6% economic growth target gettable, insists Minister Pun

KATHMANDU: Minister for Finance Barsha Man Pun has insisted that the economic growth target of 6% for the fiscal year 2024/25 is gettable.

Answering to queries raised by members of the National Assembly on Tuesday, Pun said that the new budget size is balanced and not overly ambitious compared to the size of the gross domestic product, the state of public finance and the previous budgets.

Pun also said resources required for budgetary programs will be managed with an action plan to implement the budget.

“The new budget is production-oriented rather than distribution-oriented, as it aims to further energize the economy and boost the morale of the private sector,” he added. “The expenditure estimate is only 6.2% higher compared to the budget for the current fiscal year.”

Pun also said the budget for recurrent expenditure has been lowered compared to the current fiscal year, while the budget for capital expenditure has been increased.

“We prepared the new budget based on the constitution, the review of the 15th periodic plan and the vision outlined in the 16th plan, as well as the review of the achievements over one and half decades of the republican setup,” the finance minister added.

Pun also said that Rs 667 billion has been earmarked for revenue sharing and grants to the provincial and local governments in the upcoming fiscal year which is higher than allocations made in the current fiscal year. He clarified that foreign aid has been proposed only for projects and programs that are ready for implementation.

Pun explained that additional budget has been allocated under the miscellaneous heading of the Ministry of Finance for the reconstruction works in quake-hit Rukum West and Jajarkot district, production and employment generation programs, as well as power transmission projects under the Millennium Challenge Account (MCA) Nepal.

Pun expressed confidence that the utilization of public debt in productive sectors, as the ratio of public debt to gross domestic product, remains below 40 percent, would contribute to the country’s prosperity.

“The budget aims at creating additional employment opportunities through government investment, increased foreign direct investment, and investment by the private sector, thereby creating an environment for providing employment within the country,” Minister Pun added.

Stating that the revenue estimate for the upcoming fiscal year has been lowered compared to the current fiscal year in an effort to make it more realistic, Minister Pun expressed commitment to gradually implement the recommendations of the High-Level Tax System Reform Suggestion Committee.

He added that the excise duty on tobacco and alcohol products has been increased to maintain parity with other countries. Pun also stated that a green tax has been introduced on the import of petroleum products and coal, in line with the international commitment to reduce carbon emissions.