April 18, 2024, Thursday
Nepal 1:37:26 pm

RE in the Budget of FY 2079-80

The Nepal Weekly
May 31, 2022

Other than hydropower, EVs for Public transportation are elusive

By Purna N. Ranjitkar l

Finance Minister Janardhan Sharma has presented the Fiscal Policy which is popularly known as Budget of the Fiscal Year 2079-80 (effective from 16th July 2022 to 15th July 2023) in the Parliament on Sunday. The Budget for the FY 2079-80reflects the current economic scenario of the country, as Minister Sharma mentioned.

The size of the budget for FY 2079-80 is Rupees 1793.83 billion. Minister Janardan Sharma said Rupees 753.4 billion (42%) has been allocated for the current expenditure and Rupees 380.38 billion (21.2%) for the capital expenditure.    

Likewise, Rupees 230.22 billion (12.8%) has been allocated for the fiscal management as announced by the Finance Minister. A total of Rupees 429.83 billion (24%) is arranged for fiscal grant handover to the provincial and local governments.  

Rupees 1240.11 billion would be collected from revenue collection while Rupees 55.46 billion is projected to be received from foreign grant assistance, Minister Sharma had stated.  Likewise, Rupees 242.26 billion would be collected from foreign loan and Rupees 256 billion would be managed from the domestic debt.    

For the current fiscal year which is to end on July 15, 2022 the government had announced the budget of Rupees 1647.57 billion.    

In the present context, the inflation rate has reached 7.3% in the first nine months of the year 2078-79. The economic growth is expected to be 5.2% in this coming year.

This year, the fiscal policy has an objective to curb the economy as a production-based economy which would be an effort to establish more employment opportunities and to dispose of imports by increasing imports.

This year’s fiscal policy, as presented by the Finance Minister, aims to reduce the imports of vegetables, and food items by a minimum of 30%. For that, it has some plans for the development and upgrades in the agricultural sector.

Key allocations for in RETs

–   Green Hydrogen and Green ammonia-based fertilizers factory will be established in the collaboration with Investment Board

–   Induction stoves will replace LPG gases in Singhadurbar by Shrawan (mid July this year)

–   Similarly, all the local level governments will also be made LPG gas-free within the next 3 months; electrical stoves will be installed there

–   Local governments will provide free electric stoves to each family

–   The government will establish charging stations in 85 places to encourage the use of EVs

–   Nepal Electricity Authority will issue IPO at a premium very soon

–   Automated technology will be developed for measuring the pollution emission through vehicles

–   Every Nepali citizen will be provided with the access to electricity within the next 2 years

–   Electricity will be considered the major exporting product for improving international trade and decreasing the trade deficit

–   Rs 43.95 billion has been allocated for the development of electricity transmission lines and substations

Provisions for National Statistics systems will be developed so as to record all the data under a digital system. All the government officials will be provided uniforms made by Hetauda Garments Factory. Distribution of E-passport will be facilitated through local level offices. This year, the fiscal policy includes various popularity plans and slogans for the promotion of “Made in Nepal” and “Make in Nepal” campaigns. Similarly, emphasis has been given to the hydroelectricity sector. Likewise, start-ups and industries are also to be facilitated by some supportive policies are also introduced in this budget. However, commoners marked 15 per cent pay hike as an attraction of the budget.

The budget speech has given ample spaces for storage type hydropower projects to construct soon in future. In the current situation, the country has been able to generate 2200 MW of electricity as the installed capacity of the different plants. But most of the hydropower plants generate electricity around 30 per cent of installed capacity in the dry season. The most reliable solution to back up the gap of electricity generation is storage type of hydropower plants and efficient management of electricity generated by other technologies – mainly Solar PV.

The concerned ministers and other high authorities much frequently highlight the need of storage type of hydropower plants. But no steps have so far been taken to this effect. Moreover, the construction period will be eight to twelve years based on larger construction requirements.

Thus, electricity generation for self-sufficiency in before completion of construction of storage type hydropower, possible solutions should be worked out. Electricity generation by Solar PV in rooftop size to MW generating farms are the answer to this question. Therefore, the budget should have given an appropriate size of space to this aspect.

Rupees 108.6 billion allocated for energy and water resources. Out of the given figure 75.10 for energy, water resources and irrigation 33.5 billion prioritising storage type hydropower projects.

Moreover, electric mobility and cooking in electricity are the most sold agenda in Nepal which politicians, policy makers, professionals and common people are talking much to reduce use of fossil fuel, reduce environmental problems including air pollution and deforestation, support reduce narrowing the wider gap of balance of trade.

Electric vehicles for individual and institution uses are given tax relaxation to make affordable. However, the budget for the FY 2079-80 has introduced a hiked tax rule for importing EVs of expensive category. A provision also introduced for concessioned tax rule for vehicle assembly industries to establish in Nepal. It is not clear that components to be imported for conversion purpose have been made easier or not.

Moreover, the budget is silent on promoting electric vehicles for public transportation. Actually, the Finance Minister and authorities should have worked out on provisions and way outs for promotion of EVs for public transportation which can play significant role in consumption of electricity and public health mainly including other common features.