July 14 2015 | The Himalayan Times
Finance Minister Ram Sharan Mahat is expected to unveil an expansionary budget of around Rs 820 billion to Rs 825 billion for Fiscal Year 2015-16 tomorrow at Parliament, laying special focus on reconstruction of structures damaged by earthquakes of April and May. Prime Minister Sushil Koirala, accompanied by Minister Mahat, on Monday briefed about the government’s expenditure plan for the next fiscal to President Ram Baran Yadav. This budget document will now have to be endorsed by the Cabinet before it is presented at Parliament. The budget for the next fiscal is lower than the budget ceiling of Rs 841.21 billion set earlier by the National Planning Commission, but 33 per cent higher than the allocation of Rs 618.10 billion made this fiscal year.
The govt is expected to earmark around Rs 85 billion to Rs 90 billion for rehabilitation and reconstruction activities in the next fiscal However, allocation for recurrent expenditure, such as salary payment of civil servants, grants to local bodies and interest payment, capital expenditure, such as spending on civil works and purchase of land, building, furniture, vehicles, plants and machinery, and financing provision, such as lending to state-owned enterprises and principal repayment, are not known. In the current fiscal year, Rs 398.95 billion was earmarked for recurrent expenditure, Rs 116.75 billion for capital expenditure, and Rs 102.39 billion for financing provisions.
To fund all the public expenses in the next fiscal, the government is expected to set a target of mobilising around Rs 478 billion from tax and non-tax revenue and around Rs 85 billion through internal borrowing, a reliable source told THT. In total, the government is expected to set a target of mobilising over Rs 600 billion from internal sources to finance various costs, the source added. This amount also includes carryover from this fiscal’s budget and principal repayment made by various state-owned enterprises. The remaining expenses would be met through foreign loans and grants.
One of the centrepieces of next fiscal’s budget is expected to be government’s plans for rehabilitation and reconstruction in the aftermath of the quakes. These plans are expected to include building back structures damaged by quakes and restoration of productive means of livelihoods for people who lost assets and income sources to tremors. In this regard, the government is expected to earmark around Rs 85 billion to Rs 90 billion for rehabilitation and reconstruction activities in the next fiscal, the source said. This fund will be deposited in the Reconstruction Fund created by the government.
Also, the budget will focus on consolidation of existing social security provisions. “This includes greater allocation of funds for scholarships for disadvantaged population and increment in medical allowance for the elderly,” the source said, adding, “Adequate funds have also been allocated for ongoing physical infrastructure projects.” Among others, continuity is expected to be given to policies and programmes of the past, which include development of energy sector and physical infrastructure, commercialisation of agriculture, industrial development, tourism promotion, jobs creation and social sector development.