Chandan Sapkota’s Blog

Chandan Sapkota’s Blog

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3.23 billion) to the parliament. Needlessly to say, this year’s budget is bigger than last year’s budget and has already been being termed ‘populist’ and ‘inflated’. More here. Read the full budget speech here. The nice thing concerning this budget is that it requires sectoral issues seriously this right time. It has rightly prioritized hydropower, tourism, and agriculture sector as top industries and has emphasized on the industrialization of agricultural sector. This is what I had argued for in last time’s Op-Ed exactly.

I got argued for prioritizing hydropower and tourism sector for the present time and then to focus on developing a good investment environment along with establishment of SEZs so the sluggish production industry could be a major player in GDP. The budget has also aimed increase investment in agriculture, which really is a good news for a country where more than 70 percent of the population would depend on agriculture. But bailing out the poor farmers through cash could be very difficult.

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This mimics the Indian policy of bailing out poor farmers in in last year’s budget. Long tale short, considering the constraints to the overall economy at present and basing guidelines on truth, I am partly pleased with this budget, which has been more better and pragmatic than I needed thought before.

Though agriculture, infrastructure, health insurance and education will be major areas of open public investment, the budget will rate hydropower and travel and leisure on top of its priority, he added. Dr Bhattarai indicated that the new government might not continue days gone by ones’ privatization policy. He reaffirmed days gone by governments’ actions to cope with loan defaulters stringently. But at the same time, he tagged banking institutions as ‘parasites’. However, the purpose of achieving a dual digit growth within five years (specifically, after two years) is very ambitious and I would need very convincing improvement and policies to believe that this will be a reality.

Bhattarai wants to take two years to prepare the country to get ready to create off in a dual digit growth trajectory. However, given the dangers to private property (even the Maoist’s party land reform minister grabbed land by pressure), bottlenecks in supply side, and sluggish manufacturing sector, I’d be very hesitant to aim for a dual digit growth rate. The other issue that is sidelined in this framework is monetary plan.

I don’t think inflation would be a major issue unless it crosses 10% limit. The ‘dual digit’ number (inflation, not growth rate) would discourage traders. So, as along as it is under this limit (like in India and China), a somewhat inflationary GDP growth rate would be tolerable for two or 3 years. But, this should not be let built on increasing expectations, which would lead to flight of capital and cash from the national country.

Out of the approximated sources of financing for the existing season, Rs 129 billion 215 million would be borne from the existing source of income. From the total foreign assistance of Rs 65 billion 793.8 million, Rs 47 billion 93.2 million would be borne by foreign give, and Rs 18 billion 700.6 million by international loan.

However, there will be a deficit of Rs 41 billion 11.6 million by mobilising both the sources even. Using the same institutions still reigning bureaucracy and the same problems plaguing the economy, I wonder how the current administration is looking to implement the ambitious budget. Update: there is an increase in cover the hydropower and transportation sector (113% and 77.14% respectively).