Forgetting about his detractors and opponents, Dr. Pritviraj Legal, a close ally of the Nepali Congress and a former Vice Chairman of the National Planning Commission, compared the budget to a document delivered by a doctor without the right medications for treatment.
Dr. Legal stated, "doctor's budget looks with prescription of compounder," in an interview with web media. Even though Dr. Mahat has defended his budget as being equipped to handle all economic agenda items, several of his plans have come under fire.
"The economy has been in a highly unusual scenario that is headed for a crisis. Dr. Mahat's budget does not, however, contain any recommendations for how to deal with them. This budget is riddled with inconsistencies, according to former minister fiancé and UML leader Bishnu Paudel.
The budget will face more attacks as the House of Representatives debate has already begun. The Swatantra Party has previously demanded that the MP Development Fund provision that would have given each elected member Rs. 50 million be removed.
Finance Minister Dr. Mahat has yet to find strong supporters for his proposal since he presented the budget for the upcoming fiscal year 2023–2024 at the joint session of the Federal Parliament.
The budget's call to delete several provisions was partially supported by the Federation of Nepalese Chambers of Commerce and Industry and Confederation of Nepalese Industries. The budget of Rs. 1751.31 billion for the forthcoming Fiscal Year 2023/24 has been unveiled by Finance Minister Dr. Mahat.
Out of the overall allocation, he said that 11 trillion 41 billion 78 billion, or 65.20 percent, 3 trillion 2 billion 7 billion, or 17.25 percent, and 3 trillion 7 billion 45 billion, or 17.55 percent, were allotted to capital and the financial sector, respectively.
According to him, the expenditure estimate is 16.37 percent greater than the revised estimate and 2.37 percent less than the budget for the current fiscal year. According to him, there is a total allocation of 4 trillion 80 million dollars set aside for financial transfers to the provincial and local levels.
Some experts have referred to the finance minister's decision to decrease the budget as a "courageous move" at a time when Dr. Mahat is coming under fire for his budget.
FM About two thirds of the budget, or Rs. 1141.78 billion (65.20 percent), has been set aside by Dr. Mahat for recurring expenses, which include funding for sub-national governments, upkeep of infrastructure projects, and government wages and subsidies. The payout to the province and local governments will total Rs. 400.8 billion.
The budget is split around 17.25 percent for development projects (Rs. 302.7 billion) and 17.55 percent for financial contingencies (Rs. 307.45 billion). "
. The amount of capital allocated has decreased from the current year's allocation of 21.2%, or Rs. 380.38 billion. With only 48 days left in the current fiscal year, the government has only mobilized 35.6% (or Rs. 135.4 billion) of the overall yearly target, continuing a trend of poor revenue collection.
Similar to this, the budget's priorities include the construction of investment-friendly environments, service delivery improvements, promotion of good governance, and zero tolerance for corruption.
Sources of the budget
FM According to Dr. Mahat, the expected income collection for the upcoming fiscal year is Rs. 1248.6 billion, making it the greatest source of expenditures. About 71.3% of the overall expenditure estimates are made up of revenue estimations. Foreign grants of Rs. 49.94 billion were one other source of funding for the expenses.
The 212.75 billion rupees in foreign loans and the 240 billion rupees in domestic borrowing would be used to manage the remaining sources. This translates to a deficit in the budget of Rs. 452.75 billion, or 25.85% of the total amount of expenditures.
Dr. Mahat, who presented the budget to the legislature, stated that it was created with the goal of reaching a 6% economic growth rate and 6.5 % inflation control. The Nepal Rastra Bank reports that in April of this year, the country's inflation rate was 7.76%.
The budget will also prioritize developing a digital and green economy in order to retain prosperity. In order to make the best use of resources, I have adopted the allocation bill's priority list. According to FM Dr. Mahat, the purpose of this budget is to answer the private sector's recommendations and fulfill the expectations of the general population.
He added that the budget for the upcoming fiscal year had been developed by the administration under the theme of the second phase of economic reform and structural change in the economy.
However, given the performance of the current year and the lackluster outlook for the future, he is likely to have difficulty managing the resources. By Sunday, the government had only been able to collect Rs. 829.6 billion in revenue and other payments, well short of the Rs. 1101.5 billion it had spent.
In order to achieve this goal, transmission lines, micro and small hydroelectricity projects, renewable energy from solar and wind, and other initiatives are being developed, according to the finance minister. The government is planning to increase access to electricity for all households nationwide within the next two years.
According to him, 900 megawatts of electricity from projects in the private sector, including the 111 MW Rasuwagadhi, the 102 MW Mid-Bhotekoshi, the 42.5 MW Sanjen, and many more, would be added to the national grid in the upcoming fiscal year. By the conclusion of the following fiscal year, total installed electricity would be 3600 MW if this objective is met.
The Project Development Agreement for the West Seti, Seti River 6, and Lower Arun hydel projects, as well as the finalizing of the 1,200 MW Budhigandaki and 635 MW Dudhkoshi reservoir projects, are additional projects that are included in the budget.
FM Dr. Mahat added that he had allotted monies for the projects that could be finished on schedule using the projected funding. The budget for the Ministry of Water Resources and Irrigation was significantly cut by Finance Minister Dr. Mahat despite his pledge to use green energy. He has also increased tariffs for electric vehicles, which is in opposition to his pledge to promote sustainable energy.
The MoWERI received 87.45 billion rupees from Minister Dr. Mahat's budget, which is 21 billion rupees less than this year. The development of the distribution system and the building of transmission lines will be hampered by this lack of funding.
Through the Investment Board of Nepal, the government intends to develop a chemical fertilizer plant in the nation. For the upcoming fiscal year, Rs. 30 billion would be set aside as fertilizer purchase subsidies.
Similar to this, excavation at the Dhaubadi Iron Mines will start in the next fiscal after a thorough survey and project report were created.
To advance the mining sector in Nepal, exploration and mining of petroleum products in Dailekh, iron in Nawalparasi and Parbat, granite, slab stone, and ceramics in Makwanpur, limestone in Arghakhanchi, and dolomite in Dhading will continue.
With the announcement to allow any business to be started with just Rs. 100 in paid-up capital and free registration, the finance minister, Dr. Mahat, asserted that he had achieved substantial progress toward industrial transformation.
Burden of Social Security
Even if Dr. Mahat did not raise the elderly's social security benefits, it still costs a lot of money. Social Security makes substantial claims. Amounts for social security programs, including senior citizen allowance, total Rs. 157.7 billion, an increase of Rs. 23 billion over the budget for the current fiscal year. The 4,000 rupee senior citizen allowance has been maintained, and the minimum age to qualify is 68.
The government has continued with the contentious constituency development initiative and has allotted Rs. 50 million for each election constituency in spite of widespread opposition from all sectors.
"I have proposed a parliamentary area infrastructure development program with an allocation of Rs. 50 million to address the local needs of development and construction expected by the people of the constituency through the people's representatives," stated Dr. Mahat.
Shortage of Fund
The Kathmandu-Terai Expressway, the East-West Highway, the North-South Corridor, and connectivity, transmission lines, and distribution system all saw significant budget cuts from Minister Dr. Mahat, despite his assurance that there would be enough money for the national pride projects.
As the nation is still suffering from the economic crisis, FM Dr. Mahat will still struggle to implement the initiatives and projects due to a lack of resources.
According to estimates, the government only reached its yearly revenue target of Rs. 1458.6 billion, or Rs. 824.6 billion, by just 56.53 percent. However, the government's spending has increased to Rs. 1098.2 billion, leaving a Rs. 274 billion difference between its income and spending.
As in the past, just 35.6% (or Rs. 135.4 billion) of the yearly target of Rs. 380.3 billion were spent on capital projects. However, the finance ministry has reduced the revenue projections to Rs. 1244 billion through the mid-term review of the budget. Even to implement its 1549 billion rupee modified budget, the government lacks the money.
Minister Dr. Mahat had promised that there would be enough money for the initiatives celebrating national pride. Similar to this, the budget's priorities include the construction of investment-friendly environments, service delivery improvements, promotion of good governance, and zero tolerance for corruption.
Dr. Swarnim Wagle, a rising economist and Rastriya Swatantra Party member who spoke in the house, referred to the budget as a ceremonial document that did little to address the nation's peculiar conditions.