Minister for Finance Ram Sharan Mahat has said that the government is coming up with a substantial plan to increase investment in the energy sector through the budget for next fiscal year. The sector has been given priority to end load-shedding within the next three years and help achieve healthy economic growth.
Addressing a pre-budget discussion programme on Sunday, Minister Mahat said that the government is giving priority on increasing economic growth rate through the development of hydropower, the leading sector. “The government will be doing major investment in high voltage transmission lines in corridors like Karnali and Marshyangdi,” he said.
Lack of transmission lines has been a major problem for potential local and foreign investors in the hydropower sector. Mahat said that since energy was the main bridge to reduce the trade deficit and increase growth rate, there has been a need for investment in hydropower with focus on storage type of hydropower projects from the government, private sector and foreign investors, to address the demand during the dry season and export to India.
Achieving seven-eight per cent growth rate has become a must to graduate from the present status of least developed country (LDC) to a developed nation. This year, the government has projected 5.5 per cent economic growth. However, the present growth rate is not adequate to gain the status of a developed country by 2022 as targeted by the government.
“We must nearly double the growth rate to eight per cent to graduate as a developed country within the next seven years,” the finance minister said. According to him, upgrading highways, irrigation projects and airports are also in high priority of the government in the upcoming budget. A recent study of the World Bank states that only Nepal and Afghanistan will remain an LDC from South Asia by 2020.
Newly appointed Vice Chairman of National Planning Commission (NPC) Govinda Raj Pokhrel, in the programme, said that the government has to focus on mainly three sectors — energy, agriculture and tourism — in the budget. “Since we have witnessed good investment in hydropower in the last last couple of years, the budget has to focus on creating an environment for investment.”
NPC has fixed the size of the budget for next fiscal year at Rs 596 billion. However, Deependra Bahadur Kshetri, former vice chairman of NPC said that the ceiling was inadequate as people had more expectations from the government. “The budget should be of Rs 650 billion and include new plans that will help generate employment opportunities at the local level.”
Private sector representatives said that electricity shortage was a major hurdle causing low industrial output, which subsequently leads to fewer exports and huge trade deficit. They have suggested the government to increase investment in infrastructure sector. “Of the total investment in infrastructure, private sector should contribute at least 10 per cent,” said Pradeep Jung Pandey, president of the Federation of Nepalese Chambers of Commerce and Industry.
Amid failure to see satisfactory performance in Priority One (P1) projects, participants at the programme asked government to review list of P1 projects. Of the total projects being carried out by the government around 90 per cent of them are in the P1 list. Around Rs 58 billion has remained surplus at Nepal Rastra Bank in first nine months of current fiscal due to failure to increase capital expenditure.
Source : The Himalayan Times