KATHMANDU, May 31: The government is anticipating a massive industrial and agricultural expansion this year as it has set growth target for these sectors at 12 percent and 4.5 percent, respectively, in Fiscal Year 2018/19.
The growth target for these sectors in the current fiscal year is 8.8 percent and 2.8 percent, respectively.
Similarly, the government has set a growth target of 8 percent for service sector in FY2018/19, compared to 6.6 percent in the current fiscal year – a rise of 1.4 percentage points.
Addressing a post-budget press conference in Kathmandu on Wednesday, Minister for Finance Yuba Raj Khatiwada said that the government has set a higher growth for the industrial sector to achieve the overall economic growth target of 8 percent.
Economists, private sector and even former finance ministers of the opposition party have lauded the budget. But they are skeptic about achieving such an ambitious growth target.
Such higher growth of secondary sector could be possible only after development projects, particularly Upper Tamakoshi Hydropower Project starts electricity generation and Melamchi Water Supply Project starts supplying water in the valley, are completed on time.
With more electricity generation, the government has also expected import of petroleum products, which has seen a continuous surge in recent years, to go down.
“Other important industries like manufacturing and mines will give a boost to the industrial sector growth,” he said in the press meet.
The government has also hoped that some cement industries will begin production in FY2018/19. Similarly, the government has said that it would encourage companies producing 12 types of industrial products, including those producing construction materials like cement and steel, through government support program to make the country self-reliant.
The finance minister also said that various programs like Prime Minister Agriculture Modernization Program, in a revised format, will help to increase agricultural productivity, enabling a growth of 5 percent or more.
The government has set growth target for agricultural sector at 4.5 percent.
Khatiwada also said that the government will also start building West Seti Hydropower Project by mobilizing internal resources. He indicated that no decision has been made on the fate of the much-awaited Budhigandki Hydroelectric Project.
“We don't want to be swayed on the project. But we are mulling over building the plant in public private partnership model,” said Khatiwada, indicating that the previous decisions of awarding and scrapping projects were immature.
Minister Khatiwada also revealed that he had to struggle hard to find a perfect balance on two issues – constituency development fund, and budget allocation to provincial and local units.
“Political leaders wanted more budget allocation for local units and provinces. But in other way, they themselves were lobbying to put some projects at the central level,” said Khatiwada.
Khatiwada, however, managed to allocate a third of the total budget for local units and provincial governments from allocation of mere 17 percent of total budget in the current fiscal year.
The other thing he indicated was the demand for constituency infrastructure development program for which he has increased the budget slightly to Rs 40 million with only five projects to be implemented in three years.
Lawmakers had placed demand for Rs 100 million worth of such projects. He was under huge pressure from his party and high profile lawmakers to include such programs in the budget. But Khatiwada managed to resist the pressure.