29 years ago today, on 26 Ashad 2054, it had been 8 years since the multi-party system was achieved. Currently, the country's annual budget is 19.5 trillion, while at that time it was 62.2 billion 22.94 million. At that time, the annual budget had not even reached 1 trillion.

The main priority of the budget presented by Rabindranath Sharma, the Finance Minister of the government led by Lokendra Bahadur Chand with the support of the UML, at the joint parliament meeting in Singha Durbar on 26 Ashad 2054, was to strengthen the liberalization and marketization of the economy, which is still ongoing. Although the size of the budget was small, development expenditure was more than ordinary expenditure.

40 percent of the budget presented by Finance Minister Sharma was based on foreign loans and grants. A deficit of 5 billion was prepared in the budget of 62 billion, while the opposition claimed that the development budget had been reduced compared to previous years. The budget announced the establishment of a poverty alleviation fund of 40 million. The budget target was to make development village-oriented. But the question was how to alleviate poverty with 40 million.

Interest payment and development expenditure

Finance Minister Sharma had allocated 34 billion 388 million 48 thousand for development expenditure and 27 billion 983 million 46 thousand for general expenditure. If we compare it with the fiscal year 2082/2083, it can be considered positive that development expenditure was higher than general expenditure at that time.

Currently, there is about 12 billion 19.5 trillion in general expenditure in the budget. About 21 percent has been allocated under the development budget heading for the current year. For the fiscal year 2054/2055, Finance Minister Sharma had allocated 8 billion 169.7 billion annually for loan principal and interest payment only. The government had given an explanation for the increase in general expenditure in that fiscal year due to an average increase in employee salaries of 13 percent and a large amount of money being spent on principal and interest payments. Of the total budget, it was estimated that 34.85 billion 24.71 billion would be received from revenue and 15.54 billion 254 thousand from foreign aid.

Priority given to power projects

The budget gave priority to the construction and electrification of power projects. Budget was allocated to complete projects like Kaligandaki 'A', Puwa Khola, and Modi Khola on time.

The budget prioritized the construction of transmission lines and rural electrification. The target was to provide electricity service to 35,000 customers in that fiscal year. At that time, the private sector was attracted to the construction of power projects. Domestic and foreign private investors had entered Nepal.

Ambitious revenue target

Finance Minister Sharma had set an ambitious revenue target. However, some tax rates were reduced. The budget made it mandatory for those who have a bank deposit of 5 lakhs and drive a vehicle worth more than 1 million to obtain an income tax certificate. Similarly, an overdraft facility of more than 1 billion from Nepal Rastra Bank was not available.

Excise duty on cigarettes and alcohol was increased, and the budget announced a 15 to 40 percent excise duty on vehicles manufactured in Nepal. Vehicle customs duty was reduced from 110 percent to 80 percent, and excise duty on televisions and bricks was abolished.

Opposition's opposition

Opposition parties criticized the budget for setting ambitious revenue collection targets and reducing the development budget. Economists called the budget a 'technical budget presented by a non-technical person'. Reminding that the country is undergoing the Ninth Five-Year Plan, the opposition criticized it for not bringing a budget in line with it.

Former Finance Minister Ram Sharan Mahat had said that the revenue estimates made in the budget were artificial. He had claimed that the budget would increase inflation and increase prices. He was of the opinion that there was no novelty in the budget.