Finance Minister Bharat Mohan Adhikari presented a budget of Rs 384.90 billion for the fiscal year 2011/12.

The total appropriation for recurrent expenditure is proposed to be Rs. 266.61 billion which is 69.27 percent of the total budget. Rs. 72.61 billion has been set aside for capital expenditure which comes to 18.86 percent of the total budget.

Under the Financing, a sum of Rs. 25.38 billion (6.6 percent) has been allocated for loan and share investment, and Rs. 20.3 billion (5.27 percent) for repayment of principals. The total appropriation proposed for the next Fiscal Year is higher by 25.67 percent compared to revised estimate of this Fiscal Year.

Under the existing arrangement, recurrent and capital expenditure will amount to 56.08 percent and 38.64 percent, respectively, whereas the repayment of principal amount will be 5.28 percent of the total expenditure.

As against the revised estimate of the current fiscal year, the recurrent and capital expenditure will be higher by 19.82 percent and 37.62 percent respectively.

Out of the total appropriation, a total of Rs. 202.56 billion (52.62 percent) has been earmarked for developmental programs whereas for recurrent expenditurea sum of Rs. 182.34 billion (47.38 percent) has been set aside.

Of the total sources of financing to meet the expenditure proposed for the next Fiscal Year, a total of Rs. 241.77 billion will be met from revenue, Rs. 5.93 billion from repayment of principal amount and Rs. 70.13 billion from foreign grants, leaving a deficit of Rs. 67.06 billion.

Of this deficit, Rs. 29.65 billion will be met from foreign loan and remaining Rs. 37.41 billion from domestic borrowing.

- Existing pay scale of government employees including army, police personnel and teachers increased from 30.39 percent to 42.86 percent. FM Adhikari said the pay has been raised considering the current rate of inflation and also taking into account of the recommendations of the committee headed by Chief Secretary of the government “to keep the high morale of all government employees”. Existing dearness allowance has been adjusted to the new pay scale.

- Health Insurance Program for the Civil Servants will be initiated from the next Fiscal Year.

- Grants provided to local bodies for carrying out local development activities initiated by the programme "Let's Build our Village" (Aafno Gaun Aafai Banaun). The then minority government of the UML government had announced the popular programme in 2052 B.S. The government has allocated a total of Rs.14.56 billion for grants to the local bodies.

- Declaration of the source of income not mandatory while purchasing assets form next Fiscal Year, any one purchasing vehicle of less than Rs. 5 million and real estate of less than Rs. 10 million will not be required to declare sources of income. Beyond this threshold, the existing provision will remain in force.

- Excise rates increased on alcohol, beer, cigarettes and tobacco products.

- Foreigners to be allowed to purchase Housing flats above the price range of USD 300,000.

- The eligible age limit of single woman for receiving social security allowance has been dropped and such woman will be eligible to receive such allowances from the date of becoming widow. Arrangement has been made to provide concessional loan without collateral to the cooperatives operated by such single woman.

- A collateral free loan facility up to Rs. 200,000 per person, on confessional interest will be provided targeting to the economically backward classes, women, Dalit, Indigenous people, Janajati, conflict victims and educated unemployed youths to conduct the business and services such as commercial farming, livestock, agriculture-based industries, cottage industries, hair cutting, beautician and soil testing.

- Capital Gain Tax on the income from the sales of house and land reduced by 50 percent.

- Income tax will be fully exempted for the first ten years for hydro-power projects commencing their construction within 24 August, 2014 and starting commercial production by mid-April 2018. Thereafter 50 percent income tax exemption for the next five years will be provided.

- The policy of "From a Bunker to Barrack" barracks construction to be carried out to modernise Nepal Army.

nepalnews.com

Budget Speech (English)

Budget Speech (Nepali)