Nepal Economic Digest (May 29, 2020)

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May 29, 2020

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Nepal Economic Digest (May 29, 2020)
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KATHMANDU: Economic Digest, a daily morning email digest, is basically a relatable summation of important business news from Nepal into easy-to-understand summaries.

Customs duties on diesel, petrol and gold hiked

The government has increased customs duties on some petroleum products. In the budget speech for the coming fiscal year, Finance Minister Dr. Yubaraj Khatiwada announced a modest increase in customs duty on petroleum products other than aviation fuel and LP gas.

He also announced an increase in customs duty on gold and gold jewelry. He said that the health risk tax on cigarettes and gutkha has been increased.

Govt unveils Rs 1.474 trillion budget for FY 2020/21

The government announced the Federal Budget of Rs 1,474.64 billion for the fiscal year 2020/21.

Finance Minister Dr Yubaraj Khatiwada, in his budget speech, said a total of Rs 948.94 (64.4%) billion has been allocated for the recurrent expenditure.

Likewise, a total of Rs 352.91 (23.9%) billion was allocated for capital expenditure and 172 (11.7%) billion has been allocated for financial management in the next fiscal year.

Similarly, the budget 2020/21 has targeted to raise a total of Rs 889.62 billion through revenue collection. It has also aimed at raising Rs 60.52 billion through foreign assistance.

Likewise, the budget has also aimed at raising Rs 225 billion and Rs 299.50 billion through internal and external debts, respectively.

Govt projects 7 percent economic growth rate

The government has projected a 7 percent economic growth rate for the coming fiscal year. Announcing the budget for the coming fiscal year 2020/21 on Thursday, Finance Minister Yubaraj Khatiwada said that the inflation would be limited to 7 percent next year.

The government had set a growth target of 8.5 percent for the current fiscal year but has limited it to 2.3 percent due to coronavirus. Similarly, the government had set a target of limiting inflation to 6 percent in the current fiscal year.

Govt provides 20 percent exemption in income tax for tourism entrepreneurs

The government has announced 20 percent exemption in income tax for tourism entrepreneurs. Unveiling the budget for the fiscal year 2077/78 on Thursday, Yubaraj Khatiwada said that 20 percent exemption has been made in the income tax levied on airline, hotel, transport, travel and trekking.

Similarly, the time for filing value added tax and tax for tourism, transportation and cinema houses has been made quarterly.

Govt to add 1,300 MW electricity to national grid

The government says it will add a total of 1,300 MW of electricity to the national grid. Presenting the budget on Thursday at the joint session of the federal Parliament, Finance Minister Dr Yubaraj announced the addition in electricity supply based on the completion of the Upper Sanjen and Upper Tamakoshi hydropower projects. Both the projects are near completion.

Likewise, Minister Dr Khatiwada announced about prioritizing alternative sources of energy including solar energy, hydropower, and production of electricity from organic waste. “The government has allocated Rs 4.13 billion for this purpose,” he said while unveiling the budget.

Rs 19.42 billion allocated for construction of international airports

The government has allocated Rs 19.42 billion for the construction of the international airports. Unveiling the budget for the coming fiscal year 2020/21, Finance Minister Dr. Yuvaraj Khatiwada said that priority has been given to safe, regular, accessible and reliable air services.

The budget has also been allocated for inter-state flights and international flights.

Subsidy to farmers, barren land to be utilized

The government has said it will make the maximum utilization of the land for creating job opportunities in the country. Presenting the budget for the Fiscal Year, 2020/21, Finance Minister Yuba Raj Khatiwada said an arrangement will be made to provide land to farmers on lease.

Similarly, subsidized loan will be proved to farmers to cultivate the barren land. “As many as 300 bank swill be established and shares worth Rs 500 million will be issued to the farmers,” said Minister Khatiwada, adding, “the fertile land will be strictly banned for human settlement.”

Rs 1.26 billion allocated for tourism infrastructure development

The government has allocated Rs 1.26 billion for the development of necessary infrastructure for the development of the tourism sector affected by COVID-19.

Presenting the budget for the coming fiscal year 2020/21, Finance Minister Yubaraj Khatiwada said so on Thursday.

Minister Khatiwada also informed that there is a budgetary arrangement for the construction of a hill station for the development of tourism.

Likewise, in order to promote domestic tourism as soon as the risk of coronavirus is eliminated, the government will encourage civil servants, and employees of organized and private sectors to visit the country.

Govt plans to provide employment to 200,000 people

The government has allocated Rs. 11.60 billion for the Fiscal Year 2020/21. While presenting the budget for FY 2020/21 at a joint meeting of the House of Representatives and the National Assembly Finance Minister Dr. Yubaraj Khatiwada said that the allocated amount will be used to create job.

According to him, 200,000 people will get employment through this program. The government has increased the amount to double compared to last year.

Govt to provide Small Farmers’ Loan

Finance Minister Dr Yubaraj Khatiwada has said the government will provide Small Farmers’ Loan that will help create 40 thousand job opportunities in the country.

He said that all social security allowances will be continued, and infrastructures will be made disable-friendly. Minister Dr Khatiwada also said that the government will work towards making milk and meat products self-reliant.

According to him, the Prime Minister’s Agriculture Modernization Program will be strengthened, in which Rs 3 arba 22 crore has been allocated for the same.

Organic farming will be branded and commercialized, the minister said adding that a hub market will be developed in Kathmandu’s Chobhar for the same. He also said that the government will provide allowance for community agriculture.

Meanwhile, the government will provide scholarship and internship to students studying agriculture.

Coronavirus-affected businesses to get loan at 5 pc

The government will provide loans to coronavirus-affected businesses at an interest rate of 5 percent.

Finance Minister Dr. Yubaraj Khatiwada, while presenting the budget for the fiscal year 2020/21 said that a loan arrangement has been made for the coronavirus affected businesses at a 5 percent interest rate.

The Finance Minister informed that the Nepal Rastra Bank has made arrangements to provide loans to the entrepreneurs at a concessional interest rate through refinancing of Rs 100 billion.

(Compiled and prepared by Swastik Aryal and Nitish Lal Shrestha)

Nepal Economic Digest is a daily morning email digest, basically relatable summations of the most important business news, happenings from Nepal into easy-to-understand summaries.

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