Budget 2013/14: What We Recommended To The Finance Minister

Ministry of Finance. Photo Source: EKantipur.com/ Kantipur Media

Ministry of Finance. Photo Source: EKantipur.com

A few weeks ago, an opportunity presented itself: the Finance Minister, Shanker Prasad Koirala, requested for recommendations on what should be included in the upcoming budget being announced on this month. To make the most of the opportunity, and to follow up on our policy-actions we had suggested on World Environment Day, we submitted a letter with a series of issues and actions for the government to consider in the upcoming fiscal year.

The Minister, who has publicly assured a ‘development oriented budget,’ formally received the document about three weeks ago. His office has expressed keen interest in the letter’s content as well as assured us they will give the recommendations a serious consideration.

The short list is a reflection of the issues that needs immediate attention and committed investment. It, of course, could be longer and more comprehensive. But with limited time in hand, and a vast number of issues to touch on, we distilled the our recommendations down to what Nepal could achieve both in the short-medium and long-term; something we believe could be a foundation to build upon in Nepal’s future budgets for the country’s sustainable economic growth and development. These are also issues that by no logic should find political opposition.

Below, an edited version of our recommendations. They are our recommendations for investment in science and technology, through the prism of sustainable development, using urgent issues that need to be, and can be, addressed immediately. What, if anything, makes it to the final budget we will know on soon. (Order of list does not imply priority.)

#1. Enabling Sustainable Management of Groundwater in Nepal:

A hand-pump in eastern Terai.

A hand-pump in eastern Terai. Photo: Kashish Das Shrestha

Groundwater extraction remains a primary form of water supply for both drinking and irrigation across Nepal (read what we wrote about this on World Environment Day this year here). However, majority of the extraction is done in an unplanned and an unsustainable way without understanding the actual availability of this limited natural resource. Once it finishes, “its virtually impossible to replace groundwater.” This is why it is important for the upcoming budget to incorporate the following:

  • Conduct a national survey of ground water levels. – Mandate and develop groundwater recharge systems for all municipalities in the country.
  • Consult with Municipalities and other relevant bodies to find a way to subsidize private residents who want to install rainwater harvesting systems in their homes with the precondition that it include a component to recharge the Municipality’s groundwater levels.
  • Replicate the Shivpuri Watershed Project in other hill forests around the Valley, namely Nagarkot, Phulchowki, and Chandragiri, which experts have identified as having the potential to provide the same ecological services as Shivpuri does.

#2. Tax Exemption for Electric Vehicles (EVs):

A Nepal Oil Corporation tanker bringing supplies to a petrol pump during the fuel crisis of earlier this year. Photo: Kashish Das Shrestha

A Nepal Oil Corporation tanker bringing supplies to a petrol pump during the fuel crisis earlier this year. Photo: Kashish Das Shrestha

There is an urgent need to shift Nepal’s dependency on fossil fuel for vehicles, our largest commodity import, to domestically produced electricity for the sake of national economic and public health interests. Apart from its dangerous contribution to the national trade deficit, traffic air pollution is now a serious health hazard in Nepal’s urban centers and is only expected worsen under current trends. To reverse or mitigate this trend, the Government must:

  • Remove all taxes currently levied on all forms of EVs.
  • Develop cash voucher for Solar Powering EV:
    The Finance Ministry must begin work on developing a cash-voucher for all citizens who plan to buy an EV with a Solar Power system designed to power that EV. These solar power systems come with a 10 to 15 year guarantee. Considering that the Solar Power system would offset at least 10 years of petrol or diesel needs for the vehicle owner, the Government must cash subsidize at least 5-years worth fossil fuel costs that would otherwise be incurred by the Government for that vehicle.

#3. Air Quality Monitoring:

Smokey Horizons: Brick Kilns where farmlands once used to be in Kathamndu, 2013. All Photos: Kashish Das Shrestha

Smokey Horizons: Brick Kilns where farmlands once used to be in Kathamndu, 2013. Photo: Kashish Das Shrestha

What is the value of fresh air, and what is the value of understanding the quality of air we are breathing? Air quality is at the forefront of many countless health issues. For Nepal, it is also a critical issue related to maintaining the country’s brand as a Nature / Eco Tourism destination. And as we as a nation move towards trying to achieve greater economic growth and mobility, it is fundamental to understand what that aspiration means for something as basic as the air we breathe.

  • Invest in monitoring, and documenting Nepal’s air quality by setting aside a budget not only to extensively install state of the art air quality monitors in Kathmandu, but in various other locales such as major and emerging urban centers, Municipalities, and District Head Quarters. Ensure this budget includes potential costs of a permanent team as well as part-time team members that will be needed to operate, monitor, and maintain the equipments, as well as the cost of orienting and training them, and other similar expenses.
  • The budget should incorporate maintenance costs too. The monitors should therefore come with a rollover or an accumulative maintenance budget that could be transferred to the next fiscal year should it remain unused. It is important to note that these investments are not a one-time effort, but something that the nation needs to commit to for the long-term.
  • Maximize the investment in the monitors, the government must also seriously consider investing in digital billboards in all the locations where the monitors have been installed to constantly display the latest available data.
  • Ensure the monitors are able to do their work uninterrupted, the budget set aside for it should also include the installation of solar power backup that will enable the monitors to function with no power failures. That budget should also keep into consideration maintenance of such a backup power system.

#4. Enable Energy Trade:

With the upcoming budget, the Ministry of Finance must enable an environment to usher in an era of Feed in Tariffs (read about it here) with guidelines on Wheeling Charge for electric power transmission.

#5. Subsidize Transition from Diesel to Solar:

Using diesel generators like these as a source of electricity for several hours a day has become the norm in Nepal's urban centers. This one at a restaurant in Kathmandu, Photo: Kashish Das Shrestha

Using diesel generators like these as a source of electricity for several hours a day has become the norm in Nepal’s urban centers. This one at a restaurant in Kathmandu, Photo: Kashish Das Shrestha

Using Feed in Tariff with either an Energy Exchange Agreement of a Power Purchase Agreement, the government must subsidize those willing to replace their out their diesel generators with solar power. This is directly related to Nepal’s fiscal and public health, as well as energy security.  This policy proposal is outlined in detail here.

#6. Invest in Food Lab:

The Ministry of Finance needs to invest in enabling our Department of Food Technology and Quality Control to be a state-of-the-art facility with enough Human Resources to ensure the many essential consumer products in the market are not threats to public health. This is a serious task, and the Department should be able to conduct that responsibility rigorously with the full support of our Government. The Department should be able to monitor not just domestic items but also imported products. It should be able to broaden its scope from products like dairy to vegetables and fruits all year round. Currently, there is a dangerous gap of knowledge on what Nepalis are consuming.