RENDEZVOUS: We can submit budget document by mid-June if Speaker gives waiver to the process of pre-budget discussion

The government has proposed to launch the budget for the next fiscal year at an earlier date to implement budgetary programmes right from the start of the next fiscal. In this regard, the pre-budget

discussion was scheduled to start at the Legislature-Parliament on May 30. But the obstruction created by opposition parties — which have put forth various demands — has led to cancellation of House proceedings since then. This has raised the prospect of a delay in the launch of the budget, which is expected to hurt the country’s development endeavours.

Rupak D Sharma of The Himalayan Times met with Ram Sharan Mahat, who is doing his sixth stint as the Finance Minister and is tipped as Nepali Congress’ next prime ministerial candidate, to discuss causes of the delay and how he plans to proceed forward.

It is now almost sure that the government won’t be able to introduce the budget in mid-June as proposed, isn’t it?

We were making preparations to submit the budget document in the parliament for discussion within mid-June. But that won’t be possible now as there needs to be a gap of at least 15 days between the start of pre-budget discussion and budget submission. If everything had gone according to schedule, the pre-budget discussion should have started on May 30 and concluded by now. So the process will be delayed by a couple of weeks, unless the Speaker intervenes and says the government can submit the budget document without holding pre-budget discussions.

So what are the possibilities of Speaker Subas Chandra Nembang giving a waiver to the process of holding pre-budget discussion?

I cannot say anything about that as it is in his discretion. If I had my way, I would have submitted the budget document at the earliest date possible because this would have expedited the endorsement process. If the budget is approved at an earlier date, we would be able to promulgate all the bills associated with budget implementation before the end of the current fiscal year. This would give the government one whole year to focus on budget implementation. So now it is up to the Speaker to decide on whether to give a waiver to the process of pre-budget discussion. If he does not there will be delay in the launch of the budget for next fiscal.

Of various demands put forth by the opposition parties that are obstructing pre-budget discussions, one on reallocation of funds from one budget head to another is partially related to your ministry. What is your take on the issue?

The Ministry of Finance had extended permission to reallocate funds from one budget heading to another as per the rule. Although budget reallocation took place at all ministries and constitutional bodies, the opposition parties are currently focusing on fund transfers that took place at the Ministry of Federal Affairs and Local Development. We can do very little to revert the transfers now, as funds have already been extended to various district development committees for implementation of projects at the local level. So, getting them back will not be possible. The only way out is to make the process more systematic in the future, so that programmes that are implemented by people themselves at the local level do not land into controversies.

One of the reasons why the government has to reallocate funds towards the end of the year is because many projects just can’t spend the money allotted to them due to weak planning process, isn’t it?

I know there are problems in the planning process. But at the same time, one needs to understand that everything here does not move according to plans because of various reasons, such as delay in procurement process or inefficiency of suppliers. So, there should be flexibility in making adjustments to expenditure plans and reallocation of funds. Also, what is wrong if you take away funds from projects, which are facing implementation problems, and hand them over to those seeking additional financial resources? Public finance

management is not an easy task because we have to deal with unforeseen events, and provision on fund transfers provides us a cushion. Intra- and inter-ministry fund transfers also quicken disbursement processes and give impetus to development activities. But the bottom line is that funds should not be transferred from budgetary programmes to non-budgetary programmes, meaning the fund transfers should be limited among projects announced through the budget.

So why can’t you explain this to the opposition parties?

Opposition parties are opposition parties. They know fund transfers take place every year, but this is politics and in politics logic does not always work.

But again fund transfers take place because of weak planning. So will the second generation reform programmes that you have been talking about since joining the office take this problem into consideration?

Yes, of course. We are holding discussions on it in our own ministry and with concerned bodies. The plan is to improve the present procurement system, and ensure efficiency in budget allocation and project implementation, so that we can follow the schedule and implement projects on time. In this regard, we are planning to amend various laws and regulations, including the Procurement Act.

Your ministry has already started drafting next fiscal’s budget. Would you mind sharing some of its highlights?

My focus will be on achieving higher growth, attracting more investment in capital projects, including hydropower projects and transmission lines, and increasing public investment in infrastructure. I believe that building physical infrastructure will create a basis for attracting private investment and delivering better services to the people. We will also focus on education sector, creating additional job opportunities in agriculture, encouraging youths to take part in agricultural activities, professionalising the agricultural sector, and enhancing the productivity of workers.

Since joining office, you have said that your focus will be on bringing in more foreign investors. What programmes are you introducing to encourage foreigners to put their money in Nepal?

Confidence building is the key to attracting foreign investment. Our laws are okay, but they need some improvements and we will do that. We will also build special economic zones through which various incentives can be extended to foreign investors. A bill on it will soon be promulgated. Similarly, we will introduce reforms in hydropower sector and unbundle Nepal Electricity Authority. We are also holding discussions on bringing a flexible labour policy together with provisions on social protection. Also, tax incentives will be extended so that legitimate interests of investors can be protected. These initiatives will definitely work in attracting investment. But what will work as the icing on the cake is our ability to create an environment wherein foreign investors can have faith in the government. In this regard, we need to ensure policy stability and create a predictable environment.

One important component of the economy is the agriculture sector. What policies will you be unveiling to promote it?

The new budget will provide incentives to those who want to engage in commercial farming. These incentives, we hope, will help in professionalising the agriculture sector and attracting youths towards agriculture, including foreign employment returnees.

Could you please give us some examples on what those incentives would include?

They would include subsidy on bank interest rates and import duties, and tax incentives. Also, we will ensure those engaged in farming have easy access to inputs, technology and credit. We are currently looking into these areas, but nothing is certain for now.

Lastly, would you like to say something to the opposition parties that are hindering pre-budget discussions?

I am sure the opposition parties understand the gravity of the issue. The country cannot remain hostage to their demands. We have to work fast and harder. We have to let our democratic institutions operate and function smoothly without any obstruction.

Source: THT