Budget draws mixed reactions
The budget has received mixed reaction from the political parties and business community
Some political parties and entrepreneurs welcomed, whereas others critisised the Rs 819.47 billion budget presented by finance minister Dr Ram Sharan Mahat yesterday.
Former finance minister and CPN-UML lawmaker Bharat Mahan Adhikari termed the budget positive. “The strategies on post quake reconstruction, infrastructure development and its implementation are positive,” he said, adding, “but it is not good for ministry to take charge of the affairs until the Reconstruction Authority was formed.”
The budget has allocated Rs 74 billion to recently-formed Reconstruction Authority and Rs 17 billion – to ministries till the authority gets its full shape and operational – making it to a total of Rs 91 billion for reconstruction.
Likewise, Rastirya Prajatantra Party-Nepal chairman Kamal Thapa termed the budget as simple and normal. Thapa, however, said that the government should have taken a bold step at the time of national crisis in the aftermath of devastating earthquake of April 25 and May 12, and subsequent aftershocks.
The government has incorporated most of the suggestions from private sector, said president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pashupati Murarka, welcoming the government’s move of increasing threshold for VAT to Rs 5 million. The private sector had long been demanding the government hike the VAT threshold. The business transaction of up to Rs 5 million will be exempted from VAT from next fiscal year from current Rs 2 million.
The budget has also announced special facilities to cement industries and amendment of the Act on foreign investment and technology transfer to allow Nepalis to invest abroad.
The budget has repeated its commitment to construct access roads for cement plants and facilitate electricity. Road connecting 16 cement factories with their mines, while electricity sub-centres and transmission lines at 12 cement factories will be constructed, the budget stated, adding that it has allocated Rs 630 million for the purpose. “Likewise, factories that produce up to 3,000 tonnes of cement by extracting 4,800 tonnes of limestone can operate only after conducting preliminary environmental assessment. Similar modules of constructing needy infrastructure will also be initiated for iron extracting mines of Ramechhap.
The budget also reiterated that the government will allow foreigners to purchase property in the country.
The budget has also planned ‘Investment Conference’ to encourage the investment in the country. Likewise, the budget hass also promised to allow investment in big infrastructure and other potential sectors under public-private partnership (PPP).
The finance minister alo said that the contribution made by the private sector to the Prime Minister Relief Fund can be deducted from their income.