Budget: Mahat is a dreamer

The government unveiled Rs 168.99 billion budget on Thursday. It is higher by 17.4 per cent as compared to the budget for fiscal year 2006-07 and 28.2 per cent higher than the revised estimate for the same period.
The budget, for the fiscal year 2007-08, presented by the finance minister Dr Ram Sharan Mahat at the interim legislature parliament on Thursday, has been scripted in the backdrop of November 22 Constituent Assembly poll, and its no wonder that its more a political document than an economical one.
The budget has kept tax rates stable on most of the items except cigarettes and liquors, which is the usual practise.
It is not surely a visionary budget, as it has a lots of constraints. It is shaped in line with the common minimum agenda (CMG) of eight-political parties. The budget devoted Rs 28.39 billion to the education sector, higher than last year’s Rs 17 billion but received less applause.
The budget seems to have focused on agricultural development also.
Some called it balanced and others feel let down, and yet others term it ‘over ambitious’ and big. However, the budget in a whole falls short of the larger picture within which the government should try and address the concern of the common people and ailing industries.
What’s good for Nepal in the long run, is good for the capital market also. Thus, the finance minister has tried to continue to appease the private sector especially to the capital market.
The government has also targeted to produce 5000MW of electricity within five years. It has planned to woo internal and external investment for hydro power generation.


Budget 2007-08
Total budget Rs 168.99 billion
Recurrent expenditure Rs 98.17 billion
Capital expenditure Rs 55.26 billion
Net budget deficit of Rs 20.5 Billion.

Target
GDP growth rate 5pc
Inflation at 5pc
Rs 99.60 billion revenue
Rs 27.46 billion foreign grant
Rs 17.36 billion foreign loan

Sectoral allocations
Rs 28.39 billion for education
Rs 12.18 billion for health
Rs 10.89 billion for defence
Rs 9.56 billion for police forces
Rs 13.8 billion for local development
Rs 5.82 billion for agriculture
Rs 7.65 billion for hydropower
Rs 3.5 billion for Constituent Assembly polls
Rs 9.34 billion for roads

International Airport to be constructed at Nijgarh, Bara
Infrastructure Development Bank to be set up
Two cement factories to be set up in Dang, Surkhet
New Tourism Policy-2007 to be formulated