Economic Indicators –

I have already presented before this august House, the Economic Survey, annual progress details of the Line Ministries for the current Fiscal Year and the progress review of the Public Enterprises for the last Fiscal Year.

These reports have not demonstrated the economic indicators as satisfactory. Nepali economy experienced non-economic obstacles at the time of poor economic growth due to low investment, weak productive sector and structural weaknesses. The economy further shrunk due to earthquake damage and disruption in the supply system.

There is a preliminary estimates of only 0.8 percent economic growth in the current Fiscal Year due to delay in budget implementation, economic sluggishness seen in private sector related to industry, construction and trade and decline in food production because of the unfavorable weather. Consumer price inflation has remained at about 10 percent.

There was an estimated loss of Rs. 700 billion caused by the earthquake. Additional loss has been incurred due to disruptions in the supply system. There is a need of the mobilization of resources equivalent to Rs. 813 billion for the post-earthquake reconstruction.

The revised expenditure for the current Fiscal Year is estimated to be as Rs. 701 billion (85.6 percent) against the allocation of Rs. 819 billion. Of this expenditure, recurrent expenditure is estimated to be Rs. 434 billion (89.6 percent), capital expenditure Rs. 159 billion (76.2 percent) and financing Rs. 108 billion (85.5 percent).

On the resource mobilization front, the revised revenue collection for the current Fiscal Year is estimated to be Rs. 460 billion (96.8 percent) against the target of Rs. 475 billion. Of the target of mobilizing Rs. 205 billion from the foreign aid sources, only Rs. 126 billion (61 percent) is estimated to be mobilized.

Both the import and export of commodities in the current Fiscal Year have declined. Although the trade deficit seems to be lower than the previous year, export can only meet one tenth of the import value. External sector is positive except the trade deficit. Balance of Payment is surplus by Rs. 163.81 billion at the end of the first nine months of the current Fiscal Year. Similarly, Foreign Exchange Reserve of Rs. 1007.61 billion is registered in this period. Remittance inflow in the first nine months of the Fiscal Year increased by 13 percent over the same period of previous Fiscal Year to reach Rs. 481.69 billion.

There has been an improvement in the investment climate. Internal capital market has strengthened gradually. Stock market has been dynamic due to excess liquidity in the capital market. However, challenges remain in the mobilization of financial resources towards productive sector. NEPSE index has been above 1500.

Objectives –

Following are the objectives of this budget:-

• to implement the Constitution,

• to revive the economy affected by the earthquake and the supply system disruption,

• to attain high economic growth through increasing productivity and production,

• to promote domestic and external investment,

• to expand economic activities, increase income and employment and reduce poverty,

 • to create opportunities, capacity building and social protection,

• to provide quality social service to all Nepali people.

Priority Areas –

While allocating budgetary resources, I have given priorities to the following areas:-

• Post-earthquake reconstruction, rehabilitation and new construction

• Hydro power generation, transmission line expansion and distribution

• Road, airport, irrigation

• Agriculture, industry, tourism, forest

• Urban and local infrastructure

• Education, health, drinking water, sanitation

• Social security

• Service delivery, corruption control and governance reform