Nepal increased spending on health infrastructure in its annual budget unveiled on Thursday to stop the spread of the coronavirus and introduced measures to revive an economy that depends on tourism and remittances.
Finance Minister Yuba Raj Khatiwada set aside $748.57 million for the health sector, a 31.8 per cent hike from the previous year, in the budget for new fiscal year that starts from mid-July.
Of this, he allocated nearly $50 million to improve facilities to fight the pandemic.
“The main objective of the budget is to protect people from all health related risks, including the coronavirus,” Khatiwada told lawmakers in parliament.
Nepal’s $32 billion economy, which grew by an average of 7.0 per cent in past three years, was projected to grow by 8.5 per cent in the current fiscal year ending mid-July.
But the government lowered the forecast to 2.3 per cent this week due to the outbreak of COVID-19, which has so far infected 1,042 people and killed five in the country.
Khatiwada said more than 50 per cent of the total outlay of $12.16 billion would be raised from revenue collection and foreign grants, leaving a deficit of $4.33 billion to be met from internal and external loans.
Nepal does not have any international commercial borrowing.
In recent weeks tens of thousands of Nepalis facing job losses returned to the country amid fear of infection abroad.
Khatiwada said new jobs would be created as thousands of migrant workers expected to return to agriculture.
“Food for work in infrastructure projects will be implemented to create jobs,” he said, adding a work permit system will be enforced for foreign workers to protect jobs for the locals.
Khatiwada made no major changes in taxes but imposed austerity measures by slashing spending on international travel, and instead encouraged domestic tourism by requesting nearly 100,000 civil servants to travel within Nepal.
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