Budget: Experts voice

Dr Bishwamber Pyakurel
Economist

The new budget has tried to include each and every sector, so I think it must have been designed in such a way that it can have successful implementation. The amount fixed for the budget is now going to be scattered in different sectors, and this will have short-term benefit as the state's mechanism cannot expand the allotted budget. Expansion allocation by revenue is fairly over-ambitious but I think Rs 30-32 billion cannot be invested in Nepal. The new budget itself has been announced two months late and it will take a great interval of time to reach the assigned villages, which is alarming. It is nice to hear that the new budget has touched many such sectors which were not getting right notification earlier like Health, Employment, Hydropower. This shows the good aspect of the new budget but as a whole it is quite an expansionist budget for the state. The budget has another good aspect as it has also chosen people with disabilities and has tried to work for prolonging their life expectation and has allotted a separate lump sum for it. The budget has large amount for the villages but if the allotted amount doesn't get invested there, it will be no use. In comparison to the previous budget, this one is more expansionist. The Finance Minister has said that Nepal Rastra Bank will bring a new monetary policy but I think even it cannot make perfect money allocation.Truly speaking, the new budget is quite expansionist and it might result in inflation.

Dr Dilli Raj Khanal
Economist
"In my opinion, it's a good try to take the budget in a new manner. Though there is the inclusion of many sectors in the new budget, I think in the near future the outcome can be very serious if it does not fulfil expectations accordingly. It has created new hopes for many sectors which were ignored for years. The budget has generated expectations among the people in general but unless and until the genuine framework that I made regarding the budget is implemented it may disappoint the people. The revenue section of the budget was somewhat satisfying, but I feel that if it were to fail in the long run it will create frustration. Simply put, the budget is over ambitious."

Dr Ram Sharan Mahat
Former Finance Minister
"I call it a pork barrel budget. It's blown up like a balloon and has crossed the limit of financial indiscipline. It is not a growth-oriented budget. It is oriented toward consumption and distribution. The budget can cause financial anarchy as it lacks focus and is unsustainable. All the revenue projections are grossly exaggerated and impractical. It will lead to high deficit and inflation. This transitional budget has piled up huge liabilities on any future government. This government's talk of opening cooperatives smacks of the Panchayat era where the government would open Sajha to cater to the needs of the people. I do not see any programmes to encourage private industries."

Dr Shanker Sharma
Former vice-chairman, National Planning Commission
"The new budget is really over-ambitious and there is too much over-programming. I think, in terms of priority to sectors, nothing was missed out," said Dr Shanker Sharma, former vice-president of the National Planning Commission adding that the budget has also mentioned increasing foreign aid by 100 per cent - a factor which increases donor dependency and is an example of over-programming. While cautiously praising the experimental budget Dr Sharma said, "It's inclusion of cooperatives, infrastructure development and youth development programmes' implementation is quite appreciable." The budget has also said that Nepal Airlines Cooperation (NAC) in collaboration with the government will increase the size of its fleet. Dr Sharma said, "This is the same budget which was ineffective in the earlier days and is being repeated. Even the new budget seems to include nearly all sectors, but I think it won't be sustainable and its effect can easily been predicted from the very next year. In the context of Nepal, resource mobilisation is difficult and foreign aid also cannot be utilized." He warned that revenue would not reach higher than Rs 10-11 billion and added that at least Rs 2-4 billion would be overdraft and thus raise inflation.

Dr Jagdish Chandra Pokharel
Former Vice-Chairman, National Planning Commission
"The budget is quite bold, although there are innate problems. It will face challenges in both raising revenue as well as in spending on development. Last year, the government was able to spend only about Rs 42 billion on development. It will be easier to spend on relief and welfare, but capital expenditures that require fulfillment of due procedures will be difficult. Villages that have less capacity and less resources will be affected. There is also doubt about the macroeconomic implications of such a large budget. We doubt that inflation will be limited to 7.5 percent.The major departure is on social security, especially for people in remote areas like Karnali. The government has also taken bold steps like providing 0.5 percent of property transaction fees to Bagmati civilization. That's a good idea. It has also shown commitment in controlling substances like tobacco and alcohol. The rest is mostly continuity of previous policies. However, we should try to see the bigger picture by linking the budget with the government's policies and programmes. Although most of the programmes appear to be the continuity of previous regimes, we should try to understand why the new government is talking about a break with continuity. It is talking about break in continuity in relation to the role of the government and political parties in the development process. It has rearranged statistical evidence to make a different historical assessment and draw a different conclusion. We are only seeing the preliminary building blocks of the Maoist policies. They are likely to lead the country towards greater role of the state and greater involvement of political parties in the development process. They don't trust the bureaucracy and believe that the political machinery must be engaged. This is what they mean by a break with tradition."