Urge to bring budget on time to sustain economy

At a time when there is less than a month left for the budget, a former bureaucrat suggested government and political parties not to follow last year's precedent and bring budget on time.
"Government's apathy towards fiscal policy might lead to 'economic accident' in the country," said former finance secretary Rameshwor Khanal here today.
"To sustain economy, propel development activities and boost confidence of public, the government must bring budget for the fiscal year 2011-12 before July 16," he said, adding that the delayed budget will not only lengthen liquidity crunch that is already hurting banks and financial institutions but also hurt economic growth.
The delayed budget in the current fiscal year has hurt economic growth that could have been better, had the budget come on time. The economic growth is projected at 3.47 per cent for the current fiscal year due to delayed budget that could not support development activities which would have helped capital formation.
"Development spending is key to economic growth," he said, adding that political instability and transition has made the development spending difficult. "But economic stability by bringing fiscal policy on time will boost public confidence and economic growth."
However, to bring budget on time, the government needs to work on fast track basis as the time is running out. "Now, time will not permit the government to go through regular parliamentary process," he said.
The finance minister should take all political parties in confidence and prepare a broader policy on key aspects of budget like exports diversification, market expand, import rationalisation, measures to contain price hike and financial problems to bring budget on time, according to Khanal.
The possibility of change in guard in the government has made budget uncertain, though National Planning Commission has already given a ceiling of Rs 381 billion for the budget of fiscal year 2011-12.
"Though a total of Rs 426 billion was sought by the ministries," said senior economic advisor of Finance Ministry Keshav Acharya.
To bring the budget on time, the government need not add new programmes as the current programmes -- that could help sustainable eionomic growth -- are under funded and could be prioritised in the next budget too, he said, adding populist budget will not help political parties in a long run.
In the current fiscal year too, the government had brought Special budget of Rs 110.21 billion on July 12 and again brought full budget of Rs 337.9 billion on November 20 -- four months later -- through ordinance.
"The country has still been suffering from delayed delayed budget," Khanal said. After the Constituent Assembly election, almost every year the budget has been delayed and one year, it took four months to get parliamentary approval, though budget was presented on time.