The practice of preparing an annual budget dates back to 1951, right after Nepal’s political transition that led to the end of the Rana regime in the country. Subarna Sumsher, the finance minister then, had publicly announced an outlay of NPR 50.25 million. The political context of the country then was such that the budget was not presented in the Nepali parliament but announced via Radio Nepal. It was only much later, in 1959, that a budget was first presented to the Nepali parliament.
Nepal’s budgetary practice has evolved over the years, but it continues to hold significance, and with some fanfare. What is the day like? Picture this: the Finance Minister walks to the podium with a document briefcase wrapped in a red ribbon. Anticipation and excitement fill the air as people eagerly await to hear what's included or excluded in the budget.
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[00:00:00] Welcome to PODS by PEI. I'm your host for today, Samitra Nyopani, and we are diving into arguably one of the most anticipated events of the year in Nepal, the annual budget speech. Now the annual budget speech for the government of Nepal is quite special. In
[00:00:29] fact, it's the only event date explicitly mentioned in the constitution. See Article 1 19 3 if you don't believe me. The practice of preparing an annual budget dates back to the year 1951, right after Nepal's political transition that led to the end of the Rana
[00:00:45] regime in the country. Subarna Samshere, the finance minister then, had publicly announced an outlay of Nepali rupees 50.25 million. However, the political context of the country then was such that the budget was not presented in the Nepali parliament, but announced via
[00:01:02] Radio Nepal. It was only much later in 1959 that a budget was first presented to the Nepali parliament. Since then, the budgetary practice has evolved, but still continues to hold significance and with some fanfare. What is the day like? Picture this. The
[00:01:24] finance minister walks to the podium with a document briefcase wrapped in a red ribbon. Anticipation and excitement fill the air as people eagerly await to hear what's included or excluded in the budget. But why all the hype, you may ask? Well, the budget
[00:01:44] is the government's major fiscal intervention. It outlines where the government plans to spend, that's the scope of its expenditures, and how it's going to raise funds to meet those spending requirements. That's the scope of its income or revenue. A key aspect
[00:02:00] of this policy document that appeals to the general public is taxes. This policy literally influences everything. It dictates how much of your earnings you pay back to the government, the cost of your daily essentials, your favourite chocolate or the price of your
[00:02:16] next beer. If you're thinking about making a big purchase, changes in tax brackets could you either love or hate the budget. For those of you who were thinking of buying a new electric vehicle this time, you pretty sure know what I mean. Now people often say that this
[00:02:33] year's budget is particularly important. But let's be real, that's what they say every year. The truth is every budget is unique and crucial in its own way, as it is a response to the specific issues and challenges of the economy at that given time.
[00:02:51] Governments use the budget to manage the economy, using expansionary policies to boost growth through higher spending or contractionary policies to curb demand through reduced spending. This year's budget however is special for several reasons. First, the Nepali economy is rebounding from a significant downturn, observing a mere growth
[00:03:11] of little over 1% last year. Second, this year is pivotal as Nepal prepares for its 2026 graduation from the Least Development Country status or LDCs. Third is the first year of Nepal's newly formulated 16th Periodic Plan from the year 2025 to 2030,
[00:03:30] the timeline of which also aligns with the end of the Sustainable Development Clause. Beyond these points, this year's budget also addresses critical political and economic issues currently impairing the Nepali economy. For example, resolving the cooperative crisis, strengthening the investment climate and ensuring financial accountability.
[00:03:50] So in today's episode we will cover what's in the budget as well as the issues and sentiments of the budget. We will break down the key allocations, policies and their potential impacts. But first let's begin by analyzing the economic context of the country today and
[00:04:06] understanding why this budget stands to be somewhat more special than that of the previous years. So what is the economic context of the country today? Lately I've heard people say different things. Limping, leveraged, stuttering, dismal and the list continues. Clearly the
[00:04:25] perception is very poor but is this just a perception or a fact? We're not in a crisis, we've not been in a crisis except if you take into account during COVID of course our economy
[00:04:41] contracted like most economies around the world. But we have been in this slow economic growth period for a long time. We always aim for higher growth rate but we never seem to quite achieve it. That was Sameer Khatiawada, a PhD in economics and currently affiliated with
[00:05:01] the Asian Development Bank as a senior economist. He was previously with the International Labour Organization in Geneva, Switzerland. Now that I've found a doctor qualified to examine the Nepal economy, I asked Sameer for a health check and a diagnosis of the Nepal economy. My first
[00:05:17] diagnostics of Nepal's economy tells me that our economic structure is not geared towards economic growth and job creation in any substantive kind of way. When I compare Nepal to India or Bangladesh or any other country that's doing very well economically, Nepal does lack a
[00:05:36] few ingredients that countries that have done relatively well have a few things that go well for them. One is the industrial sector, the manufacturing sector tends to do very well. At least it tends to do better than what it's been doing in Nepal. Second, a private sector
[00:05:53] led development. This is something that's very critical and we see this across Asia, even in China, which is a communist one party state. Private sector development is absolutely critical and that's something that we have lacked. Third ingredient is infrastructure, good infrastructure.
[00:06:12] Without good infrastructure we cannot compete, we are not economically competitive and this we have seen has been one of the most chronic hindrance to our economic growth. What I mean by infrastructure, both hard infrastructure and soft infrastructure. Hard
[00:06:28] infrastructure meaning roads, airports, that kind of infrastructure. The soft infrastructure is related to skill, skill capacity. By and large our skill set is limited, meaning our workforce is not as competitive. Yes more and more people are educated, perhaps
[00:06:47] they're getting degrees and diplomas but in terms of being skilled, being equipped with employable skills, that is a challenge. When I look at the World Bank's enterprise surveys you always see this, of course you see that in every country where the employers
[00:07:03] complain they can't find the right people. In the case of Nepal I think it might run a bit deeper also. Our foundation is rather weak so when the foundation is weak no matter what you do in terms of TVET or higher education, it's too late to catch up
[00:07:18] at that point. The fourth ingredient, institutions. Institutions are very important and here again we, I don't know what it is to be honest with you, I don't know why we can't build strong institutions but somehow we have been unable to build strong institutions.
[00:07:36] We have politicized most aspects of our economy in that sense which is unfortunate. And when we talk about institutions what's also important is policy, the role policy plays, policy certainty. You can have political instability fine but can we at least have
[00:07:54] policy certainty? That the rules don't change when the Prime Minister changes or the Finance Minister changes right? And of course the fifth challenge of governance cuts across everything that we do. Good governance is critical and here I think it's a work
[00:08:10] in progress. We have made some progress towards it but long way to go. Samir mentions an interesting point on political and policy stability. This has been one of the most defining challenges of the country in the recent past. We will however
[00:08:24] come back to this a bit later in the episode. I continued my conversation with Samir on the idea of Nepal's slow economic growth. There are growth percentages being floated around but how is the economy growing and what do the numbers actually mean? The
[00:08:40] idea of Nepal's slow economic growth is something that is increasingly gaining momentum in the public discourse. I asked Samir to unpack this a bit and compare Nepal's growth with other countries in the region. This is what he had to say.
[00:08:54] In the last five years, last five fiscal years if you look at our average growth is about 3.3% and this past year I think depending on you look at IMF or ADB or bank it's 3.7, 3.1 for this current fiscal year. For the next one 4.8, 4.9 is expected.
[00:09:12] Our budget expects 6% right? 6% would be fantastic. I think our potential growth rate is about 5% but if you want to raise the potential of course we have to work on those other things I mentioned at the very beginning right? So the growth, the reason why
[00:09:26] this indicator is so critical is that if we want to be like Bangladesh, Bangladesh per capita income it's about 2,400, 500 right now. More or less double than ours right? If you want to get to that point for the next 10 years we have to grow at 7% per year
[00:09:43] which we have managed only once two consecutive years after the Gorkha earthquake, the reconstruction, that's it. Otherwise we have never achieved 7% growth rate. So imagine that like we to get to a place where Bangladesh is it takes us 10 years of strong
[00:09:58] growth. To get to where Sri Lanka is it takes us about 20 years of strong growth. So when you hear people say you know oh by exporting electricity or by getting some things correct infrastructure wise that we're going to have achieve strong growth, we'll achieve better
[00:10:14] growth but there's a lot of work that needs to be done and we are so far behind that one year of 7%, two years of 7% is not going to get where we want to be. So this is very important
[00:10:26] and the reason why I talk about economic growth is that you know I spend close to a decade working on labor market issues at the International Labor Organization, did a lot of labor diagnostics you know different countries. I've looked at labor market across these types
[00:10:38] of countries high income, middle income, low income countries right? You look at all these countries there's a common factor that drives job creation, it's strong economic growth. There's nothing else, it's not the prime minister employment program that gives you employment,
[00:10:53] none of that stuff. Some political gimmick to attract workers or skill development initiative that's one-off, it's not thought through. So we really need to think about you know how do we achieve strong economic growth and there are a few things we can achieve in strong economic
[00:11:08] growth. Let's look at industries, let's look at high value services, let's look at manufacturing's role. So we have to focus on a few of these things and when I look at countries that have done well, they have done well in these areas.
[00:11:20] With that context check let us get started with the top line highlights of the budget. First let us begin by discussing its structure. It's actually very simple and similar to how households budget their income and spending. The only major difference being the number
[00:11:35] of zeros that go in the numbers. The budget consists of two separate forecasts, one on expenditures and one on income or revenue. Expenditures are divided into reoccurring capital and debt servicing and on the income side there are revenue estimates from taxes and
[00:11:52] where applicable a strategy to meet the revenue gap through domestic and foreign resources, grants, loans etc. So then what do we have for the upcoming fiscal year? Well the total forecasted budget stands to be at Nepali rupees 1.86 trillion, slightly under
[00:12:07] US dollar 14 billion. Of this 61 percent is allocated as reoccurring, 19 percent is allocated for capital expenditures and 20 percent for debt servicing. Around two-thirds of the total budget is forecasted to be met through internal revenue incomes i.e taxes and there is a one
[00:12:27] third resource gap meaning the government will need to mobilize external resources to grants and borrowing to actually meet its stated commitments in the budget. Here is Sameer again unpacking the numbers in the budget and what they mean.
[00:12:42] Broadly they make sense, just the numbers given how we have done in the past right. One aspect that I like about this budget is the recurrent expenditure you know they're sort of trying to make sure that this doesn't increase and there have been some limits
[00:12:55] that have been announced in the budget. This is very good so in that sense you know there's nothing that stands out that oh this is unusual right. Debt servicing okay but you know
[00:13:04] debt serving servicing in terms of trend it's been a huge increase I will give you that but as a share of as a share of GDP or you know given the size of our economy it's really not
[00:13:14] that much of a concern just yet. In terms of you know the capital expenditure or recurrent expenditure that also more broadly makes sense to me if you look at the recurrent expenditure you know some of the items there are social security, grants, subsidies,
[00:13:27] you know compensation something that you know nothing really stands out. Grants it's a bit of I think there was some debate over that in the parliament also today. In terms of capital
[00:13:35] expenditure there is a lot of focus on building public buildings as well I guess we are trying to get our new parliament building ready as well right so that contributes to it as well
[00:13:44] I think. So yeah just looking at the numbers I don't mean on the revenue side it's slightly more optimistic than out of thought otherwise it's okay growth projection also optimistic given our performance. But just looking at the budget from the revenue side it's almost
[00:13:59] been a systemic challenge for the Nepal economy that we don't meet our revenue targets. How much of that revenue base looks realistic and achievable given our past performance especially last year? Well it is ambitious it is ambitious our revenue targets but it could be possible
[00:14:18] to achieve the targets when you look at revenue right you need to have an economic base. You need to increase the size of the economic pie so to speak to collect higher
[00:14:28] revenues and a lot of times I think we are focused on not really raising the size of the pie right so for example you know most of our revenue close to 50 comes from customs related
[00:14:41] revenue even you know customs tax import tax also import duties and then that also adds to it I think when you add all of that up you kind of get close to that 50 percent
[00:14:51] mark and there our tax administration has improved tremendously in the last several years and I'm aware of some of the reforms that they have done in the customs aside as well. So yes our revenue
[00:15:02] collection has improved in the last several years as you know a few years ago is over 20 percent 22 percent of share of GDP right tax share of GDP and I think it went down to 16 now it's
[00:15:13] picking up again for a country at our income level that is pretty remarkable that we are able to collect that amount of taxes. When I look at the recent budget announcement income tax has
[00:15:23] gone up also for some groups as well right and the other taxes that have gone up as well I have to look through it closely but there are some other taxes have gone up. I think one thing
[00:15:32] that our authorities should keep in mind is that you know you cannot hope to grow by taxing your citizens wherever you can right because it's sort of like taxes are a disincentive
[00:15:43] for work for economic activity for all of that right so this is we have to do this in a more of a careful way I think we have become very reliant on of course you know it's very important
[00:15:54] for us but what has happened is I know the finance ministers when they come to the office and when they leave they talk about how well they did in terms of collecting revenue they
[00:16:03] use that as their mark of success and to me that has always sounded really strange you know a finance minister bragging that he managed to collect this much revenue from businesses right I would love to see a finance minister bragging about the jobs that
[00:16:18] they have created businesses that have been established under their tenure foreign investment that have come in during their time you know I would love to see that as a bragging point not how much revenue you have collected so this is something that you know
[00:16:31] it's more fundamental. So when you look at the composition of our taxes right so the share of custom and total revenue this has of course this is an important share but you if you look at
[00:16:41] the income tax income tax has also gone up you know it used to be very so for example even in 2050 become somewhat for example it was like around less than eight percent income tax as their total total tax revenue total revenue and now it's about 25 26
[00:16:59] percent right over the years this has really gone up so we've been even the income tax usually income tax collection of course the tax administration is not as as good at collecting
[00:17:08] income taxes but they're better at customs and vat and all of that vat of course is very important still to this day it's very important about 30 percent of vat you know so on income I
[00:17:19] think what has happened is that somehow I mean you know of course it takes a bit of homework to come up with the tax rates and all of that but I think what I would actually suggest
[00:17:27] is to lower maybe even the tax rates especially when it comes to income and then maybe make it easier to file income taxes or you know make it more not as regressive as I think it is sometimes
[00:17:37] you know so make it this is something that one needs to look at more carefully but I generally tend to agree that you know there are too many taxes in this country and I think it's basically
[00:17:48] reflective of the fact that our production base our home production base is not that big right so we have to come up with ways to to run the country right so the revenue runs
[00:17:58] the country so we have to actually tax our citizens and I think in the budget even the minister actually said we need to shift away from this you know remittance customs based sort of economic model towards more domestic production where we tax businesses that are operating here
[00:18:15] creating jobs you know creating products and services that people want to buy right so we want to move there but somehow we haven't been able to do this and also it's you know it points to our private sector is not very competitive it's relatively small
[00:18:29] you know there are very few firms that with more than 20 employees 18 I think last time I checked so you know it's very largely informal you know they're not competitive they don't make products that they can sell in the global markets and compete with our with our regional
[00:18:44] and global competitors right so so there are many issues like that I think we have to we have to take it in that context we have to understand the context when we talk when we talk
[00:18:54] Moving on to expenditures beyond the money that needs to be spent to keep the government running and pay for its debts there isn't much the government actually allocates to begin with these are capital expenditures and this year they've been budgeted at Nepali rupees 352
[00:19:09] billion or only around 19 percent of the total budget this is the budget that the government spends to build new things houses building bridges etc the good thing however is that the allocation this year on this heading is up 50 million from the last year but this allocation
[00:19:27] is in fact highly nuanced to begin with it's only a modest allocation and interestingly these two the government habitually fall short of actually spending and in the event of short falls in resources for the budget this is the allocation that tends to take the first hit
[00:19:44] so you get the picture there is a commitment for expenditure but it is not fully spent and usually stricken out of the budget very easily moreover this is a category dominated by large infrastructure projects what you essentially end up with in the budget is a capital expenditure
[00:20:01] pool consisting of fast number of inadequately resource projects and initiatives across all imaginable sectors while this is not ideal it is unavoidable let us not forget the budget also a political policy document unfortunately expenditures tend to be more fragmented when
[00:20:22] the politics is also fragmented and this is exactly the case in Nepal this year's allocations like last year remains a mixed bag some commendable and new initiatives a bunch of necessary and unavoidable ones a few half-baked ideas and copied from elsewhere ideas several
[00:20:40] usual repetitions some questionable inclusions and some that are outright controversial there are other categories i've missed those that are funny and many that have been placed there just for optics but we will not discuss these today the proof is in the pudding maybe
[00:20:57] six months into the year we'll know how much progress there is across all of these different allocations instead i want to focus today on some rather interesting observations and mentions in the budget to begin with priority one in the budget this year is not where to spend but
[00:21:15] economic reforms and promotion of private sector the budget calls for the conceptualization and implementation of a new wave of economic reforms in the country the broad scope of these reforms will relate to institutions investment climate public finance management the financial sector
[00:21:34] and public administration i probe these inclusions further with samir so second generation reform sounds very nice and i'm all for it but are we you know will we manage to implement some of those reforms can we get get acts through the parliament
[00:21:50] and can we come up with the implementation guidelines in time to to have to see some impact right so this is something that will be very important i think and you know they are going for you know sort of the improving industrial and business
[00:22:01] environment and i think this is very encouraging there were several items in the in the budget that that that was focused on this and they also realize the role of industrialization even the manufacturing sector it services tourism of course always is there energy you know agri-business
[00:22:17] or you know everything that sounds very good so i i kind of want to see them see the impact because otherwise you know it's actually very easy to come up with these things to be honest
[00:22:27] with you if anybody who has worked in different countries has looked at economic performances you know you can come up with 10 different things reforms you can put together put in a nice piece
[00:22:36] of paper you know and make an announcement but that's not how things actually get done right so i would like to see that translate into actual action our macro fundamentals have been
[00:22:47] just a bit of an off-kilter you know it sort of hasn't been in the right place for the last 10 15 years if you wanted to make money in napalm there's two ways you could do it
[00:22:56] one is you and you would invest in real estate second would be you you import goods from outside you sell it at a markup in napalm so in these two areas where people made money and to some
[00:23:11] extent they are still making money in these two spaces when the government put restrictions for import of cars i remember to to save on the foreign exchange reserves and there was hue and cry about all jobs are being lost in the auto sector and i remember look
[00:23:26] you know looking at the news and thinking i didn't realize we were assembling cars in napalm but of course we weren't right now honday for example is trying but otherwise we're not adding
[00:23:35] any value we're just marketing it here selling it so that is not the type of economy that we want we want to be able to produce some here even though why aren't we able to tell
[00:23:47] firms that sell their goods here if you want to sell your your products in our country you have to manufacture at least 30 percent of them here why can't we say that we are finally starting
[00:23:58] to do those things like in and the motorcycle you know roland phil is now being assembled in napalm that's good news but why weren't we able to do that 15 years ago you know we it's not like we became import dependents overnight and all of a sudden
[00:24:12] we're figuring these solutions out right so these solutions were always there we have you know we have so we have allowed our economy to go off track for a long time and now we wonder why we can't
[00:24:21] create jobs while young people are leaving because where do the jobs come from the jobs come from you know assembly plant auto assembly plant that honday is putting together that's where the jobs come from engineers from poultry engineering campus or somewhere else can get a
[00:24:34] job there i think here what has done a lot of damage to our economy is also chronic political instability the latest water bank enterprise survey i just did some analysis based on that for our country diagnostic study that we were preparing 41 percent of the firms still
[00:24:51] say political instability is the main factor right access to finance electricity these things come a distance second third fourth you know at 12 nine percent of firms saying that so political instability has really contributed to this situation where you know political instability
[00:25:09] has led to policy instability policy uncertainty and when that happens it's very hard to do business in a country right so say for example you may you manufacture motorcycles you make a deal with the government okay i'm going to manufacture these many motorcycles i need 1000 workers
[00:25:27] in my factory here close to butual or wherever you're establishing it and then you come up with some incentives you get fiscal incentives from from the province or from the central
[00:25:35] government you set up shop next year some finance minister comes along and says no no i don't want to give you that fiscal incentive or says where is my cut of the deal right and this is a
[00:25:46] situation we are in right so how does a business function like that so you know and the thing in a weird way i think you know to be honest with you the folks who have been
[00:25:56] at the helm of policy making who have been making our economic policy perhaps sometimes haven't really understood what creates jobs what drives growth because you know even when i look at our discourse i find that we tend to vilify we turn them turn businesses into demons
[00:26:13] you know they're not our friends we don't see them as our partners in development which is really a sad situation to be honest because you know if anything and the government doesn't create jobs it creates a minimum of a small number of jobs even scandinavia in this case
[00:26:28] scandinavia and 25 25 percent of the economy is probably public sector but the rest of it is private sector right some of the largest private firms are from scandinavia ikea great example no so the thing is what has happened is that over the years our political discourse
[00:26:44] has always vilified private sector private sector performance achievement right and we have terms in napali that's that's not nice aimed towards businessmen and you know i don't come from a business family my parents didn't engage in business but as a student of economics
[00:27:03] i always understood the role private sector plays right you don't have to be a you know psd economist some fancy degree from somewhere right you you open economics 101 you you realize private sector development is very important for our country's prosperity why haven't
[00:27:20] we understood this if you look at our bureaucracy what has happened in our bureaucracy is that you know a lot of people recently had this incident with the joint secretary in one of the ministries
[00:27:30] where he had gone through exams to get to where he is right i asked him what are you ever asked in your loksava exam the role of private sector in a country's growth economic
[00:27:39] performance he said oh not exactly and i did and i asked him a few more questions about along these lines you know it's amazing it's amazing so you have people in governments who don't have neither the understanding of what drives economic growth are making policies for our country
[00:27:58] so people guiding them providing them vision somehow also many of them maybe perhaps don't understand that and i think that has really led to this situation because you know the market in nepal is not that small we're not a bouton you know we're still a 40
[00:28:13] billion economy you know 45 billion and you know we're marching towards 100 some people talk about 100 billion economy nepal right so the market is not that small and how many bicycles get sold in
[00:28:23] nepal how many shoes get sold in nepal right so we should be how many tvs how many computers so many but we do sell many of these in our market so i think we can still leverage that
[00:28:33] maybe not like india and china does now india can tell apple invest 500 million into my economy if you want to sell iphones we cannot say that to apple well maybe we can say just
[00:28:44] another company right uh something a bit less less difficult to achieve hearing samir i ended my conversation with him exploring if the budget enthuses a nepali economist like him and whether we are progressively seeing a shift in economic thinking and planning
[00:28:59] this is what samir had to say yeah you know it the budget did sound very nice and good and it's aspirational more importantly it shows that maybe we are coming around to
[00:29:14] to a consensus on a few things that are key for economic growth right and job creation economic growth and one of them being you know the role of entrepreneurship industrial development right because some of the programs are listed underneath it you know the even the economic
[00:29:32] triangle in a bar at put 12 pokhara the economic triangle that's one example of that right people are realizing that's important and as you said earlier of course we have seen this in other parts of developing asia you know but has there been homework done that's a different
[00:29:46] story right similarly when you look at you know the reforms that they are going to carry out to increase capital expenditure another good aspect of the budget and i hope that those do get done doing business environment they want to improve that you know that's also
[00:30:04] a very good thing right as i said but of course the infrastructure aspect is also important and even on the infrastructure side they have you know come up with specific measures to sort of promote completion of projects on time right there's besides the rastya gore projects there's
[00:30:18] other projects where i think there's you know the some some time limits in terms of what contract awards disbursement for projects so i think that's also very encouraging because they're coming around to the fact that those things are very important right and having
[00:30:33] no change in leadership at the project management unit level so these things are there in the budget so those are very very encouraging but you know there are certain aspects and and
[00:30:43] so i would have to commend the finance minister for these for these few things that he has included and the sector focus you know i generally agree with them some of the broader
[00:30:54] objectives i also agree with them but you know when i look at why projects don't get done on time you know this is a perennial issue in nepal you know one aspect that it does try
[00:31:04] to address this also the civil service you know civil service they want to reform the civil service i don't know how if they will manage or how they will manage because you know this constant movement of people across ministries it doesn't help doesn't help us at
[00:31:17] all you know there's no institutional memory so it's very difficult to get projects done on time the inter-ministrial coordination becomes much weaker which is critical for for implementing projects on time you know the coordination aspect is is very critical you know and the
[00:31:32] other thing is also i mean so those are nice things in the budget right so when it comes to foreign investment you know there's one one piece of evidence i recently heard that one of
[00:31:41] the factors that foreign investors don't like to come to nepal is you know they this contract risk you know sort of contract enforcement yeah they don't they don't they don't think the contracts
[00:31:51] will be enforced and this is something you know it's we have to address this right is it our judicial system that's weak you know when it comes to commercial disputes we need to address
[00:31:59] this as well so as you can see you know it's not just procurement right it's also a legal system our project management ability supervision and regulation monitoring and evaluation all these things are so important to really you know to to implement the budget so i hope there's efforts
[00:32:18] in that area as well but you know just looking through it skimming through the the budget some of the focus it's all in the right direction making nepal i mean you know music to my ears
[00:32:27] really you know of course you know they maybe might have copied it from india made in india right under under moldy i don't know how much homework that was done like if somebody
[00:32:35] were to ask folks who wrote that making a make in nepal how many products do you make in nepal that that are competitive or that are good you know can they give a list you know so this
[00:32:43] is something that's very important right we need to do that bit of a homework not just have slogans and usually we know we have this habit of celebrating when budget is announced that oh
[00:32:52] such nice things were in the budget you know i would actually suggest to to sort of you know nine months later ten months later to see how it's being implemented and that's when
[00:33:02] you really can see you know what the budget managed to do or not do so the next interesting observation on the budget was the framing on the transformative sectors the budget has identified five namely agriculture energy information and technology development tourism promotion and
[00:33:23] finally entrepreneurship and industrial development and do people in these sectors really see the budget walking the talk we talked to experts from these relevant sectors and this is what to say the policy and program of this fiscal year announced for the investment decade for
[00:33:43] agriculture that was dr yamuna ghali a food security and agriculture sector expert but on the contrary the budget the total volume of the budget for the sector has been decreased compared to even last year this current fiscal year the agriculture sector is the one which
[00:34:01] is the most federalized sector and the schedule eight of the constitution has given the rights to the local governments especially exclusive rights for the local governments especially for agriculture services including food and nutrition security and also land management
[00:34:19] cooperatives management and many other details but if you look into the budget that doesn't give that kind of impression thing specifically is that the huge challenge of outgoing of youths from the country as well as from the sector because everybody is trying to
[00:34:37] come out of agriculture sector because you are not very impressed with the agriculture sector and there the budget is not very responsive in making sure that youths will be retained in agriculture interestingly the amount of the budget that
[00:34:55] they have allocated for the chemical fertilizer has increased and we know how the chemical fertilizer import process has been dealt by and then how the farmers are struggling to get those fertilizers and then now just by increasing the budget doesn't make sense because it's not
[00:35:12] about the budget it's about the total management system of the agriculture inputs management so only increasing the budget doesn't make much sense is one thing the second thing is in the given context of climate change and also in the given context of federalized context where
[00:35:30] the local governments are very much responsible for adapting their local climate culture and the food habit specific farming system the priority should have been more towards organic or towards healthy soil towards watershed management towards clean energy promotion kind of sector
[00:35:50] that should have been promoted than investing on chemical fertilizer as a major input so this is where i see a lot of contradictory and which will have a long-term impact on soil health and it has a comprehensive impact on the food system
[00:36:07] I am Bhim Gautam, I am the head of the Ipan Institute of Free Energy Development It was expected that the budget would provide additional momentum to the sector especially considering recent developments on power trade and the need to facilitate investments to meet
[00:36:27] the targets set by the government to generate 28 500 megawatts by 2035 the government is likely to add to the national grid the stated 900 to 1000 megawatt capacity by next year however it is unlikely to meet targets around realizing the major reservoir projects like Budi gandaki
[00:36:46] and Nalsingar these slogans have been continuing across several budget cycles the key challenge has been around implementation and this for the sector means securing financing for the projects being discussed this is highly uncertain and extremely challenging the budget
[00:37:02] does not look overly pleasing from the perspective of the private sector who are the key players in the sector while there is some mention of private sector role in the transmission and distribution this is somewhat of a long process the immediate interest for the private sector
[00:37:16] is on incentives for expanding generation as well as facilitating trade however the budget does not sufficiently address these issues it is not speaking on the role of the private sector on electricity trade is a major disappointment and the loss to the sector is
[00:38:02] the budget also extensively talks about the development of the IT sector I reach out to Sikshit Bhatta a fintech entrepreneur and he had some interesting comments around complementarities between the IT and the energy sector this is what he had to say
[00:38:18] I think we need to think in in terms of in terms of energy even if we are talking about IT so what the government has done in this particular budget is I think it has
[00:38:33] raised the expectations of public that we're going to export so many billion worth of IT work out of Nepal I think the kind of IT work that the government talks about is particularly skills like coding and engineering
[00:38:55] but when we speak about the existing times and the way we are making a transition into artificial intelligence I think most of the skills on which we have hedged our bet would be obsolete in next five years so where should we focus is a big question
[00:39:18] and I think our focus should be on on how we can use our energy if you're looking at the at the world for next 10 15 or 20 years down the line either the world would be filled with data centers or solar arrays because there
[00:39:36] will be a lot of energy that would be consumed to do this task right so when we're talking about the government creating jobs for IT sector where they could code and send the skills abroad
[00:39:51] I think those codes would be done by machines and those machines would be the industries of the fourth industrial revolution and the industries of the fourth revolution industrial revolution would be the data centers I think it is about right time for our government to invest itself
[00:40:12] seeking these opportunities where the enormous amount of energy we can produce is not only sold to our neighbors to light up the households or power their industries of the industrial revolution that are producing physical goods but I think it is about time where we seek partnership and
[00:40:35] develop policies and separate budgets to use this energies to have these companies come in and invest in their fourth generation industry which is the data so we need to think in terms of energy and data that's that's something that you know I would wish for or at least
[00:40:54] I would allocate a certain budget or at least I would initiate these kind of conversations Thank you for tuning into yet another episode of Power to IPI. This episode was produced by Samitra Niyopane with support from Nirjan Rai, Khushi Hang and me Ridesh Apkota. The
[00:41:15] episode was recorded at PEI studio and was edited and sound designed by me Ridesh. If you haven't subscribed to our podcast you can do so at Spotify, Apple Podcasts, YouTube or wherever you listen to Pods by PEI. Thank you again from me Ridesh we'll see you soon
[00:41:32] in our next episode