Energy, agri sectors likely to get good slice of budget pie

Ministry of Finance

KATHMANDU, JUN 29 –

Ministry of FinanceThe government plans to allocate a hefty sum to the energy and agriculture sectors in its budget for the next fiscal year.

After making energy as the top priority area, the government plans to invest massively in both power generation and transmission lines, while it also plans to invest a good amount in commercialisation of the agriculture sector.

“We have re-prioritised the energy sector as the first priority area and there will be big investment from the government, private sector and donors,” Finance Minister Shankar Prasad Koirala told the Post. He did not want to mention the exact figures of the amount.

A high-level source at the Finance Ministry, however, said the budget for the agriculture sector would be over Rs 20 billion, up from the last fiscal’s Rs 12.29 billion.

Despite the priority accorded to the energy sector, finance ministry officials are critical of the Energy Ministry and Nepal Electricity Authority (NEA) for failing to propose ‘new innovative projects.’

The government also plans to introduce a number of new programmes through the upcoming budget . “We plan to install solar-powered street lamps in major cities of the country,” the source at the ministry said. “The concept has been introduced in order to keep the cities illuminated at night time.”

The government is also discussing the possibility of providing cash incentives to migrant Nepali workers who send remittance through the banking system. “A fund will be created for the purpose, which will reimburse a certain amount of the remittance after calculating the total amount sent,” the source said.

The source added that such incentives are being planned to encourage the workers to send in money through banks instead of informal channels.

The government further plans to establish medical colleges in the Far West, while

also planning disability allowance for all the differently-abled people.

According to the source, the government also plans to increase the budget for old age homes.Further, female community health volunteers (FCHV), whose contribution to reducing infant and maternal mortality rate has been widely appreciated, are likely to receive a hike in allowances, the source said. There are currently 52,000 such health volunteers in the country.

In order to promote mergers among banks and financial institutions, the government plans to give tax incentives through the new budget . “It is most likely that the corporate income tax will be slashed to 25 percent from the current 30 percent for financial institutions that go for merger,” the source said.

The budget will also authorise the Securities Board of Nepal to regulate the commodities market, which remains unregulated, resulting in many investors being duped.

On the budget for the November Constituent Assembly elections, Koirala said it is likely to remain at the range of Rs 14-15 billion.

The government also plans to spend through the Peace Fund where it has given Rs 3 billion, while donors have promised to chip in with Rs 4 billion, according to Koirala.

Amid demands for a hike in the salary of government employees, Koirala hinted that there could indeed be an increment. “Based on the Civil Service Act, they are entitled to a pay hike next fiscal,” he said.

According to the ministry source, the government has targeted revenue growth at 25 percent, which is a bit higher than the revenue growth rate this fiscal year.

Although the Finance Minster had been saying that the target would be around 35 percent, the source said the minister has now realized that keeping the rate so high will not be logical. “The economic growth target will be six percent, while maintaining a single digit inflation,” the source said.

What all is in store

• Double amount of money in energy and agriculture sectors

• Solar-powered street lamps in major cities

• Election budget likely at range of Rs 14-15 billion

• Cash incentives for migrant workers sending remittance through banks

• Allowance hike for female community health volunteers

• Disability allowance to cover all differently abled persons

• Tax incentives for merger of banks, financial institutions

Source : The Kathmandu Post