenue collection target by 23 percent to Rs 424 billion to fund the proposed expenditures. The NPC  has set Rs 124 billion in foreign assistance—another major source of funding.

The shortfall of Rs 48 billion will be met through internal loans.

Proposed annual expenditure

Major ministries     Ceiling (2014-15)

Ministry of Education    Rs 85b

Federal Affairs and Local Dev Ministry    Rs 50b

Ministry of Home    Rs 49b

Ministry of Physical Infra& Transport     Rs 40b

Ministry of Health and Population    Rs 33b

Ministry of Energy    Rs 30b

Ministry of Defense     Rs 30b

Ministry of Irrigation    Rs 14b

Ministry of Forestry     Rs 9.37b

Ministry of Agriculture    Rs 22.5b

Source: National Planning Commission

Source: The Kathmandu Post