Budget: Promises and Expectations

Nepal government has presented details of revenues and expenses for the fiscal year 2016/2017 in the parliament on 28 May. UML leader Bishnu Paudel used the opportunity as the finance minister to present the budget of Rs 1048.92 billion. This budget is 28 percent bigger than the current budget.

Reactions to the budget published in media contain adjectives like ambitious, dreamy and populist. It is but natural that analyses differ as per opinions.

Observing the distribution of budget one sees that agriculture, health, education, infrastructure and reconstruction have been prioritised which is relevant to the current situation. One can only surmise whether the amounts allocated in each title can really be spent within timeframe because previous experiences are not exciting.

Analysing new budget's points give hints that economic consultants to the finance minister from powerful political background seem to have recommended the next year to be distributive rather than productive. The thought that UML can take advantage in the proposed local elections might have inspired them to do so.

Salary of government employees including civil personnel, army, police and teachers has been proposed to be increased by 25 percent. Moreover, funds to be spent for parliamentarians and officers in constitutional bodies will put a burden on state treasury. Social security allowances have been proposed to be doubled. Experts will conclude whether it is a responsible step by an interim government in transitional period to expand state's obligations and add burden to state treasury.

With the hike in employees' salary and social security it is inevitable that daily goods will become expensive. This is the inflation economists talk about. Former Finance Minister Surendra Pandey pointed out this fact and another ex-Finance Minister Mahesh Acharya commented this budget as ushering "price inflation". Deependra Chhetri, former vice-chair of National Planning Commission, who analyses budget with Maoist viewpoint, commented that big amount will "only raise prices, not production."

How are resources managed for the next year? People are curious about it and finance minister's resource mobilisation measures should be assessed to address this question. It has been proposed to collect 54 percent of the expenditure from revenue collection and around 30 percent of the remainder will be relied on foreign aid and debts.

It is not good to pin hopes on bilateral and multilateral aids. Moreover, delays in reconstruction works have raised questions about capability and skills of responsible officers. FNCCI Chief Pashupati Muraraka and other private business have given positive reaction to the budget by saying that it encourages industrial investment but they too have accepted that implementation of budget is challenging.

The points of budget read out by the finance minister on 28 May are mere proposals for now as they yet to be endorsed by the parliament. Open and extensive discussions will invite changes and amendments. It is expected that members of the opposition party will be critical and accountable to people while discussing budget in the House. It goes without saying that speeches and activities of people's representatives are always monitored by alert citizens and media.