Govt gets leeway to frame budget of Rs1,280 billionThe size of the next fiscal year’s budget can swell to Rs1,280 billion, as greater funds have been allocated for newly-formed local bodies, provincial and federal elections, physical infrastructure projects and post-earthquake reconstruction works.
The size of the next fiscal year’s budget can swell to Rs1,280 billion, as greater funds have been allocated for newly-formed local bodies, provincial and federal elections, physical infrastructure projects and post-earthquake reconstruction works.
The government was given the leeway to come up with an expenditure plan of as high as Rs1,280 billion for the fiscal year 2017-18 after the meeting of the resource committee led by Min Bahadur Shrestha, the vice chairman of the National Planning Commission, on Sunday revised the budget ceiling upwards.
The cap was revised a day before the budget for fiscal year 2017-18 is being presented in Parliament.
The new budget ceiling is 22 percent higher than the actual budget of Rs1,048.9 billion for the current fiscal year.
The resource committee had previously directed the government to cap next fiscal year’s spending at Rs1,206 billion, of which Rs1,156 billion was earmarked for various ministries and another Rs50 billion for purposes like election.
“The ceiling was revised today as more funds will be required to empower newly-formed local bodies, conduct provincial and federal elections, build major infrastructure projects and give continuity to post-earthquake reconstruction works,” a reliable source told the Post, adding, “The budget will not incorporate new policies and programmes [as the Election Commission has prohibited the government from doing so until local level elections scheduled for June 14 are over].”
The budget ceiling was revised based on projection that the government would generate Rs720 billion in revenue in the next fiscal year. The revenue collection target for this fiscal year stood at Rs565.9 billion.
The government is also planning to mobilise around Rs300 billion in foreign grants and loans in the next fiscal year, while domestic borrowing will be limited to 5 percent of the gross domestic product.
Also, funds that have not been utilised this fiscal year and principal repayment are expected to contribute around Rs125 billion to next fiscal year’s spending.
Funds generated from these sources will be spent to expedite implementation and construction of 1,200MW Budhi Gandaki Hydroelectric Project, Nijgad and other international airports, Kathmandu-Tarai expressway, Postal Highway and Mid-hill Highway.
“National pride projects and other physical infrastructure of strategic importance will also receive adequate funds,” the source said, adding, “Around Rs200 to Rs300 billion will also be allocated for local bodies.”
The local bodies, for the first time, are being given complete authority to frame budgetary programmes on their own.
This policy shift was made after the country formally embraced federal setup in March. Currently, the central government has been playing a bigger role in preparing the local level’s budgetary programmes.
Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara on Sunday informed about these expenditure plans for the next fiscal year to President Bidya Devi Bhandari and caretaker Prime Minister Pushpa Kamal Dahal.