KATHMANDU, Jan 7: Following His Majesty the King’s assent to the Fiscal Ordinance, National Debt Ordinance and Appropriation Ordinance Monday, Finance Minister Dr. Badri Prasad Shrestha today formally revealed the features of the three ordinances and assured that the government was committed for the early revival of the country’s economy.
Minister Shrestha said that the government has been seriously implementing its programmes mentioned in the Economic Reform Package announced earlier. “The economy has started moving towards a positive direction, but we need concerted efforts,” he added.
According to the new ordinance, the regular and development outlays reached Rs. 21.96 billion in the first five months of the current fiscal year (2059-2060). It is 1.2 per cent less than the corresponding period during the previous fiscal year. However, regular expenditure is up by 6.6 per cent due to sharp decline in the development budget.
The budget deficit of Rs 3.74 billion in the first three months of the current fiscal year was borne through internal loans and foreign loans. The rate of revenue generation, according to the new fiscal ordinance, has gone up by 5.1 per cent to Rs. 17.65 billion in the first five months of the fiscal year. The rate of revenue generation during this period last fiscal year was Rs. 16.80 billion. This year, there has been a significant increase in revenue mobilization during this period. It has increased by 7.7 per cent.
Regarding the development budget, the Finance Minister said that the size of the development budget is likely to go up in the days ahead.
Talking about the contents of the ordinances, he said that there had been significant progress in foreign aid disbursement. The World Bank has rated Nepal from a Low Case to a Base Case category. Nepal will, thus, be receiving upto US$ 350 million in assistance per year. Under the Base Case, Nepal used to receive US$ 50 million a year.
Minister Shrestha said that the government has asked the donor agencies for budgetary support. “We hope we will be able to get it,” he added.
He further said that the budgetary allocation had been carried out as per the Medium Term Expenditure Framework (MTEF) so as to give continuity to the programmes introduced by the previous government.
Minister Shrestha categorically said that no new programmes would be introduced in the current fiscal year. However, the government will accord high priority to revive the ailing economy, he said. He also informed that the government was keen to introduce reforms in the tax administration and make fiscal discipline stricter and growth-oriented.
Minister Shrestha also urged all to extend cooperation from their respective sectors to give economy a new lease of life.
Minister also said that the government is in the process of introducing a post clearance audit system and ASYCUDA to make the customs mechanism more effective.
The ordinances have been issued to give continuity to the budget for the fiscal year 2059-2060 that was announced on June 7, 2002 during a period when the House of Representative had been dissolved.
As the legality of the ordinance as per the Constitution of the Kingdom of Nepal expires after six months of being issued, the Council of Ministers had recommended to His Majesty to issue the ordinance Monday.
The then Prime Minister Sher Bahadur Deuba had presented the budget estimate of Rs 96.12 billion. Out of the total budget, Rs 57.44 billion was allocated for regular expenditure and Rs 38.67 billion was allocated for development expenditure.
Out of the total expenditure Rs 54.80 billion was targeted to be raised from revenue sources, Rs 14.56 billion from foreign assistance and Rs 12.41 billion from foreign loans. The amount of deficit was Rs 14.34 billion.