Govt to unveil please-all budget
KATHMANDU, JUL 14 -
When Deputy Finance Minister and Finance Minister Bharat Mohan Adhikari presents next fiscal year’s annual budget on Thursday afternoon in the Legislature Parliament, he would be reading a document that tries to address larger political constituencies besides pertinent challenges in the economy.
As in the past, budget size has increased by 20 percent. So has the revenue target. With civil servant salaries going up by 20 percent, recurrent expenditure has touched Rs 210 billion, with Rs 148 billion earmarked for capital expenditure.
Given the political equations, Adhikari has to please coalition partner UCPN (Maoist) and he also has to address opposition parties mainly Nepali Congress and Madhesi parties. Hence, the next budget would end up being a please-all document. Even Adhikari admitted this during his meeting with Foreign Minister Upendra Yadav on Wednesday when he said demands of parties were more or less addressed in the budget.
Finance Ministry sources say the budget has programmes that have been agreed on with the major parties. “Major parties’ pet projects are incorporated in the budget,” said a high level official at the ministry. Hence, the budget risk of being a distributive one. Addressing the Maoist demand, the budget has allocated Rs 2 billion to provide Rs 200,000 to the kin of each conflict-hit families. Another Maoist pet project, Youth Self-Employment has been revived.
Former Finance Secretary Rameshwor Khanal says if programmes have been included in the budget without clear objectives, it would not contribute much to the economic growth. The proposed salary hike, according to Khanal would end up increasing consumption which currently stands at 93.3 percent of the Gross Domestic Product (GDP). “If the budget does not come with programmes that help in increasing productivity, salary hike would end up fuelling inflation and consumption,” said Khanal.
The budget has allocated sizeable resources for education, infrastructure, health and energy sectors. Finance Ministry sources say Rs 64 billion is earmarked for the education ministry, Rs 40 billion for physical planning ministry and Rs 25 billion each for the health and energy ministries. The budget has allocated sizeable resources to national projects. The government has increased the budget for energy sector by almost double, earmarking Rs 25 billion. The budget will talk of starting feasibility study of over a dozen hydropower projects apart from establishing Power Trading Corporation for inter-country power trading.
Given last three years’ experience and the current economic scenario, experts say if the new budget comes up with policy measures to address liquidity crunch in the banking sector and governance, it will restore overall confidence. Khanal says the budget need not be ambitious. “Timely budget presentation itself will do wonders,” he said.
Source: Kantipur
When Deputy Finance Minister and Finance Minister Bharat Mohan Adhikari presents next fiscal year’s annual budget on Thursday afternoon in the Legislature Parliament, he would be reading a document that tries to address larger political constituencies besides pertinent challenges in the economy.
As in the past, budget size has increased by 20 percent. So has the revenue target. With civil servant salaries going up by 20 percent, recurrent expenditure has touched Rs 210 billion, with Rs 148 billion earmarked for capital expenditure.
Given the political equations, Adhikari has to please coalition partner UCPN (Maoist) and he also has to address opposition parties mainly Nepali Congress and Madhesi parties. Hence, the next budget would end up being a please-all document. Even Adhikari admitted this during his meeting with Foreign Minister Upendra Yadav on Wednesday when he said demands of parties were more or less addressed in the budget.
Finance Ministry sources say the budget has programmes that have been agreed on with the major parties. “Major parties’ pet projects are incorporated in the budget,” said a high level official at the ministry. Hence, the budget risk of being a distributive one. Addressing the Maoist demand, the budget has allocated Rs 2 billion to provide Rs 200,000 to the kin of each conflict-hit families. Another Maoist pet project, Youth Self-Employment has been revived.
Former Finance Secretary Rameshwor Khanal says if programmes have been included in the budget without clear objectives, it would not contribute much to the economic growth. The proposed salary hike, according to Khanal would end up increasing consumption which currently stands at 93.3 percent of the Gross Domestic Product (GDP). “If the budget does not come with programmes that help in increasing productivity, salary hike would end up fuelling inflation and consumption,” said Khanal.
The budget has allocated sizeable resources for education, infrastructure, health and energy sectors. Finance Ministry sources say Rs 64 billion is earmarked for the education ministry, Rs 40 billion for physical planning ministry and Rs 25 billion each for the health and energy ministries. The budget has allocated sizeable resources to national projects. The government has increased the budget for energy sector by almost double, earmarking Rs 25 billion. The budget will talk of starting feasibility study of over a dozen hydropower projects apart from establishing Power Trading Corporation for inter-country power trading.
Given last three years’ experience and the current economic scenario, experts say if the new budget comes up with policy measures to address liquidity crunch in the banking sector and governance, it will restore overall confidence. Khanal says the budget need not be ambitious. “Timely budget presentation itself will do wonders,” he said.
Source: Kantipur
