Policies and priorities of new budget: Govt targeting sustainable and inclusive economic growth

The government is aligning the budget for the fiscal year 2024/25 with the policies outlined in the 16th National Plan, the strategy set for graduation to a developing country in 2026, the sustainable development goals 2030, and the need to create a basis for sustainable and comprehensive economic growth.

Presenting the principles and priorities of the Appropriation Bill in the House of Representatives on Tuesday, Minister for Finance Minister Prakash Sharan Mahat said that the upcoming budget will primarily focus on bolstering production and productivity through increased public spending on prioritized projects.

Pre-budget discussions have begun in the House of Representatives three months ahead of the budget day, scheduled for May 28, this year. Earlier, the government used to table the principles and priorities of the appropriation bill 15 days prior to the budget day. The government amended the provision by bringing an ordinance.

The government is putting focus on strengthening the financial sector. Minister Mahat, in the principles and priorities document, has expressed commitment to enhance the efficacy of regulation and supervision in the financial sector, with the aim of developing a robust, competitive, and dependable financial landscape. Additionally, the government has promised to enhance the professionalism of regulatory bodies overseeing banks, financial institutions, microfinance, insurance, and the share market, while also prioritizing transparency and accountability.

The budget principles revolve around sustainable and inclusive economic growth, balanced public finance, efficient budgetary allocation, social sector development, social justice, private sector promotion, federalism, good governance, sustainable development, and climate change.

Moreover, the government has identified hydropower development, modernization and commercialization of agriculture, development of tourism and IT sector, infrastructure development, social sector upliftment, green development, disaster management, harnessing demographic dividends and youth mobilization, strengthening of the financial sector, upholding the rule of law, and fostering international cooperation and relations are the priorities of the government.

Speaking in the House of Representatives, Minister Mahat said that the new budget will prioritize high growth rate while maintaining macroeconomic stability and enhancing the living standards of citizens. “The budget will be tailored to elevate the country’s economy to the standards of the global economy and improve the livelihoods of those struggling to meet their basic needs,” Mahat added. He insisted that the country's economy is moving in a positive direction. 

“The increase in electricity generation and tourist numbers as well as the rise in foreign investment have contributed positively to the economy. There is sufficient liquidity in the banking sector and the interest rate is falling towards single digit,” Mahat said. “Although the revenue collection is not as per the target, the growth rate is around 10 percent. I am confident that it will increase further in the coming days.”

Furthermore, the budget will focus on mobilizing government resources for sustainable and inclusive economic growth, channeling investments into critical public infrastructure sectors such as energy, agriculture, tourism, and information technology. Efforts will also be directed towards facilitating private sector investment to stimulate production, productivity, and job creation domestically.

To ensure the efficient allocation of public expenditure, the government has said that it will prioritize projects based on pre-assessment and completion criteria and ensure that priority projects won’t face dearth of resources. 

Moreover, the government has said in the policies and priorities document that it would increase revenue mobilization through business and investment-friendly taxation policies and allocating public resources towards service delivery, socio-economic infrastructure development, and human capital enhancement. Likewise, the government has said that it would eliminate duplication in subsidies and benefits by focusing resources on target groups, while also implementing necessary policy, legal, and institutional reforms to foster a conducive environment for domestic and foreign investors, notably through the Nepal Investment Summit scheduled for April 2024.

Furthermore, the government has said that it would streamline public service delivery, making it more citizen-friendly and aligned with federal norms and values. Likewise, it plans to focus on increasing electricity generation through domestic and foreign investments, thus promoting a green economy by boosting domestic electricity consumption.

The government said in the policies and priorities document that it would develop Nepal as a premier tourism destination by resolving operational obstacles at Pokhara and Bhairahawa airports, initiating the construction of Nijgadh International Airport, and ensuring timely completion of strategic projects such as the Kathmandu Tarai Madhes Expressway and crucial highways. Likewise, the government has said that it remains committed to advancing the health insurance program, promoting youth-centric entrepreneurship, and fostering domestic employment opportunities to mitigate the need for youth migration abroad for employment.