Preparations for the upcoming budget have become uncertain after political interference and pressure from lawmakers for allocations have distorted emphasis on priority areas.
“The main priority of the budget should be agriculture and energy but we cannot allocate significant budget for these sectors,” says Govinda Raj Pokharel, the newly appointed vice chairman of the National Planning Commission. “Unless donor assistance increases, revenue collection goes up or the unspent money in the current fiscal year is allocated for the coming year, the budget allocation for these areas won’t increase.”
The NPC has set a budget ceiling of Rs 596 billion for the next fiscal year, but it looks like the government will struggle to balance this with the demands from political parties and other interest groups for pork-barrel funds for their districts.
Differences over budget priority among the parties in the ongoing pre-budget discussions have also made it difficult to narrow down the priority areas. While the Nepali Congress has tried to prioritise the development of the energy sector, UML has been pressing for infrastructure development with a focus on roads.
“Infrastructure should be the main priority in the upcoming budget with roads being first on the list followed by energy, agriculture and irrigation,” says Chandra Mani Adhikari, NPC member from UML.
Though the largest party in the parliament is pushing for prioritising the energy sector, a majority of the CA members have demanded infrastructure in their home districts. “Despite pushing for energy, 80 per cent of the projects that have been demanded are regarding construction of roads and bridges,” says Pokharel.
The push for infrastructure development in the budget is mainly due to the vested interests of political parties to control local politics through such projects.
According to Pokharel, allocating a huge sum of money on a few priority areas doesn’t necessarily yield better results and the budget is unspent and lapses. The government had allocated around Rs 13 billion for the energy sector this year but many projects couldn’t move forward because of disputes over compensation. Similarly, only 70 per cent of the allocated capital budget of Rs 85 billion is set to be spent by the end of the current fiscal year.