Kathmandu. Finance Minister Dr Swarnim Wagle has said a transformative budget would be brought by breaking the traditional style.

Speaking at a policy discussion organized by the Society of Economic Journalists Nepal (SEJON) on Thursday, Finance Minister Wagle said that a transformative budget would be brought by breaking the old style and tendency.

He said that a result-oriented and reform-oriented budget would be brought. Commenting on the exaggeration and confusion among the general public about the budget, he said that the budget should be understood as a practical document of the government’s income and expenditure management.

According to him, all the ministries have been directed to prepare plans for the upcoming budget within the limit of around Rs 1.89 trillion set by the National Resource Estimates Committee. However, he said that the current ceiling is not enough for economic transformation.

Stating that the tendency to bring a bigger budget than the revenue capacity had created problems in the past, he said that there were obligatory liabilities of around Rs 1330 billion for the coming fiscal year and the country’s revenue potential was only around Rs 1180 billion.

Finance Minister Wagle said that debt mobilization has its own responsibilities and limitations, adding that such a situation has posing challenges even to fulfill mandatory liabilities. He said that the question of whether the budget of around Rs 19 trillion can make the economy of around Rs 70 trillion effective is important.

Indicating that ineffective programmes would be cut down due to limited resources, he said a policy would be adopted to revitalize the economy by strategically increasing public expenditure.

He also said that equal priority would be given to investment in the social sector. According to him, the budget will be brought in a way to turn the ship of economic governance by keeping good governance, easy service delivery and employment generation at the centre despite limited resources.

Stating that tax reform would be accorded priority for strengthening revenue mobilization, Finance Minister Khatiwada said the government was sensitive to complaints that the existing tax rate proved impractical. He said that the budget is being prepared with the objective of increasing consumption by reducing the tax burden and reviewing the issue of high income tax and customs rate. “The government does not follow the traditional notion that reduction in tax will reduce revenue,” he said.

He made it clear that the election manifesto of the ruling party would be made the guiding line for the formulation of the budget, adding that the security of the middle class and industrialists and entrepreneurs would be kept at the centre. Stating that foreign grants were declining due to lack of spending capacity, he said the government was focused on enhancing the implementation capacity.

Finance Minister Wagle also indicated that the schemes included in the budget on the basis of sick projects, power and access and programs that do not give results will be removed from the budget. “The message of good governance should be given by cutting off the programmes reflecting capitalism,” he said.

Describing the private sector as the major driver of the country’s economy, he said honest entrepreneurs have nothing to fear. He also said that impractical laws would be amended and new laws would be formulated to create investment-friendly environment.

Finance Minister Wagle said that economic growth rate and job creation would be the main goal of the budget, claiming that the economic growth target of around seven per cent was ambitious.

Hydropower, mineral, infrastructure connectivity, education and health among other social sectors would be given priority and policies would be adopted to attract investment of Diaspora.