FinMin denies budget is distributive

Minister of Finance Yubaraj Khatiwada and Minister of Information and Communications Gokul Prasad Baskota (left) take part in post-budget interaction with journalists held at the Ministry of Finance in Kathmandu, on Thursday, May 30, 2019. Photo: RSS

Kathmandu, May 30

Minister of Finance Yubaraj Khatiwada today said the budget for fiscal 2019-20 was not ‘distributive’ and met the aspirations of the people, economy and the entire development process.

At a post-budget interaction with journalists, Khatiwada said the budget had given priority to enhancing education, health and drinking water sectors and creating job opportunities in the country to ensure people’s fundamental rights.

He added that top priority had been given to infrastructure development, which was crucial to materialise the country’s development aspirations and economic growth.

The budget has been criticised, especially for allocating a large chunk for recurrent expenditure and low allocation for development expenditure. Giving priority to populist programmes, such as raising the budget for constituency development programme and substantially raising salaries of civil servants, experts have been criticising this distributive nature of the budget.

Khatiwada defended the hike in the budget for constituency development programme by Rs 20 million, saying, “Lawmakers are people’s representatives. We cannot neglect the will of people’s representatives towards development.”

However, the finance minister mentioned that effective monitoring of the constituency development programme was necessary to ensure accountability while using the fund.

Khatiwada added that raising the elderly allowance and salaries of civil servants was necessary to address the aspirations of people.

The minister said the government would be successful in meeting its revenue collection (Rs 981 billion) and economic growth target (8.5 per cent) in the next fiscal. “The government, through the budget, has tried to promote domestic production-oriented revenue collection over import-oriented revenue collection,” he said.

As a number of big projects, including Gautam Buddha International Airport, will be completed within fiscal 2019-20, the 8.5 per cent growth target is achievable, Khatiwada stated. He said inflation in the next fiscal would be below six per cent as mentioned in the budget.

Khatiwada said the budget had not made any significant changes in taxes in a bid to promote businesses. “The tax administration has to be predictable, accountable and scientific. Instead of focusing on rates, the budget has focused on raising compliance on value added tax,” he added.

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