Focusing solely on the middle class and high-income groups will inevitably lead to increased inequality
Summary
Nepal's RSP-led government unveils a budget focusing on middle-class expansion and IT sector growth, raising concerns about rising inequality and insufficient poverty alleviation.
Key Points
- The budget shifts focus from poverty eradication to middle-class expansion and IT sector growth.
- Tax incentives favor higher earners, lowering top tax rates by 10%, while consumption taxes, including on electricity, rise.
- Experts warn this approach risks widening socio-economic inequality and increasing poverty, given 20% of the population remains in poverty.
- There are concerns about unrealistic revenue targets, reliance on internal borrowing, and insufficient prioritization and evaluation of infrastructure projects.
