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The Madhesh province government is going to present its policies and programs of the coming fiscal year 2022/23 in the provincial assembly meeting today.

Chief of the Province Harishankar Mishra is scheduled to present the policies and programs of the provincial government for the new fiscal year in the meeting of the provincial assembly to be held at 4:00 pm today, said Ranjit Kumar Yadav, secretary of the provincial assembly secretariat.

In the policies  and programs, priority has been given to agriculture, education, health and other programs. A meeting of the Council of Ministers of the Madhes province government held on Saturday had approved the policy and program for the coming fiscal year 2022/23 to be presented in the provincial assembly meeting.

Similarly, the Madhes province government will present the budget for the fiscal year 2022/23 in the forthcoming provincial assembly meeting on June 15, according to Minister for Home and Communications Bharat Prasad Shah.

Nepali Congress, the leader of the five-party ruling coalition, seems to be in a mood for early elections. That should also suit CPN-UML, the main opposition, just fine. Although UML lost 89 top local level seats compared to its tally after the 2017 elections, the party in fact made a gain of 3.66m votes in all contested seats. Nepali Congress, for its part, got around 850,000 fewer votes than the UML. Had the five parties not ‘ganged up’ against it, UML could have trounced any individually contesting party, the party top-brass believes.

It is also hoping to prise away Maoist Center and Unified Socialist, the two communist coalition partners, from Nepali Congress before the upcoming federal and provincial elections. Upendra Yadav’s Janata Samajbadi Party might also be game for a rupture with Congress. Many top leaders of these three parties feel the Congress ‘betrayed’ them in local polls: even in joint tickets, while Congress won the top seats, they didn’t win the deputy seats as Congressis didn’t vote for them.

For the next few weeks the parties will be busy breaking down the results of local elections to chart a way forward. Sher Bahadur Deuba will have his work cut out keeping the coalition intact. 

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Finance Minister Janardan Sharma said that the budget presented for the next fiscal year 2022/23 is not ambitious.

Reponding to the questions raised by the lawmakers on the budget in the Parliament, Minister Sharma said that the budget is not ambitious but based on reality.

"The budget sees the private sector as the engine of economic growth," he said, adding, "The budget has stressed on agricultural production."

He further said that the budget has given top priority to domestic production. 

Minister Sharma went on to say that the budget is trying to resolve the problems by increasing the production.

Sri Lanka’s cash-strapped government has announced a taxation overhaul to boost revenue amid the country’s crippling economic crisis, hiking value added taxes and corporate income tax, and slashing the relief given to individual taxpayers, Reuters reported.

Prime Minister Ranil Wickremesinghe, who took office this month and plans to present an interim budget within weeks, said on Tuesday the measures were necessary as the current state of government finances was unsustainable.

“The implementation of a strong fiscal consolidation plan is imperative through revenue enhancement as well as expenditure rationalization measures in 2022,” Wickremesinghe’s office said in a statement.

Sri Lanka’s inflation rose to 39.1 percent in May, its statistics office said – a record level, compared with the previous high of 29.8 percent recorded in April.

An increase in value added tax (VAT) to 12 percent from 8 percent with immediate effect is among the key tax increases announced on Tuesday, which is expected to boost government revenues by 65 billion Sri Lankan rupees ($180.56m), according to Reuters.

Other measures, including increasing corporate income tax to 30 percent from 24 percent from October, will earn an additional 52 billion rupees ($143.46m) for the exchequer.

Withholding tax on employment income has been made mandatory and exemptions for individual taxpayers have been reduced, the statement said.

The island nation of 22 million people has been battered by its worst economic crisis since independence from Britain in 1948, with a severe shortage of foreign currency stalling imports of essentials, including food, fuel and medicines.

The roots of the crisis lie in tax cuts enacted by President Gotabaya Rajapaksa in late 2019, which came months before the COVID-19 pandemic that battered the country’s lucrative tourism industry and led to a drop in foreign workers’ remittances.

The tax cuts caused annual public revenue losses of about 800 billion rupees ($2.2bn), the prime minister’s office said in its statement.

The new tax regime and COVID-19’s impact, together with the pandemic relief measures, widened the budget deficit significantly to 12.2 percent of gross domestic product (GDP) in 2021 from 9.6 percent of GDP two years earlier, Reuters reported.

In an interview with the Reuters news agency this month, Wickremesinghe – who also holds the finance ministry portfolio – said he would cut expenditures down “to the bone” in the upcoming interim budget and reroute funds into a two-year relief programme.

The tax hikes are aimed at putting public revenues back at pre-pandemic levels and focused on fiscal consolidation as the country seeks a loan package from the International Monetary Fund (IMF), said Lakshini Fernando, a macroeconomist at investment firm Asia Securities.

“The tax increases are definitely a very positive first step, especially for IMF talks and debt restructuring,” Fernando said.

“This was required to take forward discussions and will also help the government in talks with bilateral and multilateral partners to secure more funding,” Fernando said, according to Reuters.