Budget, when? - Nepali Times

From The Nepali Press
Budget, when?
Payshal Acharya in Nepal, 14 November

FROM ISSUE #526 (05 NOV 2010 - 11 NOV 2010) | TABLE OF CONTENTS

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The special budget for four months is about to run out. Warnings of an economic crisis if a full budget is not presented within two weeks have been doing the rounds. If the government and the opposition party don't sort it out to pave the way for a budget, even the civil servants won't be paid their salaries from next month on.

The target rate of economic growth has not been achieved because in the last three years, the budget has not been presented on time. Delays in the budget have prevented the implementation of major plans and led to development budgets being frozen. Local governance is still weak, and it is difficult to implement the budget at the grassroots level.

Major projects have been stalled. The government's policies and plans for the new fiscal year are dependent on the budget, too, so investors are waiting in confusion for new policies to be announced. Revenue has also gone down because new interest and taxation rates have not been announced. Revenue increased by 24 per cent last year but this year is expected to grow just 10 per cent. This is the lowest growth rate the country has experienced in five years. In turn, this decrease in revenue will affect the size of the budget next year.

The delay in budget presentation will also affect progress towards achieving the Millennium Development Goals by 2015, and in increasing job opportunities, narrowing financial disparity, and achieving regional balance and long-term economic plans.

Finance Minister Surendra Pandey says that there are no constitutional barriers to presenting the budget. "We are under a compulsion to present the budget immediately to prevent further economic crisis," Pandey says, adding that when the new government is formed, it can always make modifications to the budget.

An option is for the 22 parties to bring out a consensus budget. But the main opposition, the Maoists, have refused to allow the introduction of a full budget under the caretaker government. Maoist leader Dev Gurung says, "We need to form the new government fast and then bring out the budget." Gurung adds that the interim constitution does not allow a caretaker government to bring out the budget and that the law has to be followed under all circumstances.