National 3 (Spotlight Weekly)

Money Maze

With an extra Rs. 1.5 billion needed for the elections, the government is hard pressed to prepare the budget for fiscal year 2002/2003

By SANJAYA DHAKAL

When Prime Minister Sher Bahadur Deuba announced the dissolution of the House of Representatives and fresh elections on November 13, he must have figured out a way of mobilizing the additional resources needed. If he was driven simply by anger against his party, he must be ruing the decision, at least from an economic angle.

Carpets : Exports tumbling down

Conservative estimates put a price tag of Rs. 1.5 billion on mobilizing logistics and providing other support to hold the election. This is a huge burden on the exchequer, given the dire straits in which the economy already is. "Sources are limited, to say the least," said Dr. Raghab Dhoj Panta, a prominent economist, talking at a public program last week.

But Deuba remains undaunted. "I am committed to holding the elections on time. I will fulfill my commitment come what may," he said. The prime minister made the decision to hold snap polls days after he returned from a visit to the United States and the United Kingdom, where he was assured of financial assistance.

"The country's exports have come down by 3 billion rupees and imports have declined by 7 billion rupees. The mobilization of revenues is dismal. Definitely, it would be hard to find the extra resources to hold the polls," said Rajendra Khetan, industrialist and second vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), speaking at the same program. "What the government can do is cut down unproductive expenses, mobilize revenues and encourage exports."

As the country tries to cope with the mid-term polls, officials at Bagh Durbar are scrambling to find those extra one and a half billion rupees. Already their former boss Dr. Ram Sharan Mahat, who resigned as finance minister following Deuba's decision to dissolve parliament, has raised doubts over whether the country can afford the snap polls.

However, experts say that one thing favoring the government this time could be the absence of the need to present its budget before parliament and seek its endorsement. As parliament naturally takes time to approve the budget, the government was planning to present the appropriations bill sometime in mid-June so that it would be ready before the new fiscal year starts from mid-July.

"Now that the House of Representatives stands dissolved, the government need not hasten. It can issue the budget in the form of ordinance just before the new fiscal year starts. So they have ample time and opportunity to enforce discipline, cut down expenses and come up with a good budget," said Dr. Prakash Chandra Lohani, former finance minister and leader of the Rastriya Prajatantra Party (RPP).

As the Deuba government is a caretaker one, its budget is bound to come in for another round of scrutiny as soon as a new government takes office after election. Economists, therefore, are calling for wide and extensive discussions among government and political parties so that a broad-based budget can be introduced, which may not have to be hanged much after a new government comes to power in November. Frequent changes, they say, will not be in keeping with the imperatives of financial stability.

On the other hand, the opposition Unified Marxist-Leninist (UML) are buoyed by Deuba's decision to hold the snap polls. Smelling victory, the UML camp has shifted into election mode. "Definitely, we are going to introduce a supplementary budget once we come in power in November. We just hope that the government doesn't squander away all resources before we take over," said a visibly upbeat Khadga Prasad Oli, senior leader of the UML.

For the first time in many years, the government is likely to frame a budget in which regular expenditures would exceed development expenses, given the sky-rocketing security costs. The budget, therefore, may not hold much excitement for businessmen and the common people.