Budget for FY 2024/25 is more realistic, not distributive: FinMin Pun

Published On: May 30, 2024 09:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 30: Finance Minister Barsha Man Pun has said that the government did not take any prejudice while allocating funds and revising tax rates in the budget for the next fiscal year.

Speaking at a press meet to discuss the budget announced on Wednesday, Finance Minister Pun claimed that the government through the budget aims to commence a new phase of economic reform. “We have assessed scientifically the rationale of revising the tax rates on a number of headings before taking them into action,” he said.

The government has announced a total budget of Rs 1.860 trillion for the fiscal year 2024/25. Of the total amount, 61.31 percent has been allocated for recurrent expenditure, while 18.94 percent (Rs 352.35 billion) has been earmarked for the development projects.

The government has been criticized for breaching the budget ceiling of Rs 1.8 trillion set by the National Planning Commission. Minister Pun has also been facing criticism for hiking tax rates on electric vehicles. Likewise, the issues like revision of taxes on a number of goods including onion and potato, petroleum products and raw materials of iron rods, imposition of luxury tax on airfare and reduction of grants on imported chemical fertilizers have also dragged the annual budget into controversies.  

Pun however said that the government has not formulated the budget under pressure of any influential groups. “The government has not introduced a distributive budget this time. Rather it focuses on allocating adequate funds for the projects that are found viable and those which are near completion,” Pun added.

The government has allocated the largest funds of Rs 203.66 billion to the education sector, which is Rs 4.66 billion more than the budget for the sector in the last fiscal year. The budget for six ministries including the Ministry of Industry, Commerce and Supplies,  Ministry of Agriculture and Livestock Development, Ministry of Water Supply and Sewerage Management and those related to land management, tourism and communications have been slashed. On the other hand, the budget has allocated more funds for the other 12 ministries of the government.

Pun said the budget has focused on fulfilling mainly five transformative objectives than distributing funds for numerous priority sectors. According to him, the government has given much priority to IT-related businesses.

In the next 10 years, the government aims to export IT products worth Rs 3 trillion.  

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