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VOL. 27, NO. 43, July11 , 2008 (Ashadh 27 2065 B.S.)
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Victim Of Politics
Due to unending political crises, this year the government is unable to present the budget for the coming fiscal year
By Keshab Poudel
For the people expecting relief package and growth impetus in the first budget of republic Nepal, there is a bad news.
Thanks to the current political deadlock blocking the formation of new government, the Ministry of Finance officials have said they are not in a position to bring in a full-fledged budget this year.
In normal circumstances, a budget for the new fiscal year is presented at the parliament in the first/second week of July. Nepal's fiscal year begins from mid-July.
But this time even as the first week of July has passed, there is no sign of ending of political deadlock – leading to the troubling situation.
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Finance Minister Dr Ramsharan Mahat: Budget uncertain |
"Budget is presented after the government presents its policies and programs. Presenting policies and programs is not possible because there is no head of state now. So, full-fledged budget is not possible this year," said Finance Secretary Rameshwore Khanal.
Khanal said that the government is preparing to introduce advance expense bill for the time being. However, even for that bill to be approved – which would, in turn, allow the government to continue collecting revenue and spending resources – the Constituent Assembly (CA) meeting has to resume as it also functions as legislature.
"There are still few days left. We hope the deadlock will break," Khanal said, adding that introducing ordinance is also out of question since the government cannot issue ordinance when parliamentary session is on.
"At present, we cannot issue ordinance. It can be issued only when the CA session is off. Either the current session has to be temporarily suspended," he said.
Krishna Hari Baskota, chief of budget division, has said that the National Planning Commission (NPC) had fixed the maximum limit for the budget this year at Rs 189 billion.
Challenges
Even as the government prepares to bring in a temporary (covering three month) bill to avert the budget crisis, the experts have been pointing at several challenges before the government.
Apart from the stark lack of political ownership given the Maoist leaders' (who are preparing to form new government) remarks that they would not support the budget prepared by this government, there are various economic challenges as well.
The major challenge, as everywhere else in the world, is the spiraling rise of prices in the world market, the government officials and economists have said.
Finance Secretary Khanal said that the price rise of fuel and food and problem in supplies will affect the budget.
The rate of inflation is nearing the double-digit figure even according to estimates by the government. As the same has crossed beyond double-digit in neighboring India, Nepal is bound to be hurt more in the coming days.
Some economists have also warned that the country has landed in 'stagflation.'
"We are in stagflation, which means the growth is stagnant while there is rising inflation,' said Dr. Raghab Dhoj Pant, an economist.
"Only three things have held our economy together at this point. The remittance income, pension (received from retired Gurkha soldiers) and foreign grants," he said.
Dr. Pant also warned that since the import is over three times more than exports, the economy is in bad shape.
