Nepali Times
Headline
Going for broke


KIRAN NEPAL



SAM KANG LI

Now that it has the elections sorted out, the spendthrift governing alliance is finding it difficult to pay for all its promises.

There is a gaping shortfall of Rs 3 billion to pay for elections and requirements of the 23-point agreement. And at a time when money is so short, the seven parties have awarded themselves Rs 1 million per MP as pork-barrel funds for election expenses.

Finance Minister Ram Sharan Mahat was hard pressed to answer concerns from Kathmandu-based donor representatives on Wednesday about the expenses. He clarified that the Rs 1 million had already been budgeted as expenses for VDCs and the ruling parties had decided to give the money to their MPs. Donors said this would give an unfair advantage to incumbent parties, and they were not satisfied about how this money would be accounted for.

Mahat calculates that the government will need Rs 5 billion to finance the elections, pay for Maoists in the cantonments who haven\'t been paid since April 2007, compensate conflict victims and provide security in the tarai. But he can only muster Rs 2 billion. Mahat called the meeting with party leaders to ask donors to meet the shortfall.

"Even if we pay only Rs 100,000 per conflict victim, then to meet all the other expenses included in the 23-point agreement we need another Rs 3 billion," Finance Secretary (Revenue) Rameswor Khanal told Nepali Times.

The Finance Ministry is massively in arrears on payments to Indian Oil for petroleum imports, and domestic borrowings have already exceeded Rs 8 billion at a time when interest rates are going up due to a liquidity shortage in the market.

The government's main source of revenue is next week's share auction of Nepal Telecom, which is expected to yield Rs 10 billion.

The government is selling its 150 million shares at a minimum of Rs 600 per share. But there is a writ in the Supreme Court about discrepancies in the pricing of the shares for the public, who will have to pay six times more than the company\'s employees.

Representatives of Kathmandu-based embassies were encouraged by the presence at Wednesday's Finance Ministry meeting of Baburam Bhattarai from the Maoists, Jhalanath Khanal of the UML and the NC's Chakra Bastola.

Said one donor representative: "Now that they were there to discuss money, it looked like elections were finally for real."



LATEST ISSUE
638
(11 JAN 2013 - 17 JAN 2013)


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