The Nepalese self-made billionaire’s viewpoint on recent budget announcement! What does Binod Chaudhary say?

Wed, Jun 5, 2019 3:41 PM on Economy, Stock Market,
The Nepale...

Post the budget announcement by finance minister Yuvaraj Khatiwada, one of the speeches given by billionaire Binod Chaudhary has been trending in the social media platform. Binod Chaudhary, in his speech, criticized the budget claiming that the structural foundation on which the budget has been established has a major flaw. Binod Chaudhary further asserted that the criticisms are from the viewpoint of an industrialist who has been working in the field for several years.  

He believes that the precondition for an effective budget for a developing country like Nepal are development expenses should be at least 70% of the total budget whereas current expenditure should be at most 40% . In reality, Current expenditure is projected to reach 66% this year however, total budget’s actual development expenses seems to be 33% at maximum. In the upcoming years, the new budget policy will be forced to imply the same trend, overburdening the nation with larger expenses. The current total tax revenue will not be able to sustain the projected increasing current expenses. The projected expenses have been increased in such a great proportion that the remittance, tax collection, production revenue and even imports can’t sustain. The budget has established Nepal as an epitome of a country with highest tax. In order to increase import, every year, including this year, new policies are developed. However, in reality, if we analyze the figure of imports of last five years, imports have decreased from Rs 91 arba to Rs 80 arba.

Mr. Chaudhary further judged, despite a stable government and political transformation, if citizens do not get the return they deserve, a worse social condition will be formed in the nation. Besides, from Rs 981 arba of revenue an overall Rs 957 arba has been allocated for current expenditure, then the government is not guided towards development works.

The self-made billionaire also criticized how new policies are formed every year and nothing major implementation is done. He said budget policies for a self-sustained economy several policies on production and on industrialization have developed. These policies were developed even in the previous several years. However, if we analyse the implementation aspect of these policies, the implementation phase seems to have been completely ignored. Even now, the production is only Rs 5 arba out of total GDP.  Besides the production of cement, no other product’s production has attained a major breakthrough.

Chaudhary believes that we might have overhyped the production capability of the country and should have instead focused on other industrial sectors. For instance, Nepal has the potentiality to be a major hub in the areas of Health, Education and Tourism throughout BIMSTEC. For this, we need to change our perspective on privatization. Private and public institutes must be able to complement one another.  A proper public private partnership is an important factor to help the areas of health, education and tourism to flourish. Cement industry is one of the manufacturing industry that we are proud of. However, the progress was attainable only when necessary infrastructures were created near the factories. The same infrastructures are necessary to help other industries boom.

Chaudhary’s extreme criticism came in when he provided a reality check to the “Visit Nepal” campaign concept in the tourism industry. In order to increase the number of tourists, first and foremost, proper infrastructures are needed. The only popular international destinations have still been Pokhara, Chitwan and Kathmandu since several decades. No new tourism destination of international scale has been developed even in these many years. We are lucky that international tourists still visit the country. The proposal to establish Special Economic zone, Export Zone, Industrial Zone has been put forward but the implementation has been nullified.  Bhairawa was expected to be one of the game changing industrial zones however, industrialists were reluctant to join the sites in Bhairawa. Last year’s budget made a promise to bring in 5 lakh new jobs however, why were the statistics on the new jobs created hidden?  

 Finally, the Nepali billionaire asserted he does not simply blame finance minister for his disappointment. He believes every ministry office is linked with one another. However, when one ministry fails to work as promised there should be a mechanism to reallocate the budget to another ministry which can efficiently accomplish other projects. Our weakness lies in planning, organizing and monitoring and if we fail to monitor these budgets every month, there will be no any magical changes.