Finance Minister Yuba Raj Khatiwada has presented a budget of Rs 1.474 trillion for the fiscal year 2077/78 on Thursday. It was Rs 1.532 trillion for the fiscal year 2076/77.
He has allocated Rs 948 billion (64%) for recurrent expenditure, Rs 352.91 billion (23.9%) for capital expenditure, and Rs 172.79 billion (11.7%) for debt financing.
The budget plans to generate Rs 889.62 billion through revenues, Rs 60.52 billion through foreign grant and generate the remaining amount through foreign loans (Rs 299.50 billion) and domestic borrowing (Rs 225 billion).
Khatiwada aims to achieve an ambitious economic growth rate of 7 percent in the upcoming fiscal year despite the raging COVID-19 pandemic which looks set to affect at least some part of the next fiscal year. He had aimed to achieve a growth rate of 8.5 percent this year while presenting the budget last year but downgraded that to 2.3 percent citing the pandemic.
It has raised the health budget to Rs 90.69 billion mainly to fight the pandemic. The government has also pledged to bring 272 hospitals with 5-15 beds in operation at the local level in the next fiscal year.
It has allocated Rs 171 billion for education sector. The budget for physical infrastructure has been slashed to Rs 138 billion from Rs 163.52 billion from the current fiscal year.
But the government has allocated Rs 6.60 billion continuing the constituency infrastructure development program even as the pandemic has severely hit the state coffers and despite the demand of the main opposition Nepali Congress (NC) to discontinue it. It has appropriated Rs 40 million to be spent on projects selected by each directly elected federal lawmaker. It was Rs 60 million in the current fiscal year.
The government will establish a fund of Rs 50 billion to remunerate the workers in the tourism industry and to operate the businesses in the sector.
It has not slashed social security allowances as was feared and allocated Rs 67.85 billion for the allowances. It has also allocated Rs 11.60 billion for the prime minister employment program with an aim of providing jobs to 200,000 persons.
The government will also start national payment gateway to integrate all kinds of digital payments.
The federal government will provide Rs 55.19 billion to the seven provinces and Rs 90 billion to the local bodies.
Indian nationals will also need to acquire work permit to work in Nepal.
The government will also distribute free sanitary pads to all female school students.
The government has adopted austerity measures significantly slashing its administrative expenses.
