Govt unveils Rs 1.532 trillion budget for FY 2019/20


By Modnath Dhakal

Kathmandu, May 30: Finance Minister Dr. Yuba Raj Khatiwada on Wednesday unveiled a budget of Rs. 1.532 trillion for the coming Fiscal Year 2019/20 with priority to poverty alleviation, infrastructure development and good governance.

The budget is bigger by 14.3 per cent – Rs. Rs. 217 billion – than the current fiscal, however, he revised it to Rs. 1.199 trillion during the mid-term review of the government income and expenditure. This is the third federal budget and the second of Dr. Khatiwada.
He has given importance to creating welfare state mechanism, increasing national productivity, quality education, health and water supply, accountability and cooperation among the subnational units and private sector.
The Finance Minister has allocated Rs. 957.10 billion, for recurrent expenditure, Rs. 408.05 billion for development expenditure and Rs. 167.86 billion for financial management.
The share of recurrent and capital expenditure and financial management is 62.4 per cent, 26.6 per cent and 11 per cent respectively.
The capital budget is 35 per cent higher than the revised budget of the current fiscal 2018/19.
He aims to mobilise Rs. 981.13 billion revenue and Rs. 58 billion foreign grant to manage source for the expenditure. Remaining about Rs. 494 billion would be managed from foreign loan of Rs. 298.83 billion and domestic loan Rs. 195 billion.
It means the size of budget deficit is bigger than the size of the capital budget which creates challenges for Dr. Khatiwada to manage resources to meet the financial requirement for the next fiscal.
The Finance Minister has project the economic growth of 8.5 per cent in the next fiscal and said to contain the inflation at 6 per cent.
Similarly, the income tax ceiling has increased by Rs. 50,000 to Rs. 400,000 for single person and Rs. 450,000 for married ones.
Total Budget: Rs. 1532.96 billion
Recurrent Budget: Rs. 957.10 billion (62.4 %)
Capital Budget: Rs. 408.05 billion (26.6%)
Financial Management: Rs. 167.86 billion (11%)
Sources of Budget:
Revenue: Rs. 981.13 billion
Foreign Grant: Rs. 58 billion
Foreign Loan: Rs. 298.83 billion
Domestic Loan: Rs. 195 billion
Rs. 464.56 billion for the subnational governments
Finance Minister Dr. Khatiwada has allocated Rs. 55.30 billion to the states and Rs. 89.95 billion to the local bodies as equalisation grant on the basis of the formula recommended by the National Natural Resource and Fiscal Commission.
Similarly, Rs. 44.55 billion to the provinces and Rs. 123.87 billion to local bodies is allocated as the conditional grant.
“While distributing revenue, I have taken the demographics, area, human development index of the provinces and local bodies into account and estimated that about Rs. 130.89 billion to these sub-national governments,” he said.
The money will be deposited to the reserve fund of the respective sub-national government from the divisible fund every month.
Similarly, matching grant of Rs. 10 billion has been allocated for the projects that will be implemented by the provinces and local governments, and Rs. 10 billion is separated for special grant for the subnational governments. The National Planning Commission, the apex planning body in the country, will distribute the funds under matching and special grants.
Priority to infrastructure
The budget has given priority to the infrastructure development which ranges from roads, railways, energy, airports, and education and health facilities.
The budget aims at providing water supply to 92 per cent population by the end of next fiscal. Dr. Khatiwada has allocated Rs. 7.39 billion for the completion of Melamchi Water Supply Project. Detail Project Report (DPR) of the second phase of the project will be completed next year.
“Sunkoshi-Marin Multipurpose Project will be developed as the national pride project and Rs. 2.5 billion is allocated for it. Rani Jamara and Bheri-Babai Diversion and Babai project will be expedited,” she said.
He has allocated budget for the detailed feasibility study of Kali Gandaki-Tinau, Tamor-Chisyang, Madi-Dang, Rapti-Kapilvastu, West Seti-Kailali Pandul diversions and Kankai Multiple Project.
Terai-Madhes Irrigation Project has got Rs. 960 million. Industrial infrastructure development got Rs. 2.87 billion. Dr. Khatiwada has plans to revive sick public enterprises and establish more industries in collaboration with the private sector.
A new Himalayan Green Trekking Trail would be designed to connect Darchula district in the west and Taplejung district in the east and infrastructure building will begin. Rara will be developed as the national tourism destination, said the Minister.
Hydropower has received a major chunk of budget with Budhigandaki Hydropower Project getting Rs. 13.57 billion, Tanahun Hydel Project Rs. 8.90 billion, Tamakoshi-5 Rs. 1.85 billion and Budhiganga Rs. 2.2 billion.
Increasing connectivity
The East-West Highway would be developed into a dedicated four-lane safe road infrastructure and work at Butwal-Narayangadh and Kamala-Kanchanpur section will start from the next fiscal while the feasibility study would be completed

in other sections of the road. Rs. 19.18 billion is allocated for this road.
Dr. Khatiwada said that he had plans to connect every state by at least two national highways. About 435 km of Mid-Hill Highway will be blacktopped with Rs. 12.20 billion and 350 km of Postal Highway in Terai will be blacktopped with Rs. 13.63 billion.
Similarly, Rs. 5.6 billion is separated for Mechi, Koshi, Kali Gandaki and Karnali Corridor. Madan Bhandari Highway has got Rs. 4.82 billion.
Galchhi-Trishuli-Betrawati-Mailung road, the second highway to connect the northern border Rasuwagadhi, will be blacktopped and Rs. 1.58 billion has been allocated for the road. Likewise, priority will be given to the Swarna Sagarmatha Greater Ring Road and Simikot-Hilsa road.
Dr. Khatiwada has allocated Rs. 1.81 billion for the Kathmandu Ring Road expansion and announced that tunnel would be constructed in Tinkune-Koteshwor-Jadibuti, under pass in New Baneshwor and flyover in Tripureshwor-Maitighar section.
Similarly, Rs. 7.70 billion is allocated for rail, metro and mono-rail. Cross-border railway development will be given priority.
Social welfare in priority
The government has allocated Rs. 64.50 billion for social security programmes. Senior Citizen Allowance is increased by Rs. 1,000 which reached Rs. 3,000. About 1.3 million senior citizens will be benefitted from the increased allowance.
Likewise, allowance for the disabled, single women, endangered ethnicities is also increased by Rs. 1,000.
Finance Minister Dr. Khatiwada has increased the insured money for the senior citizens to Rs. 100,000 and family health insurance scheme’s coverage has also been increased to Rs. 100,000.

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