Amid widespread suspicion on the implementation of the budget, which was announced through ordinance due to objection from main opposition UCPN (Maoist), Pandey assured that implementation of budget will have a smooth sail.[break]
“Process of implementing the budget has formally begun. I have already instructed concerned government offices for the implementation of the budget. Process of releasing allocated funds will begin within two or three days,” Pandey said at an interaction organized by Society of Economic Journalists-Nepal (SEJON).
Experts have raised concerns over successful implementation of the budget as the UCPN (Maoist) has expressed strong reservation on the announcement of full-fledged budget by a care taker government.
Pandey argued that the new budget would give a new lease of life to the national economy that has taken a severe beating due to delay in budget announcement. “Along with promoting export and substituting import, the budget has given huge priority to the development of infrastructures, a crucial sector of national economy,” he added.
Pandey said the government has allocated a huge amount in major infrastructure projects like Kathmandu-Terai fast track road, bridges along postal roads, Sikta irrigation project and Mid-hills Highway, among others to show that the government is capable of implementing big projects through its own resources.
Minister Pandey also expressed commitment to divide land into six categories for effective land management by making special mechanism.
Speaking on the occasion, senior economist Dr Bishwombher Pyakurel, expressed objection over the government program to provide incentive only to big industries. “It seems that that the government is influenced by big industrialists, because the budget has no program to promote small and medium enterprises (SMEs),” Pyakurel said.
Commenting on the increment in capital expenditure, he further added that bureaucratic hassles and procedural delays might hit the implementation aspect.
He also said the government projection of 4.5 percent growth would be difficult to achieve. “Existing economic indicators show that we can´t achieve economic growth higher than 3.8 percent during 2010/11,” he added.
Sashin Joshi, president of Bankers´ Association Nepal, said the exemption of capital gains tax (CGT) in merger alone will not encourage merger and acquisitions of financial institutions unless the government lowers corporate tax for financial institutions.
“We would already have seen merger of at least five or seven financial institutions had the government lowered the corporate income tax rate to 20 percent from existing 30 percent,” Joshi added.
The budget includes programs to encourage merger of banks, finance and insurance companies by introducing changes in provision of tax assets and liabilities as disposal after merger to make it non-taxable.
Joshi also suggested the government to set up a separate agency other than the Department of Revenue Investigation to monitor and investigate cases filed under the Anti-Money Laundering Act.
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