Friday, May 31, 2013

Budget to target six per cent growth

The government is projecting a growth of six per cent in the budget for the next fiscal year 2013-14.
Addressing a pre-budget interaction organised by Management Association of Nepal (MAN) here, today, finance minister Shankar Koirala said that the budget will focus on higher economic growth and inclusive development. "The budget will also try to protect the private sector's investment," he said, adding that the government and private sector are the key players, though the private sector could be further bifurcated to cooperatives or other sectors. "Through the budget the government will help create an investment friendly environment to encourage the private sector to invest."
However, the private sector has limitations and the budget will concentrate on five priority sectors, the finance minister said.
"Energy, infrastructure, agriculture, tourism, and import substitution and export promotion will be key focus areas in the fiscal policy that will have non-controversial and non-political programmes," the former bureaucrat turned minister said, elaborating that generation of energy — with government incentives — and construction of transmission lines will get first priority in the budget.
"Likewise, infrastructure that is a key bottleneck for economic development that has never been a national priority agenda in the country, will get second priority and commercialisation of agriculture along with a focus on livestock and fertiliser production that will increase the contribution of the agriculture sector to the gross domestic product will get third priority, whereas import substitution and export promotion will help industrialisation," he added.
Unlike earlier ones, next fiscal year's budget will not be distributive, said finance secretary Shanta Raj Subedi. "The budget will focus on capital formation and sectors like infrastructure that will give returns in the long run," he said, adding that the government's recurrent expenditure has been increasing in such a way that revenue might not be able to meet administrative and regular salary expenses, though revenue mobilisation has been encouraging as it increased by more than 23 per cent — without changing tax rates — compared to last fiscal year.
President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Suraj Vaidya suggested the government to bring a productive budget that can create employment in the country. "Nepali youths should be involved in the construction of stadiums and airports in Nepal rather than in Qatar and Hong Kong," he said, adding that the budget should reverse the trend of increasing unemployment.
However, senior economist Tula Raj Basyal suggested the government to enhance the capacity of the public sector for effective management of the fiscal policy.
Presenting a paper on the private sector's expectations from the budget, managing director of Jyoti Group Saurabh Jyoti asked the government to involve the private sector in infrastructure projects under Public Private Partnership (PPP) model or Build-Own-Operate-and Transfer (BOOT). "The budget should provide incentives to the private sector to generate hydropower, help land acquisition, promote 'One district one product' programme, reform tax laws to encourage industrialisation, simplify customs and increase skills of foreign job aspirants in association with the private sector," he said, adding that the budget should be private sector friendly as it is the backbone for economic growth.
On the occasion, the finance minister also gave away the Manager of the Year Award to chief executive of Music Nepal Santosh Sharma and chief executive of Shtrii-Shakti Indira Maiya Shrestha.
Salary hike !
KATHMANDU: The government has given an assurance to increase the salary of civil servants. During an interaction with civil servant associations at the Finance Ministry, on Friday, finance minister Shankar Koirala said that the government will increase the salary of civil servants in the budget. He, however, said that the salary will be revised, according to the capacity of the budget. But the civil servants have asked for a 100 per cent hike in salary based on household survey of the central bank because there has been no increase in salary in the last three years.

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