KATHMANDU, May 29 (Xinhua) -- The Nepali government has targeted the economic growth of 7 percent in the next fiscal year 2020-21 despite severe impact of COVID-19 on the economy as it presented the annual budget of 1.47 trillion Nepali Rupees (12.14 billion U.S. dollar) on Thursday.
It is the reduced size of budget presented for the next fiscal year that begins in mid-July compared to size of the budget for the current fiscal 2019-20, as the Nepali government expects to cut its revenue collection in the next fiscal year due to the impact of COVID-19 on Nepali economy.
In the last fiscal year, the government presented a budget of 1.53 trillion Nepali Rupees (12.59 billion U.S. dollar).
Presenting the budget at the joint session of the House of Representatives and the National Assembly, the lower and upper house respectively, on Thursday, Nepal's Finance Minister Yubaraj Khatiwada said that a 7 percent growth target was set with conviction that the economy would achieve speedy recovery whenever the situation normalized from COVID-19 crisis.
The Finance Minister however said that growth in the current fiscal year 2019-20 is expected to remain at 2.3 percent, still an optimistic view as COVID-19 crisis deepening in the Himalayan country as number of cases reached 1,042 on Thursday, a significant rise from just 57 till April ends.
Nepali government has reoriented the priorities in the budget for the next fiscal year to health, economic recovery and job creation from the past focus on physical infrastructure development.
It has increased the budget for the health sector significantly by 32 percent to 90.69 billion Nepali Rupees (499 million U.S. dollar). In the next fiscal year, Nepali government aims to add 272 new hospitals with 5-15 beds in local levels.
"New infectious disease control hospital will be established and human resources development in health sectors is another priority," the Nepali Finance Minister said.
With the pandemic impacting the global economy including that of Nepal badly, tens of thousands of Nepalis at home and abroad have either lost jobs or on the verge of losing their employment. So, the creating employment opportunity has been a major priority for the next fiscal year.
The finance minister announced the plan to create over 700,000 new employments under various employment centric programmes. There are various ongoing programmes to create employment including the Prime Minister Employment Programme and Youth and Small Entrepreneurs Self Employment Programme among others.
Through conducting skill training for Nepali workforce including those who return home from foreign employment, the government targets to create additional employment opportunities at home, according to Khatiwada.
According to Nepal's Ministry of Labour and Social Security, more than 500,000 Nepali migrant workers are expected to return home from Gulf nations and Malaysia in due course of time due to the impact of pandemic in these countries.
The government has also announced a number of economic recovery plans including tax cuts to small enterprises and making available finances at cheaper interest rate to run enterprises and to pay to the employees.
According to Minister Khatiwada, the Nepali government will create the fund of 50 billion Nepali Rupees (411 million U.S. dollar) to finance the micro, small and medium industries as well as tourism enterprises at 5 percent interest rate in order to enable them to pay to their workers' wages.
He also announced that the government would create the refinancing fund of 100 billion Nepali Rupees (823 million U.S. dollar) that would provide finances to the enterprises in tourism, hotels, production and agriculture sector at 5 percent interest rate to rescue their businesses. Income tax exemption from 25 percent to 75 percent has also announced for micro, cottage and small enterprises.