No major departure in policies and programmes in the budget

JUL 10 -
The government is planning to announce the budget for the new fiscal year next week. Following a meeting with President Ram Baran Yadav on Monday, the Finance Ministry has been putting the finishing touches to the budget which will not contain any “populist” or new programmes. The Kathmandu Post caught up with Finance Minister Shankar Prasad Koirala to talk about the government’s financial plan for fiscal 2013-14. Excerpts.

This budget was expected to be “non-controversial” but it wasn’t so. A section of the political parties were apprehensive that the new budget would tilt towards a certain political party. They even met the President over the issue.

There is general consensus that the next fiscal year’s budget should be presented on time and that it should be a full one. The Finance Ministry holds discussions with various stakeholders and also receives policy direction from higher authorities during the budget making process. We’ve already held discussions with leaders of the political parties and former finance ministers. Based on these talks, I think the deck has been cleared for introducing a full budget .

As this is an election government, we have understood our limitations well. We want to prepare a budget that will be acceptable to the government that will be chosen by the next election. We will not make a budget that will favour a certain political party or ideology. It will be development-centric and dedicated to national benefit. That’s why I don’t think the budget will be controversial.

But the President and the Chairman of the Interim Election Government had expressed concern over the budget .

The finance minister’s job is to listen to all the suggestions and make the budget as per the needs of the country. It must be endorsed by the Cabinet and the President. I would like to emphasize that the new budget will be a balanced one. There will be no major departure in policies and programmes in the budget .

Some of the former finance ministers even said that this government could not change the tax rate in the new budget . What is your take on that?



After the amendment to the Interim Constitution, the government has been authorised to introduce full details of income and expenditure. However, considering the current circumstances, the government is not in favour of changing the tax rate massively and imposing new taxes. Our view is also that the next elected government should be left to overhaul the tax structure if it deems it necessary.

So what will be the nature of the next budget ?


It will be development focused and will reprioritize certain sectors with targeted programmes. We have given the energy sector the first priority while other infrastructure will be accorded second priority followed by other sectors. There will be few new programmes related to hydropower projects and transmission lines. We will make sure that national pride projects will not lack resources.

A new foreign investment policy is being discussed. What new policy initiatives will the budget contain to boost the investment environment?

One of the objectives of the budget is to create an investment-friendly environment and restore business confidence. We are preparing to introduce an Industrial Enterprise Ordinance where necessary incentives have been included. We are addressing many concerns of the private sector through this act even though it has been three years and three months since the policy was introduced. The teams of the Finance and Industry ministries have reached a consensus.

The Cabinet has approved the draft Industrial Enterprise Ordinance in principle. We will try to introduce this act through an ordinance if possible. Otherwise, we are considering a few incentives included in the draft which will be incorporated in the upcoming budget .

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