Next year budget through ordinance
KATHMANDU, MAY 29 -
Yet again, the preparation and presentation of the annual budget is being hit by political crisis. The demise of the Constituent Assembly (CA) has raised uncertainty about the timely presentation of next year’s budget.
In the absence of a legislature parliament, which dissolved along with the CA, there are no options but to presenting the budget through ordinance. “There are no alternatives to presenting the budget through ordinance, which remains valid for just six months,” said a senior Finance Ministry official. “The new parliament can bring a supplementary budget for the next six months.”
The budget was last brought through ordinance in November 2010 when the UCPN (Maoist) prevented the then Finance Minister Surendra Pandey from presenting budget for fiscal year 2010-11.
The current political crisis is also bound to affect the budget making process, major political parties still busy with blame game over the CA dissolution and new election. Finance Ministry officials say as major political parties, including Nepali Congress and CPN (UML), now demanding a consensus government, the budget may not be presented on time.
Even if the budget is presented, the government cannot introduce new programmes. All it can do is allocate budget for the new election and ongoing programmes. “The code of conduct of the Election Commission bars a caretaker government from allocating budget for new flagship programmes,” said the ministry official. “And, this code of conduct remains valid even if a new government is formed as demanded by the parties.”
The Finance Ministry is currently holding discussions with ministries on committed costs such as salaries and regular expenditure on ongoing projects and programmes.
Over the last four years after the CA election, only once (last fiscal year), the annual budget was presented on time. Delay in the government formation saw the Maoist-led government present the budget on September 19, 2008, two months behind the schedule. Despite tabling on time, the 2009-10 budget was endorsed after four months due to the UCPN (Maoist)’s obstruction. The resignation of the then Prime Minister Madhav Kumar Nepal just ahead of the budget presentation forced the country to wait until the third week of November for 2010-11 budget.
This vicious cycle of delay in budget presentation and endorsement has taken a toll on development and economic growth of the country. There has been a huge gap between the projection and actual economic growth over the last four years.
A progress report prepared by the National Planning Commission (NPC) on last year’s budget said that only 70 percent of the capital expenditure was spent in 2010-11. This year, despite the budget coming on time, capital expenditure has remained low, with only 40 percent spent in the first ten months.
With the next year’s budget coming through ordinance, it will not contribute much to country’s economic growth, say economists.
“Even if the next budget is presented timely, it will be very difficult to implement at local levels as our government mechanism is not strong enough to deliver services,” said economist Bishwombher Pyakuryal. “In the absence elected bodies at both centre and local levels, corruption will be rampant.”
Source: The Kathmandu Post
