May 30: The government has unveiled a budget of Rs 1,279 billion for the next Fiscal Year- 2017/18 beginning in July. Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara presented the budget in the parliament on May 29.

Although new programmes were barred in the budget due to the code of conduct of the ongoing local elections, the budget size has been increased, say economists. The budget has soared by 21 percent or by Rs 230 billion as compared to the budget of the current FY, which is Rs 1,048 billion.  

“The budget has not included new programmes except those necessary for the implementation of the federal structure and continuation of the projects of national pride and strategic importance that are currently under construction, due to the code of conduct of local elections,” said Minister Mahara. 

In the budget, Rs 803.53 billion has been allocated for the current expenditure. The current expenditure which is 58 percent of the total budget has been increased by around 63 percent. The government had allocated Rs 617.16 billion for current expenditure in the current fiscal year.  

Meanwhile, a leader of Nepali Congress and former Finance Minister Dr Ram Sharan Mahat opined that the implementation of the budget will be complicated due to the size of the budget. “There is no room for supplementary budget to be brought after the change in power equation,” he added.

Similarly, Rs 335.17 billion has been allocated for the capital expenditure aimed at economic development, reconstruction and infrastructure development.

Though the size of the capital expenditure has increased, its share has decreased in ratio with the total budget. Capital expenditure of Rs 311.94 billion or 29 percent of the budget was allocated in the current FY. As the capital budget size has increased by Rs 23.23 billion, it is only 26.2 percent of the total budget. 

Likewise, the government has allocated Rs 140 billion in financial management for the next fiscal year, which is 11 percent of the total budget. While the government had also allocated 11 percent of the budget in finance management in the current FY, the amount was only Rs 119.81 billion.

Mahara stated that financial management expenditure is higher by 21.9 percent as compared to the current FY budget and 36.6 percent higher as compared to the revised estimate.

The fund for the budget will be raised through revenue of Rs 730.05 billion, Rs 15 billion through return of interests and Rs 72.16 billion through foreign grant.

There will be a budget deficit of Rs 461 billion and the government has planned to manage the amount through foreign credit of Rs. 214 billion as well as from internal loans, investments and other means.