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Key Highlights of Nepal Budget for FY 2080/81
The Minister of Finance Dr. Prakash Sharan Mahat disclosed a budget of 1751.31 billion Nepalese Rupees for the fiscal year (FY) 2080/81 during a parliamentary address on the 29th of May, 2023. Out of the total government budget 65.2 percent has been allocated for current expenditure, 17.25 percent for capital expenditure and finally 17.55 percent for fiscal management.
The expenditure for the upcoming fiscal year will be met by 1248.62 billion from revenue collection, 49.94 billion from foreign grants and remaining 452.75 billion will be generated from internal and international debt.
The prioritized sectors of the National Budget of Nepal FY 2080/81 are agriculture, tourism and economic development. Although the tourism and agriculture sectors are set as priorities, budget allocation for these sectors have remained low making the overall notion of economic development through development in tourism and agriculture questionable.
Similarly the budget also focuses on building a digital and green economy. Furthermore, the economic development and social development is also prioritized by the budget. Special provisions have been made for infrastructure development including mega projects such as Nijgadh-Kathmandu fast track, Butwal-Narayangarh road completion, Gwarkho Flyover completion, completion of Pokhara-Mugling highway and Karnali corridor road completion.
The budget promises to en-lift employment/entrepreneurship sector and the digital landscape of Nepal and the major decisions to support this is the removal of minimum threshold of foreign investment in the Information Technology (IT) sector. Similarly, NRs. 1.25 billion has been allocated to promote the startup ecosystem through venture capital and investment in startups. The budget also pursues a national portal to provide integrated information about possible investment sectors and the sources of investment for startup businesses in Nepal.
Development of sports infrastructure is also one of the priority areas of the budget this year. The completion of the Mulpani cricket ground and the leveling up of flood lights and other infrastructures in the TU cricket stadium is also envisaged.
In the tourism sector development programs, ground handling fees for international airlines for Gautam Buddha and Pokhara International airports shall be reduced. Rs. 11.96 billion has been allocated to the Ministry of Culture, Tourism and Civil Aviation. ‘Nepal Ghumaun, Nepal Chinaun’ campaign will be launched all over the country to promote domestic tourism. Similarly, a hill station each shall be constructed in Lumbini, Koshi and Sudurpaschim Province to promote tourism activities during the FY 2080/81. The Civil Aviation Authority of Nepal (CAAN) is set to be split into two autonomous entities for regulatory and infrastructure development purposes. A separate Film City Indoor Studio is set to be constructed in Dolakha and Kavre districts to support movies, culture and arts. Add to that priority has been given to indigenous products that will be promoted through ‘Made in Nepal’ and ‘Make in Nepal’ campaign. A budget of NRs. 157 billion has been allocated for social security programs in the FY 2080/81.
The budget of the Ministry of Physical Infrastructure and transport has been reduced this year by thirty billion rupees. In the transport sector, government owned old vehicle shall be auctioned out in the first half of the FY 2080/81. Cash incentives are provisioned for fuel expenditure of government employees and officials. All other extra allowances will be cut down,
In the industrial and energy sector some positive programs are envisioned. The government shall establish industrial villages in 113 local levels in the country. Provincial labs for soil testing and technical assistance shall be established. A feasibility study for marijuana cultivation for medicinal purposes is set to be carried out this fiscal year. For machinery imports in case of small and cottage industry only 1% customs duty shall be levied. In the energy sector programs, the government plans to provide 100% households with electricity supply within this fiscal year. The government plans to increase the electricity production capacity to 3600MW this year. A budget of NRs. 87.45 billion has been allocated to the Ministry of Energy, Water Resources and Irrigation.
In the education sector, NRs. 3.02 billion has been allocated for scholarships at all levels. The continuation of free sanitary pad distribution has been provisioned with a budget of NRs. 1.42 billion which will benefit more than one million girls. Similarly, the government aims to organize CTEVT programs and institutions under the jurisdiction of Provincial mechanism. The government aims to establish a regulatory body to initiate research on radio-active materials. The total budget allocated for the Ministry of Education, Science and Technology for the FY 2080/81 is NRs. 197.29 billion.
The total budget of NRs. 15.56 billion has been allocated for the development of forest and environment sector. NRs. 1.5 billion has been allocated for Chure conservation in this fiscal year. The green economic development is a priority set by the government this year.
In terms of import management, the provision to label both importers and distributors in the imported goods and services has been made mandatory. Online transaction assessment system shall be promoted for customs-clearance. Similarly, firms that carry out transactions of more than NRs. 250 million shall be included in the national billing system.
The budget this fiscal year is more populist in nature and envisions a very broad spectrum of development sectors. However with controversial policy gaps and upheavals in political environment in the country the actual materialization of 6% economic growth rate seems quite farfetched.
