Govt. earmarks 286b budget

The CPN-UML led government has earmarked a budget of Rs. Rs 285.93 billion for the fiscal year 2009-10 on Monday. Of the total expenditure, Rs.135.58 billion (47.42 percent) has been allocated for general administration and Rs. 150 billion and 347.5 million (52.58 percent) for development related expenses.

Out of the estimated sources of financing, Rs. 161.73 billion will be borne from the current source of revenue. Out of the total foreign assistance of Rs. 78.51 billion, Rs. 56.95 billion will be borne by foreign grants and Rs.21.56 billion by foreign loans. The budget deficit has been estimated to be around Rs. 46.34 billion even after mobilizing these sources.

The budget projects 5.5 percent Gross Domestic Product at the end of the fiscal year 2009/10. The growth rate in agriculture sector is expected to be at 3.3 percent and the non-agriculture sector at 6.6 percent. The government aims to reduce the inflation rate to 7 percent. The inflation rate crossed 13 in the current fiscal year.

The government has allocated Rs 46.5 billion to education sector and Rs 18.67 billion to health sector , Rs 25.24 billion for local development, Rs 8.06 billion for agriculture and Rs 7.95 billion irrigation. Similarly, road and air transportation sector received Rs. 19.75 billion.

The government has earmarked Rs. 2.11 billion for post-conflict development and reconstruction. Under this programme, construction of 260 kilometers of road and construction of 40 bridges will be started; 96 suspension bridges and 104 small infrastructures will be constructed; and 80 drinking water projects will be completed.

Likewise, Rs. 1.3 billion will be spent for relief, land development and rehabilitation of the victims of the floods in Koshi and Far and Middle West.

Presenting the budget at the legislative-parliament, Minister for Finance Surendra Pandey said that the poverty alleviation programme currently being operated targeting at the socially and economically backward community and households below poverty will be expanded to all the districts. For this, Rs. 2.72 billion has been allocated for this programme.

The new budget aims at promoting private sector investment and make the market competitive. A high-level Investment Board headed by the Prime Minister would be formed to attract national and foreign private investment on major infrastructure projects.

In the budget, now it is not mandatory to reveal income source for manufacturing industries using more than 50 percent indigenous raw materials, employing more than 300 national workers or those of national importance such as hydro electricity projects, international airports, tunnel ways, road ways or railways until mid April, 2019. Likewise, excise duty on items produced by using more than 90 percent domestic scraps has been waived. Similarly, arrangement has been made for compulsory collection of VAT on the construction of buildings, apartments or shopping complexes for commercial purposes exceeding the value of Rs. 5 million. The local development tax has been annulled.

Likewise, income tax ceiling for individuals has been raised to Rs. 160,000 from Rs. 115,000 and Rs. 200,000 for married couples from the current Rs. 140,000. Capital gain tax is has been reduced from 15 percent to 10 percent while eighty percent duty on milk tanker has been exempted while the prevailing customs duty has been reduced to 30 percent from 40 percent.

Rs 2.11 billion has been earmarked for the construction of 6.5 kilometer of main works out of 26.50 kilometer tunnel construction under Melamchi Drinking Water Project. Likewise, the government has given continuity to the waiver of license for up to 3 MW and waivers of detailed environment impact assessment for up to 50 MW.

Similarly, waivers on environment impact license will be provided for the construction of extension lines under the action plan of National Energy Crisis Mitigation. Similarly, no environment impact assessment will be required for the construction of extension line that occupies less than 5 hector of forest area. A total of Rs. 1 billion 570 million has been earmarked for community and rural electrification programme. Self Employment Scheme introduced by the erstwhile Maoist-led government has been given continuity by the new government.