Finance Minister Yuvaraj Khatiwada unveiled a total budget of Rs 1.53 trillion for the fiscal year 2019-20 at the Federal Parliament with a mission for the country to achieve the status of a middle-income country by 2030.
A growth target of 7% has been set and the budget aims at creating jobs for 500,000 individuals with targets set for each sector from allocated resources. At a size of 1.53 trillion, the recurrent budget is 957.1 billion, capital expenditure is 408.59 billion and financing is 167.5 billion.
Khatiwada has stressed on channelising resources of banks and financial institutions to production sector, and unveiled loan schemes for migrant returnees, women, youth and members of Dalit community. Economists and experts have termed the budget ‘realistic and balanced’ although populist.
The fiscal budget has announced that FDI will be discouraged in non-tradable sectors and promoted in exports that have optimum value addition in the economy. The budget has offered 5% cash incentive on exports. The budget has announced incentives to boost agriculture production. The government will bear 75% of insurance premium on agriculture, livestock and fishery. The federal budget has allocated Rs 5 billion for subsidising interest in agriculture credit for the fiscal while 25% grant will be provided to farmer cooperatives for purchasing equipment for processing milk, meat, fruits and vegetables and similar amount of grant will be provided for establishing factories of silk, cotton and wool.
The fiscal budget has given priority to tourism sector and allocated Rs 5.2 billion for development of the sector with the aim of bringing two million tourists in the next two years.
The federal budget has allocated resources efficiently for infrastructure projects to address infrastructure bottlenecks and unleash economic potential. It has allocated Rs 19.35 billion for improvement in aviation infrastructure. To take forward the energy – generation and transmission -projects and extension of existing system, the budget has allocated Rs 83.9 billion for energy sector. A total of Rs 109.38 billion has been allocated for transport infrastructure: roads, rails, tunnels, and Rs 151 billion for post-earthquake reconstruction.
The federal budget has assigned Rs 113.43 billion to seven provinces and Rs 195.05 billion to 753 local bodies in equalisation and conditional grants. Under the revenue-sharing scheme, the provinces and local bodies have received Rs 60.42 billion and Rs 53.82 billion respectively. The government has set a revenue collection target of Rs 831 billion for this fiscal.