High investment in energy ‘is to curb outage’

Finance Minister Shankar Prasad Koirala on Monday said the hefty investment poured in the hydropower sector was to relieve the country of load-shedding within the next three years.
The budget for the next fiscal year announced on Sunday has allocated Rs 30 billion for the energy sector. The government itself is investing in many hydropower projects and transmission lines, and plans to encourage the private sector investment in power generation. “The government has planned to mobilise private sector inve stment in the energy sector by creating an investment-friendly environment,” Koirala said at a post-budget interaction held at the Finance Ministry.
Some of the government-funded projects include 140-MW Tanahun Hydropower Project, 60-MW Upper Trishuli 3A, 42-MW Upper Modi, 32-MW Rahughat, 30-MW Nalsingadh and 14-MW Kulekhani III. The government has also allocated Rs 13.5 billon for the construction of transmission lines—cross-border, north-south and east-west transmission lines.

The government’s second priority has gone to the development of the agriculture sector. Koirala said the alarming rise in imports and trade deficit has worried the government and that it was encouraged to allocate a huge budget for the sector.
The government has allocated Rs 21.4 billion under the Agriculture Ministry for the next fiscal year.  It is 4.13 percent of the total annual budget of Rs 517.24 billion and an 81.39 percent increase compared to the last year’s budget allocation. “Investment in agriculture could be a hedge to this alarming trade deficit as this sector has the potential to give short-term returns,” he said.
Through higher agriculture output, the government plans to substitute import. “Investment in both hydro and agriculture is expected to spur up economy,” the minister said. The government plans to commercialise the farm sector, increase production and productivity. However, Minister Koirala said taming inflation will be a bigger challenge for the government and said supply mechanism will be activated to monitor the market to control artificial price hikes. The government has set 8 percent inflation target for the next fiscal year.
Amid criticism on the budget size and its implementation, Minister Koirala said the timely presentation of the full budget was one of the major successes of the government. The budget is target-oriented and it won’t be difficult for any successive governments to own.
“The timely announcement of the budget with resources guaranteed will ensure effective implementation of the programmes envisaged for the next fiscal year,” he said, adding on-time budget will also ensure the 5.5 percent economic growth is achieved.
According to Koirala, the government is focused on limited projects to make it more effective. The government has reduced the number of its focused projects to 452 from the earlier 459.
The budget has placed the Pashupati Area Development, Lumbini Area Development, President Chure Conservation and Bheri-Babai Diversion Project on the ‘National Pride Project’ list. “Besides, we have also incorporated major projects introduced by the previous governments.”
To reduce hassles and fast-track the tender and procurement process, the finance minister said the government has introduced mandatory e-tendering provision for the projects worth above Rs 6 million.
On the budget’s size, Koirala said it was raised after the CA election was assured. Initially, the finance ministry was given a budget ceiling of Rs 506 billion by the Resource Committee of the National Planning Commission. “After the assurance of the election date, the ceiling was raised to Rs 530 billion. And, we introduced the budget within the ceiling,” he said.
Being an election government, the government has not made significant changes in tax policies, he said, adding to meet the revenue target, the government has decided to increase the tax net. “The government has targeted a 20 percent revenue growth, which is not an ambitious target.” 
src: Kathmandu post