May 28, 2020 | Investopaper
Finance Minister Yubaraj Khatiwada has presented a budget of Rs 1.474 trillion for the fiscal year 2077/78. In the coming Fiscal Year, Rs. 890 billion will be raised from revenue, Rs. 299 billion from foreign loans, Rs. 60 billion from foreign grants and Rs. 225 billion from domestic loans.
Out of the total allocation, Rs. 948 billion has been allocated for recurrent expenditure, Rs. 352 billion for capital expenditure and Rs. 172 crore for repayment of principal and interest on loans. Thus, 64.4 percent has been allocated for recurrent expenditure, 23.90 percent for capital expenditure and 11.7 percent for financial management.
You May Also Like: Tax Changes In The Budget For Fiscal Year 2077/78
The finance minister has announced the budget targeting health, agribusiness, supply chain revival, economic recovery, relief, employment, infrastructure and implementation of federalism. Health budgets have been increased. He has allocated Rs 6 billion for corona prevention, control, testing and prevention of shortage of medicines, equipment and treatment materials.
The finance minister has allocated Rs. 12.46 billion for the development of additional health infrastructure and Rs. 14.27 billion for the construction of 272 hospitals with 5 to 15 beds at the local level. Similarly, Rs 5.10 billion has been allocated for basic health services including non-communicable disease screening with the provision of doctors in local level health institutions.
In addition to this, increase in subsidy for chemical fertilizers in the agricultural sector, provision of Farmer Credit Card for purchase of agricultural inputs, fertilizers and seeds to the farmers and provision for disbursement of loan amount after sale of produce. The budget has provided tax and interest relief to Corona-affected businesses. A refinancing fund of Rs. 100 billion has been arranged to provide loan at 5 percent concessional interest rate to the most affected areas from Corona like tourism. It is mentioned that small and medium enterprises will be rehabilitated with tax concessions and concessional loans.
The budget has been increased to Rs. 11.60 billion to create 200,000 jobs from the Prime Minister’s Employment Program. Similarly, adequate budget has been allocated for the speedy completion of large projects under construction. It has been mentioned that the distribution of water in Kathmandu Valley will start after the completion of Melamchi Drinking Water Project at the beginning of the fiscal year and Rs. 5.46 billion has been allocated for the construction of the second phase of the project.
In terms of physical infrastructure, the budget has decreased compared to the previous year. Out of the Rs. 163.52 billion allocated for physical infrastructure in the current Fiscal Year, Rs. 138 billion has been allocated in the coming Fiscal Year.
In addition to human life protection, the budget implementation aims to achieve 7 percent economic growth in the coming fiscal year.
Major Highlights of the Budget For Fiscal Year 2077/78
—Total budget Rs 1.474 trillion 640 million
Rs 948.94 billion on current expenditure (64.4%)
Rs 352.91 billion (23.9%) towards capital expenditure
Rs 172.79 billion (11.7%) towards financial management
You May Also Like: Tax Rate In Nepal [Updated]
—As per the income statement of the Fiscal Year 2076/77, special tax exemption for small and cottage entrepreneurs:
75% discount for annual transactions up to Rs 2 million
50 percent discount for those who do business from 2 to 5 million
25 percent discount for those who do 5 to 10 million transactions
Tax exemption for micro enterprises up to 7 years by adding 2 years.
Tax exemption for 10 years by adding 3 years to women-run small enterprises.
Value Added Tax (VAT) in case of micro insurance has been removed.
20% discount on tax on air service, hotel, transport service in the fiscal year 2076/77.
The government has allocated Rs. 36.35 billion to the state and Rs. 161.08 billion to the local level for conditional grant for the coming fiscal year.
The government has allocated Rs. 90.69 billion in the health sector for the coming Fiscal Year 2077/78.
Allocation of Rs 11.60 billion to create 200,000 jobs.
The government has given continuity to social security allowance.
Incentive allowance for doctors involved in corona treatment, free health insurance up to Rs 500,000.
Rs 55 billion budget allocation for the completion of remaining post-earthquake reconstruction within next year.
Tax increase on items including cigarettes, cigars, betel leaves, gutkha.
Rs 3.22 billion budget allocation for agriculture pocket sector.
Rs 1.55 billion for chure conservation.
Rs 11 billion subsidy for chemical fertilizer to farmers, 950 million to sugarcane farmers.
Government has allocated Rs 1.26 billion for tourism infrastructure development.
Security personnel and staff uniforms will be produced in Nepal.
Rs 2.46 billion allocated for health infrastructure development.
Rs 2.64 billion to establish at least one industrial zone in all the states and 130 more industrial villages at the local level.
Access road will be constructed and machinery will be connected to start production from Dhauwadi of Nawalparasi next year.
Arrangements will be made to provide modern education from Madrasas, Gurukuls, Gumbals etc. providing basic education.
Provision of conditional grant will be made to the local level to provide free sanitary pads to 1.34 million female students.
Rs 171.71 billion allocated to implement the program of the Ministry of Education, Science and Technology.
6 billion budget for President’s educational reform program.
Rs 50 billion separate fund to lend to Corona affected.
Literate Nepal to be declared next year.
Arrangement will be made to set up a trauma center in the area where more road accidents occur on the highway and to get ambulance service in the most convenient way with the same phone number across the country.
Rs 90.69 billion budget for the Ministry of Health.
Concessional loans will be provided by at least 10 per branches of commercial banks and at least 5 per branches of development banks through NRB.
Rs 67.50 billion for social security allowance.
Targeted programs will be implemented next year to become self-reliant in the production of milk, vegetables and meat products.
Landless Dalits will be identified and settled.
Arrangements will be made to provide internship to the students studying at the undergraduate level in the Agriculture Campus and to earn income for the students studying in various technical schools.
‘Kisan Credit Card’ will be provided for easy access to agricultural credit.
Tunnel construction of Sunkoshi-Marine Diversion Multipurpose Project.
Rs 950 million has been allocated to give subsidy to sugarcane farmers.
Nepal will be developed as a tourist area by protecting forts and forts and roads connected with the history of unification.
In the hilly and mountainous tourist areas, infrastructure will be developed and developed as a well-equipped hill station.
Rs 1.14 billion allocated for the Ministry of Women, Children and Senior Citizens.
Arrangements will be made to complete the construction of basic infrastructure of Melamchi Drinking Water Project within the current Fiscal Year and distribute it in Kathmandu Valley at the beginning of the next Fiscal Year.
Upper Tamakoshi, Rasuwagadhi, Sanjen and Madhyabhotekoshi hydropower projects will generate additional 1,300 MW of electricity.
Electricity wires will be made underground in big cities like Bhaktapur, Lalitpur, Chitwan next year.
Rs 2 billion for the development of infrastructure of Nawalparasi East and Rukum East district headquarters and for the infrastructure development of 10 cities along the Mid-Hill Highway.
Rs 3.5 billion rupees budget allocation to build one lakh safe houses.
Rs 12.21 billion has been allocated for the expansion of East-West Highway.
Tunnel construction will be started in Siddhababa area under Siddhartha Highway.
Allocation of Rs 8.93 billion for the completion of Kathmandu-Nijgadh fast track construction within the next 3 years.
Budget allocation to blacktop roads from all local level centers to the state capital.
Appropriation of Rs. 5.2 billion for the construction of 2,200 suspension bridges under construction to replace all types of temporary bridges.
Reconstruction of Ranipokhari, Dharara and Singha Durbar main building to be completed within next year.
4G service to be expanded across the country within next year.
Forensic laboratories to be set up in all states.
Budget has been allocated for the construction of 39 more border outposts of the Armed Police for border security.
Electronic passport program will be implemented from next year.
Achieve austerity in administrative expenses: Significant budget cuts in foreign travel, office operations, furniture, etc.
Additional allowance, incentive allowance, risk allowance and other facilities will be revoked from Shrawan 1, except for the employees, health workers and security personnel who will be deployed at the forefront of the fight against Corona.