Nepali Times
ARTHA BEED
Economic Sense
Bad joke


ARTHA BEED


The Beed has been harping a lot on how the government's presentation of the budget has become just another annual ritual. This year too, so-called experts drift from one tv channel to the next like a deusi/bhailo band, saying immemorable and insignificant things. It is sad that such a strong financial management tool like the budget has become an annual joke.

Everyone in the government, bureaucracy, politics, private sector and other sectors who keeps on commenting about the budget needs to go through a Budget 101 lesson. A budget is part of the greater apparatus of fiscal and financial management, that also includes the oversight and evaluation of programs and expenses laid out in the budget. To expect the budget to be an economic cure-all is totally ridiculous.

More than allotting money, budgets should garner resources, create and implement strategies. But in Nepal, it has come to mean other things. For government employees, it's a source for salary increases. For politicians, it's a way to dole out favors. For the private sector, it's an announcement of tax increases or cuts.

One cannot expect much from the political parties as there are few who really understand or appreciate economics. Therefore the lead on the budget preparation should also be taken by the private sector. It needs to work with the government to help implement and evaluate the budget.

But if private firms themselves misuse the budget, it wouldn't make sense to hand them these responsibilities. They should learn from multinational and transnational companies that operate in Nepal and use the budgetary control tools effectively. This is why they continue to grow even when the economy hasn't. Unlike many firms, the fate of the CEO and other managers in these companies hinges on the budget's success.

People in government need to realize that they have made this budget a ritualistic affair to the extent that it has lost its effectiveness as a governing tool. When the number of tax payers is less than the number of motorbike owners, one needs to evaluate the composition of the tax-base. When expenses are allocated to revive political slogans one needs to ask who is distributing the money.

Come next week, the discussions about the budget will vanish from the house and the newspapers. We will not discuss the progress of the revenues and expenditure each month or each quarter, but will wait till the next budget to lambast the government. The reality is that no government in Nepali history and especially the ones formed after 1990 have been able to meet the obligations set out in the budget. So why have we expected so much of our last two governments?

www.arthabeed.com



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


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