The budget announcement made on Tuesday was the third in a series this fiscal year --something that happened for the first time in the country´s history. [break]
The budget, which includes estimates of the government´s income and expenditure for this fiscal year, was prepared by adjusting amounts appropriated in the two financial ordinances presented by the Baburam Bhattarai-led government on July 15 and November 20.
This budget, or the appropriation ordinance, along with the Financial Ordinance and the Ordinance to Mobilize Internal Debt, was endorsed by President Ram Baran Yadav on Tuesday, said Finance Minister Shankar Prasad Koirala releasing the budget.
Since no change will be made to tax and fee structures this fiscal year, and the procedure of revenue collection will also remain the same, the content of the Financial Ordinance 2013 will be same as that of the Financial Act 2012, according to Koirala. However, the endorsement of the Ordinance to Mobilize Internal Debt has paved the way for the government to raise domestic debt in case of need.
The current full-sized adjusted budget has allocated Rs. 279.01 billion or 68.92 percent of the total budget for recurrent expenditure, Rs 66.13 billion or 16.34 percent of the total budget for capital expenditure and Rs 59.67 billion or 14.74 percent of the total budget for financing provisions.
Earlier in November, the Bhattarai-led government had appropriated Rs 246.87 billion for recurrent expenditure, Rs 51.34 billion for capital expenditure and Rs 53.72 billion for financing provisions, framing a budget of Rs 351.93 billion.
This means the budget announced by the finance minister on Tuesday has made an addition of Rs 52.89 billion to the previous Appropriation Ordinance brought by the Bhattarai-led government.
The current budget has allocated Rs 6 billion for polls and additional Rs 8 billion for security arrangements for election. It has also provisioned Rs 1 billion to provide pension to retired teachers.
Among others, it has allocated Rs 300 million for export promotion subsidy and Rs 20 million to initiate the preliminary tasks of promoting “One District, One Product” program under which herbs production is being promoted in Okhaldhunga, honey in Arghakhanchi, trout fish in Rasuwa, vegetables farming and storage in Dhading, orange juice in Sindhupalchowk, seeds production and packaging in Pyuthan, dairy production in Bara, fisheries in Rautahat, high-value stones in Jajarkot and Pashmina wool in Manang.
- Recurrent expenditure - Rs 279.01 billion
- Capital expenditure - Rs 66.13 billion
- Financing provisions - Rs 59.67 billion
- Budget deficit - Rs 63.83 billion
- Election (including security) - Rs 14 billion
“I have also appropriated necessary funds to extend 50 percent subsidy on insurance premium paid by farmers who want to insure fish, poultry and agricultural products, under the insurance scheme introduced on January 14,” said Koirala.
Likewise, adequate funds have also been stipulated for Priority One Projects like Rani Jamara Kularia, Sikta, Babai and Mahakali irrigation projects, Kathmandu Valley Urban Road Project, postal highways, Mid-hills Highway, Road Sector Development Project, Sub-regional Transport Enhancement Project, District Road Support Project and Ring Road Improvement Project.
“Arrangement has also been made to complete and operate the Bhairahawa Special Economic Zone within this fiscal year,” said Koirala.
To meet all these expenses, the government has estimated collection of Rs 289.60 billion through revenue, Rs 4.39 billion from receipt of principal repayment and Rs 46.98 billion from foreign grants.
Since the government´s income sources this fiscal year is not expected to meet projected expenses, it will result in a budget deficit of Rs 63.83 billion. This gap will be filled by acquiring foreign loans of Rs 25.83 billion and credit of Rs 38 billion from the domestic market, said Koirala.
Highlights
- Rs 1 billion in pension fund for retired teachers
- Rs 300 million for export promotion
- 50% subsidy on insurance of agro-products, poultry, livestock and fisheries
- Adequate funds for Priority One Projects
- Bhairahawa Special Economic Zone to come into operation this FY
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