HEADLINE NEWS THE RISING NEPAL (DAILY)

Deuba presents Rs. 96.12 B budget
Poverty reduction, security receive top priority

By A Staff Reporter

Kathmandu, 8 July: Prime Minister Sher Bahadur Deuba today unveiled an estimated budget of Rs. 96.12 billion for the fiscal year 2002-2003 that has laid major emphasis on poverty reduction, improving security and revamping the economy that has recorded the lowest growth rate of 0.8 per cent since 1990.

The budget was brought through an ordinance for the fourth time after the restoration of multi-party democracy in 1990. The budget has shrunk by Rs. 3 billion compared to the previous year.
The budget has made provision for the effective implementation of mid-term expenditure on prioritised development projects to achieve the set economic goals.

Out of the total budget of Rs. 96.12 billion, Rs. 57.45 has been allocated for regular expenditure and Rs. 38.68 billion for development.

The regular expenditure has gone up by 16.9 per cent while the development expenditure has increased by 16.3 per cent, with the total expenditure increasing by 16.7 per cent.

General expenditure has increased by 16.5 per cent, but the development expenditure has plummeted by 23.4 per cent compared to the previous budget.

The total volume of the budget has declined by 3.7 per cent. The budget deficit for the coming fiscal year is Rs. 3.86 billion. The government has plans to raise internal loans worth Rs. 12 billion and foreign aid worth 14.56 billion rupees.

Adequate budget has been earmarked to equip and mobilise the security bodies for the maintenance of peace and security.

Prime Minister Sher Bahadur Deuba said it is the primary responsibility of the government to protect the lives and property of the people and to maintain peace and security in the country.

"At a time when the Maoists are perpetrating violence, terror and killings in the country, the government must earn the confidence of the people through a reliable security mechanism," the Prime Minister said.

"That is why," Prime Minister Deuba said, "our first priority is security."

Dwelling on the challenges of the economy, Deuba said 38 per cent of the people still live below the poverty line, down from 42 per cent at the beginning of the Ninth Plan. "However, the poverty alleviation programmes have failed to achieve the targeted goals."

The lack of improvement in the legal, institutional and administrative sectors still pose a hindrance for the development of the private sector. The task of controlling unproductive expenditure and making the development expenditure more result-oriented is equally challenging along with the reconstruction of infrastructure destroyed by the terrorists.

The running of public enterprises that have been financially burdensome is no less challenging. "We have not been able to take ahead the decentralisation programmes in an effective manner to ensure the self-reliance of the local bodies," Deuba said.

Salient features of the budget

o Priority focus on security management
o Budget allocation to finance the upcoming general elections
o Priority programmes to reduce poverty.
o 100,000 Nepali youths to be sent abroad for employment
o Rs. 550 million allocated for the proposed IT Park at Banepa
o Income tax exemption limit for the individual taxpayer increased from Rs. 55,000 to Rs. 65,000 and for the family from Rs. 75,000 to Rs. 85,000.
o Nepal Rastra Bank will arrange for Rs 1.5 billion to revamp sick industries.
o Provision to mark 2003 as Export Year.
o Provision for 10-year multi-entry visas to non-resident Nepalis (NRNs) willing to invest in Nepal.
o Budget for the National Dalit Commission as well as for the disabled and children to ensure social welfare.
o Bonds to be issued to garner resources for Melamchi drinking water project
o Budget for printing, office equipment, newspapers and other services and maintenance slashed by 20 per cent (on this year's allocation). Miscellaneous expenses cut by as much as 50 per cent.
o Government offices, committees and public enterprises banned from procuring vehicles.
o A call center to be established in the Kathmandu Valley to provide tax payers with all kinds of information, advice and consultancy.
o An internal auditing committee represented by experts to be set up for the monitoring and evaluation of internal revenue administration and to check revenue leakage.
o Excise on items hazardous to health such as alcohol and cigarettes slightly increased.
o Customs duty on some goods imported under the DRP from India slightly increased.
o Tax on agricultural imports fixed at 10 per cent.

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