Thursday, July 5, 2012

Budget size to balloon due to relief programme, election: NPC vice chair

The government is preparing a 'populist and expansionary' budget — that will exceed the ceiling of Rs 429 billion — due to relief packages to the poor and the added burden of an election, but the opposition claimed that the 'expansionary' budget will not provide relief to the poor as inflation will hurt them dearly.
"The government has been introducing relief packages that might increase the size of the budget from the current ceiling of Rs 429 billion," said vice chair of the National Planning Commission — the government think tank — Deependra Bahadur Kshetry at a pre-budget interaction at Reporters' Club.
The government will bring new programmes to identify people living below the poverty line and provide them with a minimum of 100 days of employment in a year, and open subsidised shops to provide relief to the poor populace, he said, adding that the new pro-poor programmes — that were supposed to come through an Act earlier — and elections will increase the size of the budget to above Rs 440 billion. "The National Planning Commission had not envisioned the election — while fixing the budget ceiling for fiscal year 2012-13 — that will add Rs 10 billion and the payment for the ex-combatant of Rs 3 billion more to the budget outlay."
Economist Dr Chiranjivi Nepal claimed that the expansionary budget will push the inflationary pressure up making the lives of the poor more difficult. "The bigger the size of the budget, the more will the poor populace suffer because of rising prices due to excess money supply," he added.
Similarly, the budget of the current government will also be without ownership like the current one due to political uncertainty hitting its implementation, if the incumbent government brings a full-fledged budget," he said, suggesting the UCPN-Maoist-led government to bring a special budget for regular expenses like social security, salary, debt servicing and projected costs to the national priority projects only.
The caretaker government of Dr Baburam Bhattarai might misuse the resources and involve in gross financial indiscipline in the absence of the parliament and legitimate budget oversight agencies, said Nepal, adding that the government has no right to distribute the taxes paid by the people to its party cadres in the name of support and relief to the poor.
However, economist Dr Dilliraj Khanal said that the budget size has to increase much more to meet the expectations of the people and absorb the shock to the economy. "The economy is passing through a difficult phase and the government needs to provide a cushion," he said, adding that a conservative budget of Rs 429 billion will not help sustain the economy.
Similarly, the first governor of the central bank Himalaya SJB Rana said that the government should bring a full-fledged budget through political consensus.

Government in mood of confrontation ?
KATHMANDU: It seems the government is heading towards a confrontation with the President. The 22-opposition parties including the big two parties, Nepali Congress and CPN-UML, on Wednesday, met President Dr Ram Baran Yadav and asked him in writing to not accept a full-fledged budget brought through ordinance and allow the government to bring only 'one-third budget' as the current government is only a caretaker one and can be changed anytime if there is political consensus among the parties. "The new national consensus government should bring a full-fledged budget," they argued. "The President should not accept the full-fledged budget through ordinance," suggested economist Dr Chiranjivi Nepal. However, economist Dr Dilliraj Khanal and National Planning Commission vice-chair Deependra Bahadur Kshetry opined that the President should not stop the full-fledged budget ordinance, thereby pushing the country to a political confrontation. "If the President does not approve the government's budget ordinance, there will be confrontation," said Kshetry, claiming that the government will bring a full-fledged budget through ordinance as the possibility of a consensus within two weeks seems far-fetched.

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