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Nepal budget 2020/21: Seven things you should know

Finance Minister Yuba Raj Khatiwada reads out the annual budget plan for fiscal year 2020/21, in Kathmandu, on Thursday, May 28, 2020.

Kathmandu, May 28

Finance Minister Yuba Raj Katiwada on Thursday presented the annual budget plan for the next fiscal year 2020/21. The budget plan, which has a total size of Rs 1.474 trillion, has many ambitious programmes whereas it also repeats some unimplemented programmes from past years.

As the country has been hard hit by the global Covid-19 crisis, the government has allocated big sums of money to the health sector and other sectors that could be significant in helping the country rejuvenate the economy.

Here are seven key things you should know about the budget plan.

1.

Smaller size

Finance Minister Yuba Raj Khatiwada before announces the annual budget for fiscal year 2020/21, in Kathmandu, on Thursday, May 28, 2020.

Owing to the current Covid-19 economic crisis, the government reduced the size of the budget plan. Whereas the ongoing fiscal year’s budget amount was Rs 1.52 trillion, the government restricted the size to Rs 1.474 trillion for the next year.

2.

Increase in health budget

File: Ministry of Health

The country’s annual health budget has increased by around Rs 22 billion with a target of improving the healthcare system and making it capable of addressing the Covid-19 crisis and similar crises in the future.

Last year’s health budget was Rs 68.78 billion whereas this year’s is Rs 90.69 billion.

3.

Pork-barrel fund reduced

File: Nepal’s Parliament building

The government announced to continue the controversial Local Infrastructure Development Partnership Programme that allows federal lawmakers to spend budget on the projects they choose and design but reduced its size. Whereas a constituency would get Rs 60 million up to now, the amount has been reduced to Rs 40 million for the next year.

4.

Subsidised loan for new businesses

The government has announced to provide a subsidised loan for the entrepreneurs starting new businesses at a two per cent interest rate. The government has allocated Rs 500 million to cover the subsidised interest in this scheme.

5.

Plan to repatriate migrant workers

File image: Nepali migrant workers at a Malaysian airport

Minister Khatiwada said the government would allocate budget to repatriate Nepali migrant workers who have been stranded abroad due to the global Covid-19 crisis. He said the government would provide skill training to around 75,000 of such workers.

6.

Cutback in employee allowance

The government has decided to cut back on the allowances provided to government staff except those working in the Covid-19 response. The government announced to scrap various public institutions which were found to be unnecessary by a government commission.

Likewise, the government would not recruit new staff except those working for essential services next year.

7.

Infrastructure projects

The runway of under construction Gautam Buddha International Airport is being blacktopped, in Bhairahawa, in March 2019.

Khatiwada announced heavy allocations for ambitious infrastructure development projects of the country. In total, the Ministry of Physical Infrastructure and Transport is receiving Rs 138 billion.

The key projects that would receive significant funds are:

  • Kathmandu-Tarai fast track: Rs 8.93 billion
  • International airport construction and preparation in Pokhara, Bhairahawa, and Nijgadh (including the upgrading of Kathmandu airport): Rs 19.42 billion
  • Tunnel road projects: Rs 6.42 billion
  • Melamchi Water Supply Project: Rs 5.4 billion

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