Saturday, June 11, 2016

Finance Minister denies price hike

Finance Minister Bishnu Prasad Poudel has denied reports of increase in inflation rate claiming that price hike was not possible without the endorsement of budget.
"How will the market price increase without the budget being endorsed,” he asked at an interaction programme in Kathmandu today. "This is false."
However, the market price had started looking up a week before as usual due to the budget leakage that the government employees are getting their salary hiked by 25 per cent. With the grade and salary hike, the government employees will pocket some 40 per cent hike in the current salary from the next fiscal year 2016-17, starting from July 16.
The budget leakage has also made the share market swell – propelled by the insurance companies – and it turned true as the fiscal policy a week later announced hosts of insurance programmes that will expand the insurance market and fuel their profit.
Likewise, let alone liquor and cigarette that get dearer every year after the budget, the prices of essential food stuff including rice, pulses and sugar has increased by Rs 10 to Rs 50 per kg, immediately after the budget announcement. Nepal Retailer's Association (NRA) president Pabitra Man Bajracharya accepted that the whole-sellers have increased the prices of the food stuff after the budget.
Unknown to the fact that the market won't wait for the budget to endorsed, the finance minister claimed that the government would not let the inflation rate go beyond 7.5 per cent. However, the inflation rate that has been around the double digit the whole fiscal year seems looking up only, also due to government's distributive and expansionary budget.
Paudel, on the occasion, also claimed that the budget will be fully implemented. "It is very natural that those who are habituated to the political practice of yesterday doubt its implementation,” he said, stressing that his budget will be implemented. But given the track record of all the political parties, which were in power, and bureaucracy, none of the budget in last one decade has been completely implemented, neither has the economic growth been achieved nor the price hike been tamed.
The finance minister also revealed that he would table the budget implementation proposal at the Parliament very soon.
He had announced the expansionary and distributive budget of Rs 1048.92 billion on May 28. "The budget, directed toward implementation of the new Constitution, will achieve the target of 6.5 per cent economic growth in the next fiscal year," he reiterated, adding that the revenue projection and foreign aid – both ambitious – would be achieved.

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