A Realistic Budget
Finance Minister Dr. Yubaraj Khatiwada presented Rs. 1.315 trillion budget for the fiscal year 2018/19 the other day aiming to gain an ambitious eight per cent growth of economy. The budget has major allocations in the health (Rs. 56.4 billion), education, science and technology (Rs.134.5 billion), energy (Rs. 83.8 billion), urban development (Rs. 33.3 billion), transport infrastructure (Rs. 109.3 billion) and post-quake reconstruction (Rs 151. billion).The finance minister while presenting the first federal budget of the nation allocated one-third of the total budget to the federal provinces and local bodies. As against the wider speculation, Dr. Khatiwada increase the budget size by only 2.82 per cent (only Rs. 36 billion increase over the current budget) which suggests that he had tried to make it well-sized aimed at much needed discipline in the implementation of programmes mentioned in budget. The Finance Minister has lowered total expenditure estimates by putting it at Rs.313.99 billion for development budget as against the last fiscal's Rs.335.27 billion. Also, the new fiscal budget lays emphasis on energy, infrastructure and budgetary reforms.
The budget has special focuses on major programmers such as the Prime Minister Employment Programme to create five hundred thousand employements, setting up of health institutions in each ward, citizen health programmes, Rs. 1,00,000 insurance for citizens above 70, construction of airport in Kavreplanchowk, more subsidies in agriculture, 20 industrial villages in each province, brining two million tourists during the Visit Nepal Year 2020, east-west and north-south transmission lines, 3,000 megawatts hydro project through people's investments, Rs. 50,000 housing grant for people below poverty line, Mechi-Mahakali railway line feasibility study and optical fibre lines at each local unit. Likewise, the important changes in tax rates and introduction of progressive income taxes which target to collect a total of Rs.831.32 billion of revenues are another highlight of the new budget. The new tax regime has been introduced to widen the tax base by bringing all economic activities within the tax net while making the tax administration efficient. The new budget provision imposes new or increases taxes and excise duty on hazardous and luxury items. The government has also scrapped the provision of tax refund as well as education tax and VAT on health bill.
The first federal budget of the country, which has aimed at driving development at local and province level through significant budget allocations to the federal provinces and all local units, would help the government in achieving prosperity and development. The major objectives of the budget for the next fiscal is the alleviation of poverty, rapid economic, human development, social and physical infrastructure and, most importantly, creation of a socialism-oriented economy. Many critics of the government suspect the implementation of the budget programmes, the objectives of the budget is achievable because, according to many experts, the new budget is target-oriented and not distributive and populist.
Nepal is holding the fourth Summit of BIMSTEC next week. The regional body is expected to discuss various issues pertaining to connectivity, investment,...