Kathmandu, May 31: Finance Minister Mahesh Acharya asserted that the shortfall of 12.5 billion rupees in the budget estimates of the fiscal year 2000-2001 would be met with the internal revenue mobilisation by making revenue administration more effective. Besides, mobilisation of foreign aid could be another vital source to manage this shortfall. However, cautious measures are necessary, said Minister Acharya while addressing a budget discussion programme.
The budget has focused on various areas in order to expedite economic growth to maintain macro-economic stability, social equity and institutional reforms, Minister Acharya said. There is a possibility of obtaining almost seven per cent economic growth rate in the fiscal year 2000-2001 for which substantial improvements would be made in agriculture and irrigation, and more facilities would be provided to small irrigation. On top of that special priority will be accorded to promote industry as well as foreign trade. In order to achieve that level of economic growth the provision of downward adjustment has been made, he said adding that measures to control illegal trade would help in curb illegal trade which ultimately will increase the revenue.
Regarding the measures taken in the budget to maintain macro economic stability, Minister Acharya catagorically stated that necessary initiatives would be taken to control the inflationary pressure of the injected money in the industry and business sectors. Nepal Rastra Bank will detect the inflationary pressure in the market, said Acharya and indicated that there is ‘no slippage in the macro economy.’
From the point of view of social equality this budget, according the Minister, is inclined to achieve broad based growth.
Institutional reforms is another key target of the budget estimates. “We are at crossroads now” Minister said “ the budget has laid adequate priority to make the administrative system more effective and result oriented.” This time the budget has aimed to build institutional capacity in order to collect more revenue and maintain macro economic stability and social equity. In fact the government should not be understood as an institution that provides employment. Rather, the private sector should be mobilized to generate economic activities.
However, the target set by the budget is full of challenges. Of course the government cannot be a lone player. The role of private sector to achieve our economic goal is equally important, he said.
‘In the budget I have proposed to bring several economic activities within the tax bracket including that of export and dividend. This however will have positive impacts in the revenue sector.’ Besides, the tax provisions have been further simplified, Minister Acharya asserted.
Regarding the increment of the budget in the security head, he said “ It is essential to maintain peace without which country’s development is not possible.”
Replying to queries about the gap between proposed and revised estimates in the current Fiscal Year’s budget, he said that implementation aspects of the projects had been the main reason of the gap.
Asked whether the substantial rise in the salary of civil servants would create inflation in the market, he said “Technically there isn’t any possibility of price hike in the market. It is just a psychological impression. The inflation is not likely to exceed five per cent.” Acharya told the participants of the budget discussion organised by the Reporters’ Club.