The government has rolled out an ambitious annual budget, putting a strong emphasis on development of major infrastructure projects. The government has allocated adequate funds for the development of various national pride projects. Finance Minister Yubaraj Khatiwada has earmarked a whopping Rs 1.09 trillion for the development of transportation and infrastructure.

The government has allocated resources to complete the detailed feasibility study and initiate construction of the East-West Highway and start projects including Kathmandu-Nijgadh Expressway, Mid-hill Pushpa Lal Highway, Postal Highway. Khatiwada claimed that adequate funds have been allocated to develop infrastructure to connect each province with international trade points. Local bodies in the southern belt and other areas, which are lagging behind in term of infrastructural development, have received a budget worth Rs 3.53 billion under ‘Tarai-Madhesh Road Infrastructure Special Project’.

Similarly, the government has allocated Rs5.24 billion for the construction of strategic bridges connecting areas with tourism potential. For the maintenance and sustainable management of the roads, they will be brought under the Road Board. The government has also raised the board’s budget to Rs5.50 billion.  

The budget also plans to conduct the feasibility study and prepare a detailed project report (DPR) of the Mechi-Mahakali Electric Railway as well as start the construction of other railway projects—Birgunj-Kathmandu, Bardibas-Simara and Rasuwagadhi-Kathmandu-Pokhara-Lumbini—after the completion of the DPR. The feasibility studies will be conducted for operating waterways in the Koshi, Gandaki and Karnali rivers, Khatiwada said.   

For all the government’s tall promises on infrastructural development, experts harbour doubts over its ability to deliver goods given its previous track record. They say the implementation remains a huge challenge for the government as there has been no substantial change in the spending process and preparations in case of large infrastructural projects. “On the implementation front, there is not much substance except for assurances,” said economist Chandan Sapkota.

Infrastructure expert Surya Raj Acharya said the budget allocation in the infrastructure sector is continuity to the past and it does not guarantee the implementation. “Lack of adequate budget has never been an issue in the area of infrastructure development. It is the implementation part that has hindered our infrastructural development,” noted Acharya. “But the budget has remained silent on the measures the government will adopt to spend the funds allocated for the various infrastructure projects.”

The government failed to introduce concrete programmes to ensure the implementation of the large infrastructure projects, although the government through this budget is planning to establish the prime minister-led project implementation directive committee.

Budget 2018-19 at a glance

• Government decides to build 750MW West Seti Hydropower Project on its own
• Announces 2018 to 2028 as energy and water resources decade
• Supply modern energy to every household across Nepal in three years
• Meet all households’ electricity demand within five years
• Implement hydro project up to 3,000MW through investment from the general public
• Rs5 billion allocated for rural electrification
• Food grain output will be doubled to 20 million tonnes in five years
• Set up model agriculture farms in all seven provinces
• To provide subsidies to sugarcane farmers based on their production
• Establish an agricultural tools and machinery company to boost farm mechanisation
• Continue the minimum support price fixing policy in the next fiscal year
• Table a Land Use Bill at the ongoing budget session of Parliament
• Government will introduce laws to stop plotting of irrigated land    
• Provide irrigation for all agricultural land within five years
• Rs350 million to execute solar irrigation
• Install weather radar stations in Palpa and Udayapur
• Policy tools to protect domestic industries
• Income tax slab revised from 15 percent and 25 percent to 10, 20 and 30 percent
• Taxable income over Rs2 million will be charged 20 percent extra
• Scraps existing system of taxpayers enjoying tax return
• Earmarked whopping Rs 1.09 trillion for the development of transportation and infrastructure
• Rs5.24 billion for the construction of strategic bridges connecting areas with tourism potential
• Feasibility study to operate water ways in Koshi, Gandaki and Karnali rivers will also be concluded
• 2 million foreign tourists by 2020