Finance Minister Yubaraj Khatiwada on Thursday announced a Rs1.47 trillion budget estimate for the fiscal year 2020-21.

This is 4 percent less compared to the current fiscal year budget of Rs 1.53 trillion.

The budget plans to bet on achieving the higher economic growth target of 7 percent despite economic uncertainty driven by the Covid-19 pandemic that has pushed many companies to the edge of bankruptcy this fiscal year and likely to continue in the next fiscal year as well.

According to Khatiwada, the source of financing will be Rs889.62 billion from revenue, Rs60.52 billion from foreign grants, Rs 299.5 billion from external loans, and Rs 225 billion from internal loans.

The government has allocated Rs352.91 billion for capital expenditure, Rs948.94 billion for recurrent expenditure, and Rs172.79 billion for financing.

The biggest increase for the upcoming fiscal year’s budget is in the health sector, given the Covid-19 pandemic.

The government has raised the budget for the health sector to Rs 90.69 billion from Rs68.78 billion for the current fiscal year, an increase by 32 percent.

Khatiwada said that the government has allocated Rs 6 billion for medicines and equipment as well as treatment to control the spread of Covid-19.

“Focus will also be on expanding tests in high-risk areas to prevent the further spread of the coronavirus,” he added.

An increase in the budget for the health sector was largely expected given the spread of the virus, which has claimed five lives and infected over 1,000 in the country.

Khatiwada said high priority will be given to the prevention and control of coronavirus pandemic and infectious diseases.

Khatiwada also said that the government has allocated a budget for building 200 hospitals with 5 to 15 beds at all local levels.

“Health insurance will be provided to all citizens in three years and 40 percent of the population will be brought under insurance next year,” said Khatiwada. “Rs7.5 billion has been allocated for this programme.”

Similarly, the government has also doubled the allowance for women health workers.

Khatiwada said arrangements have been made to provide incentives and allowances to the doctors involved in the treatment of Covid-19 and those working in the laboratories.

He also announced free health insurance up to Rs500,000 for the health workers involved in the treatment of Covid-19 and other infectious diseases.

“Budget has been also allocated for the construction of a 300-bed communicable disease hospital in the Kathmandu valley,” said Khatiwada. “Similarly, 250-bed ICU hospitals and 50-bed communicable disease hospitals will be operated in all provincial capitals.”

According to Khatiwada, Gandaki of Pokhara, Koshi Hospital of Biratnagar, Bheri Hospital of Nepalgunj, Surkhet Hospital of Surkhet and Seti Hospital of Kailali will be converted into hospitals with specialty services.