HEADLINE NEWS THE RISING NEPAL (DAILY)

Mahat presents budget estimates of Rs 99.79 B
Govt. to alleviate poverty, strengthen liberal policies

BY A STAFF REPORER

Kathmandu, July 9: Finance Minister Dr. Ram Sharan Mahat today presented the budget of Rs. 99.79 billion for the fiscal year 2058/59 (2001/02) in the joint sitting of the Parliament.

Out of the total budget of 99.79 billion, an amount of Rs. 49.32 (49.4 per cent) billion has been allocated for the regular expenditure and Rs. 50.47 billion (50.6 per cent) for development expenditure.

With the rise of the government’s obligation for meeting administrative expenses and debt servicing, there is the steady increment in the regular expenditure narrowing down the difference between the budget for the regular expenditure and the development expenditure (see the chart Regular - Development Expen diture).

The budget plans to collect Rs. 60.25 billion from revenue mobilisation, up from the revised estimates of Rs. 49.60 billion in the fiscal year 2000/01. Of the total, Rs. 56.54 will be collected from the existing sources and an additional Rs. 3.7 billion will be collected through new, proposed tax schemes and administrative reforms.

The budget envisages an amount of foreign grant of Rs. 14.12 billion of which Rs. 11.83 billion will come from bilateral grants, Rs. 2.25 billion from multilateral grants. And the total deficit is estimated at Rs. 25.42 billion. Of the total deficit, Rs. 16.42 billion will be financed from foreign loans (Rs. 2.68 billion from bilateral and Rs. 13.73 billions from multilateral) and Rs. 9 billion from internal borrowings.

The proposed budget registers a 19.9 per cent rise over the revised budget of the current fiscal year 2000/01 with the regular expenditure and development expenditure growing by 13.5 per cent and 25.9 per cent respectively.

In the regular expenditure, an amount of Rs. 14.11 billion has been earmarked for the payment of domestic and foreign loans and interest, Rs. 10.42 billion in education, Rs. 5.79 billion for both civilian and armed police force, Rs. 4.52 billion for defence, and Rs. 2.22 billion for health.

Likewise, Rs. 311.3 million has been allotted for the local elections to be held next year and Rs. 78.2 million for the distribution of voters’ identity cards.

Of the development expenditure, 37.2 per cent has been set aside for social services and 60 per cent for economic services and the remaining 2.8 per cent for constitutional bodies, general administration and miscellaneous expenses.

The allocation of budget in the social sector is 33.8 per cent more than the current budget. Of this, it is 18.8 per cent more in education, 45.1 per cent more in health, 34.4 per cent more in drinking water, and 33.1 per cent more in local development.

Similarly, the budgetary allocation for economic services is 27.9 per cent more than the current fiscal year. Of this it is 12.8 per cent more in transportation, 17.4 per cent in electricity and 28.8 per cent more in agriculture, irrigation, land reform and survey and forest.

Presenting the income and expenditure estimates for the fourth time since 1990, Finance Minister Dr. Mahat said the major target of the proposed budget is to alleviate poverty by continuing and strengthening the open and liberal economic policies for a robust economy.

For this, Dr. Mahat said, on one hand there is a necessity of maximum utilization of the existing resources to achieve high economic growth and on the other taking the fruit of development and opportunities to the reach of the poor masses, to create opportunities for employment and human resource development and to give a sense of social justice and security to the people.

The major policies to be undertaken to achieve these objectives are to improve investment environment, bring mobility in the finance sector, keep public expenditure within the sustainable limit, give access to the poor people to productive resources and to strengthen good governance and decentralization.

On the revenue collection front, Value Added Tax has been treated as the backbone of mobilisation of the internal resources.

The budget has also decided to give continuity to the policy of disbursing development finance to members of the Parliament.

Evaluating the current economic and financial pointers, Dr. Mahat said that there have been improvements in several economic indicators such as GDP, inflation rate, export and import. "In the first eight months of the current fiscal year, the overall economic growth rate was 5.8 per cent (compared to 6.4 per cent last year) with growth rate in agriculture and non-agriculture sectors recording 4 per cent and 6.9 per cent respectively."

The Finance Minister said investment, which had seen continuing decline in the last three years showed an upward trend last years to reach 24.3 per cent in the last fiscal year. This is estimated to continue this year to reach 25.7 per cent. Similarly, the national saving has also shown an increased trend to reach 16.1 per cent of the total GDP, Dr. Mahat said in his budget speech.

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