The government has allocated Rs91 billion for reconstruction, keeping the option open for injecting more resources for the purpose. The total capital expenditure is Rs208 billion, almost double the size of the current capital budget.

Given that the total capital budget spending in the current fiscal year remained at just Rs86 billion, the finance minister sees spending all the resources meant for reconstruction as an uphill task.

Mahat also admitted that implementation remains a huge challenge. “The budget of Rs91 billion is not a small amount but there are implementation related concerns,” he said during a post-budget interaction organised by the Finance Ministry.

Delay in filling key positions of the National Reconstruction Authority is likely to hamper the spending capacity for reconstruction. The authority is mandated to “fast-track” the process of land acquisition, procurement and environmental clearance—all of which had posed big challanges in implementing development projects in the past. Complaining about the poor spending capacity of government agencies, Mahat said the government predicted a conservative 6 percent growth rate due to concerns over implementation. The government has nonetheless announced the next fiscal year as ‘Budget Implementation Year’ by announcing measures such as forcing under-performing

projects to surrender their funds to the Finance Ministry and retain project chiefs whose performance remained well above satisfactory. The government has also announced to hire project chiefs from outside government services for national pride projects in order to speed implementation works.

Adressing the programme, Mahat said the government also announced establishing Economic Rehabilitation Fund under the Nepal Rastra Bank to revive industries affected by the earthquake.  The fund is expected to provide refinancing facility and interest subsidy for sectors that include residential homes, agriculture, business and tourism. Previously announced measures such as the loan loss provision, loan rescheduling, additional time for account keeping of income and expenditure, and capital calculation for the earthquake-affected will continue.

According to Mahat, the budget has focused on balanced development by allocating funds based on Madhes-Tarai, Hill and Mountain region and Karnali and Far Western region.