Opposition doubts finance minister's intention

Amid protest from opposition parties, deputy prime minister and finance minister Bharat Mohan Adhikari again pressed for early budget today.
"The budget needs to be presented before May 28," he said at the Biratnagar Airport today. "I am trying to forge consensus among the parties including opposition Nepal Congress (NC) that is vocal about Adhikari's intention to bring budget before May 28 -- the deadline of the Constituent Assembly.
Though the budget session of the Legislature-Parliament has been summoned by President Dr Ram Baran Yadav from May 2 on Prime Minister Jhala Nath Khanal's recommendation, the premier himself has ruled out any possibility of tabling the budget before May 28 and has already informed Speaker of the House Subas Chandra Nemwang.
However, the Ministry of Finance has been preparing to present the budget for the fiscal year 2011-12 on May 23. Earlier too the cabinet on Adhikari’s proposal fixed the date of budget for May 3, which seemed impossible.

The opposition party has raised serious objection on Adhikari's intention for the budget at a time when the economy is heading towards severe crisis due to political instability.
"There is no condusive investment climate due to rising insecurity," former finance minister Dr Ram Sharan Mahat said, adding that the cost of production of domestic products is going high making them less competitive resulting in low exports.
After failed attempt of deputy prime minister and finance minister Bharat Mohan Adhikari’s to bring Supplementary Budget to distribute remaining budget to the party cadres and pardon the fake VAT bill users, the Finance Ministry has been under severe pressure to prepare early budget for the next fiscal year.
Though the Three Year Interim Plan (2010-13) aims at providing jobs to 1,75,000 people every year, "the budget and its orientation seems to be losing its focus and going to be distributive instead of production-oriented” he said, adding that the budget also failed to create condusive environment for investment that could have boosted exports and generated employment too.
The Three Year Interim Plan has fixed the ceiling of Rs 385 billion, out of which Rs 175 billion is separated for capital expenditure and Rs 208 billion for recurrent expenditure.
"Amid double digit inflation, balloning trade deficit due to import growth outspacing exports by six times, difficult labour relations is pushing the country to economic collapse," the former finance minister said.
Price hike stood at 10.7 per cent in the first eight months that is expected to rise further once petroelum products'' prices are raised next week.
Similarly, the government has been able to spend only Rs 33 billion capital expenditure -- meant for development activities lowering the capital formation.
The government has in the budget for current fiscal year targetted a growth of 4.5 per cent. However, the economy is projected to grow by 3.45 per cent only.
Balance of Payment has registered a deficit of Rs 11.30 billion in the first eight months of the current fiscal year failing the monetary policy that has targetted Rs 9 billion surplus.
Neither central bank''s monetary policy nor government's fiscal policy could give respite to the exports by encouraging the productive sectors not could they help raise competitiveness of tradeable goods.
On one hand share of manufacturing sector to the economic growth is declining and on the other prolonged tight liquidity situation in the banks has been hurting lending to productive sectors due to high interest rates, forget the energy crisis that has pushed the cost of operation high up.
Capital markey is yet another indicator that proves the economy is passing through a rough water due to government apathy.
Capital market that is said to be the mirror of economy also proves the poor economic performance. The secondary market index has dropped to five year low to 347 points and has been hovering below the psychological 400 points since last four months.
Similarly, revenue mobilisation -- that is largely import-based -- has also failed government target by five per cent. The Finance Ministry has been able to mobilise Rs 145.65 billion revenue -- in the first nine month -- that is 95.8 per cent of the target.
Unlike the past couple of years, when the government had been exceeding revenue target, this year it is also going to be a failed attempt.