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The budget must focus on developing the industrial sector by guaranteeing security and the rule of law, encouraging private sector and public investment, developing clear economic policies, increasing capital expenditure, banning strikes, addressing the energy crisis and instituting an industrial security force.
A separate body should be formed to supervise infrastructure development and maintenance. The budget should fund alternative roads connecting Kathmandu with Tarai, a Mechi-Mahakali electric railway and rural roads.
Concrete plans to attract foreign investments in hydropower are imperative. Focus should also be on subsidising alternative energy and the import of diesel plants to address the current power shortage.
The budget should continue past provisions that facilitated revenue collection and checked leakage. The government should reform the VAT scheme, which offers two rates, that only complicates things and reduces revenue collection.
The inflation rate is soaring in Nepal. An ineffective supply mechanism is to blame. Besides checking cartels and black markets, an automatic price adjustment mechanism to adjust the price of petroleum products in consonance with international market prices must be established.
If this is done, the GDP growth rate can be expected to be 5 per cent and the inflation can be restricted to 6 per cent with revenue flexibility ratio 1.15 next year.
A budget between Rs 275 and Rs 300 billion could achieve all this.
