Govt unveils Rs 236 billion budget: Capital gain tax increases to 15 %

Finance Minister Dr Baburam Bhattarai has unveiled a whooping budget of Rs. 236.15 for the fiscal year 2008-09 Friday.

Out of the total expenditure, recurrent expenditure is estimated as Rs. 128 billion 516.5 million, capital expenditure Rs. 91 billion 311 million and principal payment Rs. 16 billion 189.3 million.

This expenditure estimate is higher by 39.7 percent against the total allocation of Fiscal Year 2007/08 and 44.5 percent more than the revised expenditure. On the recurrent expenditure side, it increased by 40.6 percent and on the capital expenditure side, by 64.5 percent to the revised expenditure. The principal payment has been lowered by 1 percent against the revised expenditure.

Out of the total expenditure, Finance Minister Dr Baburam Bhattarai has proposed Rs.111 billion 824.9 million (47.38 percent) for general administration and Rs. 124 billion 199 million (52.62 percent) for development related programs.

For several years in the past, the government has substantially increased the general expenditure, which the new government gave continuity.

Addressing the constituent assembly session today, FM Bhattarai said government has given topmost priority to agriculture, water resources and tourism.

From the implementation of the proposed budget, government estimates that the Gross Domestic Product growth rate would remain at 7 percent at the end of current Fiscal Year. The growth rate in agriculture sector is expected to be at 4.5 percent and non agriculture sector at 8.3 percent. Inflation rate is estimated to be around 7.5 percent.

Likewise, Dr. Bhattarai stated that the remaining 5 percent of NTC shares will be sold through secondary market. Similarly, the prevailing Capital Gain Tax on listed securities transactions has been ammended from 10% to 15% both for individual & institutional investor by the finance bill announced for F/Y 2065/66. From this statement, stock market is expected to plunged down in coming week.