KATHMANDU, Nov 12: The Ministry of Finance has readied a full budget of around Rs 460 billion to replace the present one-third budget for 2012/13, even though it still remains uncertain whether the government will actually forward it to the president for endorsement.
In absence of political consensus till late Sunday, officials doubted whether the president would promulgate the budget even if forwarded to him.
Nonetheless, they said MoF and National Planning Commission (NPC) are ready to unveil the budget if government went ahead with its plan and President Dr Ram Baran Yadav endorsed it.
"Except for tax adjustments, exercises on which we will start soon, we (MoF and NPC) have completed all the tasks on the budget," said an MoF source. "We will complete the remaining tasks by late night. Then it will be up to the political leadership to decide whether it will forward it to the president," he added.
Talking to Republica, sources disclosed that the size of full budget that the government has prepared is some Rs 30 billion higher than the previously set size of just over Rs 429 billion.
The size was increased after NPC on Friday revised the budget ceiling upward to just Rs 457 billion, and further gave nod on Sunday to MoF to inflate it by about another Rs 3 billion, citing better than previously anticipated growth of revenue and fresh foreign aid commitment.
Facts gathered by Republica show that the proposed budget will set aside Rs 10 billion for fresh election to the Constituent Assembly.
It will also allocate another Rs 10 billion for setting up a Price Stabilization Fund (PSF) to manage oil loss that might emanate due to the lack of adjustment of domestic petroleum rates in line with the international trend.
"Setting up PSF will be crucial because the government, irrespective of which party leads it, will not be able to hike oil prices in the election year," said the source.
Likewise, the proposed budget will also set aside more than Rs 3 billion to subsidize chemical fertilizers.
"The allocations for education too have been raised significantly because the government is preparing to announce special programs for students from Dalit and other underprivileged communities," said the source.
Sources disclosed that the budget has a wide array of populist programs scattered across different sectors.
Good thing though is it has set aside Rs 2 billion for the development of Mid-Hills Highway, Rs 1 billion each for Kathmandu-Tarai Fast Track and Bheri-Babai Irrigation Project and Rs 800 million for Sikta Irrigation Project.
"There are other strong allocations for power sector development, and expansion of existing roads and construction of new roads in the Kathmandu Valley," said the source.
But given that four months of the fiscal year have already passed and the government over the next six months will focus on CA election, officials doubted effective implementation of the development programs and capital spending.
The budget will raise the ceiling of income tax exemption. "We are yet to finalize it, but I feel the ceiling will be raised by Rs 100, 000," said the source.
The tax exemption limit presently stands at Rs 160,000 for individuals and Rs 200,000 for couples. So, the increase will largely relieve the salaried and fixed wage earning middle income groups, raising their spending capacity.
In order to finance the budget, MoF has planned to collect revenue of around Rs 298 billion, domestic borrowing of around Rs 42 billion and foreign aid of Rs 120 billion in this fiscal year.