Biz community seeks a bigger budget

KATHMANDU, NOV 21 -

Though the government has averted an immediate economic crisis by introducing a two-thirds budget , economists and the business community say that another instalment of the budget will not give the much-needed dynamism to the country’s economy.

As the fiscal estimates come amid strong protests by the opposition parties, the private sector and economists say there is risk of further political polarisation, which will hit the implementation aspect of the budget . They say a full budget through broader consensus will always be a better option.

Even officials and leaders who were behind the budget making process are not so enthusiastic about the new estimates. National Planning Commission (NPC) Vice Chairman Deependra Bahadur Kshetri said it was just a “lame duck” budget brought out to give continuity to the old programmes and projects. “It will not help meet the new aspirations of the common people,” he said.

The budget , introduced with barely eight months left for the fiscal year to end, may not have a big impact on the economy, but it has surely ended the anxiety of civil servants, who were all but wondering if they would be able to draw their salaries.

According to economists, the government must now work on creating an environment conducive to smoothly implementing the budget . “This budget will only open ways to undertake the administrative job. The capital expenditure will further take a hit, which means development work will not get the momentum that is expected,” said Chiranjibi Nepal, an economist. “The need of the hour is consensus for a full-fledged budget .”

Though the Finance Minister said the budget will propel private sector investments, the sector, which says there is nothing new for them in the budget , does not seem much impressed.

Behind schedule by four months, the private sector is just relieved to have the budget , but is equally wary about the way the government introduced the fiscal estimates without taking the opposition parties into confidence.

“The presentation of the budget will give some momentum to economic activities, but it would have been better had there been an understanding among the political forces,” said Pashupathi Murarka, the vice-president of Federation of Nepalese Chambers of Commerce and Industries. Suresh Kumar Basnet, the chairman of Nepal Chambers of Commerce (NCC) echoed Murarka. “Chances of a tussle between the ruling coalition and the opposition over the budget are ever growing,” he said.

Bankers say the two-thirds budget will not have much impact on the banking sector. “It may ease the liquidity position of banks, but it will not boost the overall banking business,” said CEO of NIC Bank Sashin Joshi.

Chiranjibi Nepal

Economist

As this budget came without consensus, it will push the country to deeper crisis, both political and economic. Capital expenditure will decrease further, while inflation will go up due to the recurrent expenditure. Last fiscal year’s budget came when there was a Constitution Assembly (CA) and there was a fair bit of political stability in the country. But now there is no CA and political parties are polarised. Therefore, carrying over last year’s budget is ‘useless’ in the present context.

Dipendra Bahadur Kshetri

Vice chairman, National Planning Commission

It is just a lame duck budget to continue the old programmes and projects. It will not help meet the new aspirations of the people. Despite the failure to introduce a full budget , programmes like distributing poverty identity cards to the poor, load shedding reduction plan, Kathmandu road expansion drive and the mid-hill highway will not suffer a lack of budget .

Suresh Kumar Basnet

President, Nepal Chambers of Commerce

It is good that the budget has finally been introduced. But it would have been better had it been brought out on the basis of political consensus. There is a chance of a tussle between the ruling and the opposition parties. The  fact that the budget was introduced by sidelining the opposition parties may create problems in its implementation.

Jay Ram Lamichhane

President, Federation of Contractors’ Association of Nepal

Lack of a full budget without new projects will have a negative impact on the construction sector. No new project for a year means that 75 percent of the contractors will be affected by it. There are over 14,000 contractors across the country who are dependent on budget . Around 75 percent of the small contractors and 25 percent big contractors will be affected as they will have no jobs. The absence of a full budget will further increase the unemployment rate, force skilled workers to leave the country for employment abroad and also create a workforce shortage in the local labour market.

Pashupathi Murarka

Vice-president, FNCCI

We welcome the budget though it is a bit late. It will give momentum to the sagging economic activities in the country. The budget has opened a way for making capital and development expenditure. It is sad that only two-thirds of the budget has been brought out without political consensus.

Source: The Kathmandu Post