Priorities Of Budget

With the date for unveiling its annual budget for the next fiscal year (2023-24) nearing, the federal government is geared up for drafting the document. The Constitution of Nepal, 2015 authorises the government to present its budget proposal in a joint session of federal parliament on Jestha 15 (May 29) every year. Various economic indicators that have hinted at a tricky situation in the country include a protracted liquidity crisis in banks and financial institutions (BFIs), decreasing level of investments, low rate of capital spending and growing unemployment problem. A drastic fall in revenue collection is another major challenge facing the nation. The economic growth is projected to be confined to only 2.16 per cent for the current fiscal year (2022/23), according to the National Statistics Office (NSO). The data prepared by NSO based on the actual calculation of the third quarter and the projected economic activities of the fourth quarter indicated this. Earlier, the government had set an ambitious target of 8 per cent economic growth for this fiscal year. The nation's key donors -- the World Bank (WB) and Asian Development Bank (ADB) -- had also estimated an average growth rate of 4.1 per cent.

The NSO stated that the overall economic growth rate is anticipated to remain affected because of substantial decline in construction and mining sectors. The size of the national economy is projected to have reached Rs. 5.38 trillion in 2022-23. The NSO has also projected that the nation's economic growth rate in the current fiscal year will reach 1.16 per cent in consumer prices and 2.16 per cent in basic prices. In such an adverse situation, the government is required to work carefully on its policy document as well as budget in order to bring the national economy back on track by addressing all the challenges and problems. Finance Minister Dr. Prakash Sharan Mahat on Sunday presented the principles and priorities of the appropriation bill in the parliament. The main principles and priorities, as proposed by Dr. Mahat, include achieving sustainable, extensive and inclusive economic growth and stability, social sector development and social justice, enhancement of morale of the private sector and creation of more investment-friendly environment and simplification of legal processes. 

In addition, establishing good governance, improving service delivery and ensuring zero tolerance on corruption, prioritising agriculture, industries, infrastructure projects and education are also in the government's priority. Similarly, the Finance Minister has proposed prioritising sectors having comparative advantage like agriculture, information technology and hydropower, and development of export-oriented products and services with competitive edge. He has also proposed making grants for provinces and local levels more systematic so as to enhance efficiency of fiscal federalism. The government plans to accord priority to the projects yielding benefits immediately to more populace and make sure that budget is allocated for national pride projects. The parliament is to discuss the matter extensively in order to help prepare a more practical budget for dealing with all the economic problems in a more effective manner.

Meanwhile, Prime Minister Pushpa Kamal Dahal Prachanda said the country was capable of finding long-term solutions to the multiple economic glitches. Addressing Nepal Business Summit-2023, which was jointly organised by the Ministry of Industry, Commerce and Supplies (MoICS), Confederation of Banks and Financial Institutions, Nepal (CBFIN) and Nepal Business Institute in Kathmandu on Sunday, the Prime Minister called for effective and close cooperation between the government and the private sector to resolve the problems. He has emphasised the need to boost domestic production, substitute imports and increase exports for achieving economic independence and sustained economic growth.