Experts urge government not to bring distributive budget

Experts today advised the government not to bring distributive and expansionary budget to check price hike.
"The budget should not be distributive but aim at empowering the people," said former governor Deependra Bahadur Chhetri, speaking at launching programme of 'Model Budget for the fiscal year 2011-12' organised by National Council for Economic and Development Research Nepal, here today.
Deputy prime minister and finance minister Bharat Mohan Adhikari yesterday tabled the Priorities and Principles for the budget for the fiscal year 2011-12 at the Parliament that will hold pre-budget discussion from tomorrow.
The budget should generate employment at the local level by making it rural-centric, he said, adding that the reverse trend to the current work force out flow could be possible only through generating employment at the rural areas.
"The expansionary budget would not help boost economic growth rather push the price up promoting consumerism," he added.
Another economist Dr Chiranjivi Nepal echoed him. "The budget must help control price hike that is hovering around 10 per cent against the current fiscal year's budget target of seven per cent," he said, adding that lack of regular supply of power has hurt the production sector decreasing the productivity and increasing inflation. "Regular supply is directly related to productivity and price hike," Nepal added.
The Model Budget has suggested the government to bring a strategic plan to fight price hike and focus on solving current financial problem, infrastructure development, energy, transportation, agriculture, tourism and security, for sustainable development, apart from regional focus.
Suggesting to form a Common Minimum Programme among the political parties, it has also suggested to increase social security blanket. "Senior citizens, physically impaired and widow should be paid Rs 3,500 from the current Rs 500 per month," suggested coordinator of the Model Budget preparation committee Dr Chandramani Adhikari.
However, finance secretary Krishnahari Adhikari said that the increment is not possible as it would increase a huge liability to the government. "The government has been allocating Rs 8 billion to Rs 10 billion for the fund currently and the increment would create seven times more liability on government," he said, defending that the government has been able to spend on development activities, though not as envisioned by the successive budgets since last three years.
The Model Budget has projected Rs 390 billion budget for the fiscal year, however, National Planning Commission has already given a ceiling of Rs 381 billion for the next fiscal year's budget to the Finance Ministry.
"The Model Budget has allocated Rs 205 billion under recurrent expenditure, Rs 165 under capital expenditure and Rs 20 billion for the payment of Principle and interest of loans," Adhikari said, adding that the government should target Rs 248 billion revenue mobilisation, Rs 105 billion foreign aid and grants and Rs 37 billion domestic borrowing.
However Baskota said that the government has to set aside Rs 26 billion to pay for Principle and interest of loans according to the Office of Comptroller General. "But the government will take suggestions from the Model Budget," he promised.

Budget Outlay
2006-07 -- Rs 143.91 billion
2007-08 -- Rs 168.99 billion
2008-09 -- Rs 236 billion
2009-10 -- Rs 285.93 billion
2010-11 -- Rs 337.9 billion
2011-12 -- Rs 381 billion*
(*National Planning Commission’s ceiling. Source: Finance Ministry)