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Kathmandu Saturday May 05, 2001 Baishakh 22, 2058.
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Next budget to
touch Rs 100b mark: Dr Mahat
Post Report
KATHMANDU, May 4 - Finance Minister Dr Ram
Sharan Mahat today hinted that the forthcoming budget for the fiscal year 2001/02 could
touch a Rs 100 billion mark.
Speaking at a Pre-budget Discussion on Agenda
for Forthcoming Budget, organized by Management Association of Nepal (MAN), FM Mahat said
Rs 3 billion short of salary hiked last year, debt servicing and growing regular
expenditure would inflate the forthcoming budget.
In order to mitigate the formidable growth of
regular expenditure, the government is going to present a new income tax bill in the
parliament and if passed, it would be a cornerstone in the tax reform. The government is
ready even to take unpopular decision to contain the soaring expense, he said.
The FM also expressed worry over the
sustainability of the current GDP growth rate as it is an agriculture- and export-led
growth. Agriculture sector contributes 40 to the gross domestic product (GDP).
"Agricultural production is unpredictable and export of carpet, garment and pashmina
is on the wane. Therefore, it is big challenge for us," said Dr Mahat.
He also said that there has been duplication
of work in poverty alleviation program, wasting scarce resources and time. There are 19
target-oriented government run poverty alleviation programs with same modality and there
are even 3-4 programs in one place. "This is too much. Efforts are on to bring all
these programs under one umbrella," he said.
FM Mahat said that the labor displacement
trend seen in the industrial sector has raised a serious concern and the time for
industrialists, unionists and laborers for their soul-searching has come. Efforts should
be made by the government and all political parties to bring in new labour-intensive
industries to address the problem, he added.
Earlier, presenting a paper on forthcoming
budget, Satyandra Pyara Shrestha, former governor of Nepal Rastra Bank (NRB), suggested to
reduce tariff rates, control smuggling and bring down VAT threshold for effective
implementation of value added tax (VAT).
He also recommended to strike a deal with
People’s Bank of China and the NRB to regulate Nepal-Tibet trade and to impose
protective tariffs on the import of tea and coffee.
Dr Minendra P Rijal, an economist, suggested
the government to expedite the privatization of 39 state-owned enterprises (SOEs) which
are consuming Rs 2 billion every year from the national exchequer.
Stating that the salary hiked in the last
budget speech was a wrong step, he asked the government to introduce industrial
perspective plan. Stressing on the promotion of agricultural sector, he said that
accelerating the agricultural growth reduces poverty directly by raising employment and
income from this sector and indirectly by stimulating demand for goods and services
produced by small and medium enterprises.
Dr Yuba Raj Khatiwada, President of MAN,
pointed out the need to change the policy on chemical fertilizer and cross-budget
agricultural sector from higher education budget.
He emphasized on reviewing tax on information
technology (IT)-related industries as it could be a catalyst in enhancing economic growth
and convince donor agencies towards protecting the agricultural sector.
Madan Dahal and Roop Jyoti commented on the
papers.
On the occasion, FM Mahat also gave away momento
and certificate of MAN Outstanding Award to Prabhakar Shumsher Rana, Chairman of Soaltee
Group Pvt Ltd.
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