Highlights of budget for fiscal year 2023-24

KATHMANDU: The government has unveiled a Rs 1.751 trillion annual budget for the fiscal year 2023–2024.

Recurrent expenses make up 65.20 percent of the total budget at Rs 1.141 trillion, while capital expenses are funded at Rs 302 billion, or 17.25 percent. The budget for financial management is Rs 307 billion.

Finance Minister Prakash Sharan Mahat said that the new budget prioritizes achieving higher economic growth and a dynamic, broad-based, sustainable, and inclusive economy while ensuring a guarantee of security and justice when he presented the budget to the joint session of the federal parliament on Monday.

The government has created the budget for the fiscal year 2023–2024 with the theme “the second phase of economic reform and structural change of the economy” in response to the current economic challenges. “.

As the economy entered a downturn, Finance Minister Mahat emphasized the necessity of taking action to promote growth. According to estimates, Nepal’s economy grew by 5 point 8 percent last year. However, this year’s growth rate is predicted to be only 2 point 16 percent, which is a significant decline due to the current economic difficulties.

Here are some of the major highlights of the new budget:

1. The new budget prioritizes achieving economic growth and quality social development.

2. Budget for the health sector to be increased by Rs 14 billion.

3. Rs 7 billion to be allocated for generating employment opportunities, tourism development, enhancing domestic production, utilizing barren land and promoting small and medium enterprises.

4. TU cricket ground to be developed as an international-level cricket ground.

5. Minimum threshold for foreign investment in the Information Technology (IT) sector to be removed.

6. Rs 1.5 billion budget to be allocated for Chure conservation.

7. Ground-handling fees for foreign airlines operating from Gautam Buddha, Pokhara int’l airports to be reduced

8. Rs 11.96 billion to be allocated for Ministry of Culture, Tourism and Civil Aviation

9. The budget of Ministry of Physical Infrastructure and Transport reduced by Rs 30 billion

10. Provision of extra allowances to government’s employees to be scrapped as a part of austerity measures

11. Government-owned old vehicles to be auctioned within the first six months of FY 2023/24

12. 20 public enterprises and committees to be scrapped as per the recommendation made by the Public Expenditure Review Committee, 2075 BS

13. Rs 1.25 billion to be allocated to develop the startup ecosystem including venture capital and startup businesses.

14. National portal to be launched to provide integrated information about the possible investment areas and sources of fund for start ups

15. Provincial level labs to be established for soil testing

16. Feasibility study to be conducted for marijuana cultivation and its impact on Nepali economy.

17. Government to transfer equalization grant of Rs 146 billion and conditional grants of Rs 227 billion to provincial and local governments

18. Rs 410 million to be allocated to establish industrial villages in 113 local bodies.

19. ‘Nepal ghumau, Nepal chinau’ program to be launched to promote domestic tourism.

20. One hill station each in Koshi, Lumbini and Sudurpaschim provinces to be constructed to promote tourism

21. CAAN to be split into two autonomous entities- regulatory body and the body responsible for developing civil aviation infrastructure.

22. Mulpani cricket ground construction to be completed.

23. Rs 1.98 billion to be allocated to blacktop Karnali Corridor road.

24. Film City Indoor Studio to be made in Dolakha and Banepa.

25. Gwarko flyover construction to be completed.

26. Postal Saving Bank to be abolished.

27. Government to target the production of an additional 900 MW of electricity in the next fiscal year, making the total production capacity to 3,600 MW.

28. Labeling of both importers and distributors to be made mandatory while selling imported goods in the domestic market.

29. Online assessment system to be promoted to implement transaction-based customs clearance system

30. Firms carrying out annual transactions of more than Rs 250 million will be incorporated in the central billing system.

31. Only one percent customs duty will be imposed on the machinery imported by the cottage and small industries.

32. Rs 15.56 billion to be allocated for forest and environment sector

33. Budget of Rs 87.45 billion allocated for the Ministry of Energy, Water Resources and Irrigation

34. Government to provide electricity access to cent percent populations in the next two years.

35. Monasteries that are more than 100 years old to be preserved.

36. Master plan for development of Pashupati Area to be implemented.

37. Government to issue remittance bonds targeting Nepalis who are in foreign employment by taking work permits.

38. Government-owned banks and financial institutions to be restructured.

39. Rs 157 billion to be allocated for social security programs.

40. Budget revives the controversial Constituency Development Program and allocates Rs 50 million for each of 165 constituencies under the program.

41. Old age allowance to be kept unchanged at Rs 4,000 monthly.

42. Provisions made to facilitate the registration of a new company without incurring any charges.

43. Indigenous products to be promoted with the labels ‘Made in Nepal’ and ‘Make in Nepal’.

44. Economic growth rate of six percent to be achieved in the next fiscal year. The government expects to tame inflation rate at 6.5 percent.

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