Uncertainties about the composition of the new government, and especially about who is going to be finance minister, has put the new budget in a cloud of uncertainty.

However, because the Maoists will certainly lead the government they will be setting out the priorities in the budget estimates. And if their election manifesto is anything to go by, their populist proposals all need fresh allocations.

The Maoists have promised free basic health care, free education, writing off small loans to farmers, allowances for the elderly and safe drinking water to the entire population within five years.

In the medium-term, they have also promised double-digit economic growth, boosting annual per capita income from $300 to $3,000 by 2020 and producing 10,000 megawatts of hydroelectricity in the next 10 years.

Where is the money going to come from? At the National Planning Commission (NPC), there is uncertainty about how its estimated Rs 189 billion budget for the next year is going to factor in provisions of the Maoist \'New Transitional Economic Policy'.

"It is too early to comment on it," says Dipendra Bahadur Kshetri, the Maoist-appointed member of the NPC. The grandiose Maoist plans for growth would need an annual economic growth of 20 percent or more, and many say this is just an utopian dream.

The government had allocated Rs 98 billion for recurrent expenditure and Rs 55 billion for capital expenditure in the present budget. But at the end of the fiscal year, Rs 28 billion from the recurrent budget hasn't been spent and less than half the money set aside for capital investment has been spent.

"The reason for underspent capital expenditure is because there were no elected officials in the VDCs and municipalies, but usually the recurrent budget is spent by the end of the fiscal year," says Krishna Hari Baskota, joint secretary at the Ministry of Finance.

Finance Minister Ram Sharan Mahat told Nepali Times on Wednesday that budget preparations were "routine" and on schedule. "However, policy level discussion has not taken place," he said, "that will happen once the exact nature of the new government is clear."

Mahat didn't want to comment on whether he would continue as Finance Minister, but said the country's macro-economic parameters were sound. "I would suggest that the next budget be economically sustainable, growth-friendly, rural-oriented and focused on reducing measures." The NPC is reported to be working on a budget for rural expenditure presented by the Maoist-led Ministry of Local Development.

Nepal's GDP growth may be less than four percent this fiscal year, below the forecasted five percent because of sluggish manufacturing due to labour and power crises.

"The biggest challenge for the Maoists is how to lift economic growth," said one economist, "without that none of their promises are going to be kept. It's time to be realistic, not populist."

Dewan Rai and Gita Dhungana