Govt announces Rs 127 billion annual budget
Finance Minister Madhukar Shumsher JB Rana Saturday
announced an annual budget of nearly Rs.127 billion (Rs.126.and
885.1 million) for the fiscal year 2005/6, massively increasing
the security expenditure.
Rs.75 billion has been set aside for the regular
expenditure while the development budget stands at Rs 52 billion.
A deficit of nearly Rs.16 billion will be financed by increased
taxes and by mobilizing internal and foreign loans and grants,
the Finance Minister stated, presenting his financial estimate
for FY 2005/6 amid a function attended by government officials
and media personnel at the National Planning Commission auditorium.
“Out of the total amount Rs.126 billion and 885.1 million
allocated for expenditure, Rs.77 billion and 760 million will
be mobilized from the existing sources of revenue, Rs.18 billion
and 687 million will be financed from foreign grants. Rs.14 billion
and 530 million will be covered from foreign loans and there will
be a deficit of Rs.15 billion and 906 million,” the minister
stated.
Rs.18.4 billion has been earmarked for security expenditure of which Rs.10.9 billion will go into defense purposes while Rs.7.5 billion has been set aside for the police forces including the Armed Police Force (APF). This year’s security budget is up by 26 percent as compared to last year’s.
“Increased allocation for security is the priority of the budget,” the Finance Minister said and added that the annual budget was based on the 21-point program stated in the Royal Proclamation, emphasizing the targets of the 10th plan, mainly that of poverty alleviation.
Similarly, Rs.7.68 billion has been earmarked for the health sector, increasing the sum by 51.15 percent from last year’s allocations. The government will start work on a regional hospital in Surkhet within this fiscal year, minister Rana announced.
The education budget for the FY 2005/6 stands at Rs.21.05 billion, higher by 31.26 percent as compared to last year’s. Of this amount, Rs.860 million will be spent on education scholarships for students coming from poor and backward communities.
Likewise, the government has earmarked Rs.2.69 billion for the
construction of the 70-megawatt Middle Marsyangdi Hydropower Project,
the only major power plant under construction at present, while
Rs.1.52 billion will be spent on the construction of the Melamchi
Drinking Water Project.
The Finance Minister announced Rs.3.81 billion for the overall agriculture sector which is higher by 61.71 percent than the revised estimate of FY 2004/5.
In order to improve access of the landless farmers to land, the Land Bank will be established under which employment and housing programs will be carried out. Rs.790 million will go for land reform programs during FY 2005/6.
Although no provisions have been made in the budget for raises
in salaries of civil servants, 20 percent bonus increased last
year will be included in the monthly salary from this fiscal year.
The income tax ceiling of family earning has been fixed at Rs.125,000
from the previous Rs.100,000.
Customs duty has been reduced by 8 to 10 percent on export of goods
like vegetable ghee, plastic goods, textured yarn and iron pipe
while VAT has been exempted on perched rice, tea chest, pacemakers
to be used in heart treatment, heart valve and silver goods.
Minister Rana said “necessary allocation has been made”
for local elections scheduled to be held this year. He said the
government “will try its best to expand and enlarge the
development space by using the alternative mechanism as per the
needs of the people”.
“I assure the donor communities and the INGOs collaborating
with the government in its development and poverty reduction efforts
that the Basic Operating Guidelines will be sincerely honoured
in order to facilitate the implementation of development programs,”
he said.
The government, according to him, is making every effort to prevent human rights violations. “Human Rights action plan will be implemented more effectively for the protection and promotion of human rights.”
As per Nepali calendar, the new Nepali fiscal year (2062-63 B.
S.) begins from today -1st of Srawan.
nepalnews.com
pd/mbk July 16 05
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