Targeting possible power trade with India in the future, the new budget will also include holding of a detailed project report of a new cross-border transmission line between the two countries.
A 400kv Dhalkebar-Mujaffarpur cross-border transmission line is under construction, while existing transmission lines are of low capacities, preventing the country from importing more electricity from India during peak power deficit.
During the seventh meeting of the Nepal-India Joint Committee on Water Resources (JCWR) held in Kathmandu in January 2013, the neighbours had agreed to work on a new transmission line connecting India’s Gorakhpur and a suitable location near Bardaghat, Nepal, under the government-to-government cooperation. Even the Asian Development Bank has expressed interest in investing the second mega cross-border transmission line.
Another programme planned in the budget is providing cash incentives to hydropower projects. According to a Finance Ministry source, the National Planning Commission (NPC) has recommended introducing such a provision and the issue is likely to be incorporated in the budget .
The government has already announced providing value added tax (VAT) incentives to hydropower projects on various construction materials. However, private sector power developers have said they have not received the facility yet.
“We have suggested providing cash incentives to power projects instead of VAT exemption as it is good to implement the tax system universally,” said NPC Vice-chairman Govinda Raj Pokharel.
The planning commission has suggested providing cash incentive of Rs 10-20 million per megawatt for projects that complete within the next five years. “Currently, a hydropower project enjoys around Rs 10 million in VAT exemption and we have proposed increasing the amount through cash incentive,” an NPC official. “Developers will get the facility after they complete the project in time.”
The budget will also announce policies on contract farming, which the country’s business community has long been demanding. “The budget is likely to announce facilities for contract farming,” said a ministry source. “The government may announce facilities like cooling centres and subsidy on chemical fertilisers for those engaging in contract farming.”
NPC’s Pokharel said farming land in rural areas, which is turning barren due to increased migration, could be utilised through contract farming.
Source : The Kathmandu Post