Friday, November 2, 2012

Politics of consensus holds budget hostage

Amidst the economics of uncertainty and politics of consensus, the economy has been structurally damaged.
While the caretaker government, led by UCPN-Maoist chief ideologue Dr Baburam Bhattarai, on one hand, is hell bent on bringing a full-fledged budget, the opposition parties, on the other hand, have been putting pressure on the government to first forge consensus on political issues before bringing the budget for the current fiscal year.
President Dr Ram Baran Yadav has also been repeatedly asking the government and opposition to forge consensus to bring the budget because without a budget, the general people and low-income people with fixed salaries will be hit the most.
"Lack of budget will hit low-income people the most," said former governor of the central bank Dr Tilak Rawal. "It will have no significant impact on the affluent section of society," he said, adding that the government has not been able to spend the budget on development activities as a majority of the budget is enough for only recurrent expenditures, which is mostly salaries to government employees.
Over 90 per cent of the budget is enough only for administrative expenses, that is recurrent expenditures, according to economist Dr Chiranjivi Nepal.
"The state has to sensibly spend resources, and for Nepal, it is even more important as we have limited resources," he said, adding that the government has to be accountable while spending the tax payer's money. "It is only dictators and communist countries who bring budgets without consultations with the opposition. A democratic government cares for governance and accountability," Nepal added. "The prime minister holds the key to consensus."
Former member of National Planning Commission (NPC) Dr Posh Raj Pandey echoed him. "The government must be responsible and flexible in forging consensus," he added.
Likewise, former governor of the central bank Himalaya SJB Rana suggested a middle path. "If there is no consensus, the government must bring a full-fledged budget without any new programmes," he said.
What if there is no consensus in two weeks, asked senior economist Prof Dr Bishwhambher Pyakuryal. "The budget has become a victim of 'politics of consensus'," he said, adding that the President has to set 'preconditions' and ask for transparency of expenditures of the four months of the current fiscal year and allow the government to bring a full-fledged budget without any populist programmes.
However, vice chair of National Planning Commission (NPC) Deependra Bahadur Kshetry opined that the government has to add some programmes to provide relief to people as they have huge expectations. "Though the size of the budget has already been fixed at Rs 429 billion by the three-year interim plan, it might be a little bigger at around Rs 450 billion," he added. 

Private sector irresponsible: Acharya
KATHMANDU: Former senior advisor to the Finance Ministry Keshav Acharya has termed the private sector as irresponsible. "A responsible private sector cannot say that it will not pay taxes," he said, adding that every citizen of the country has to follow the law of the land. "Such comments will encourage anarchy," he added. The private sector, to exert pressure on political parties, said that it will not pay taxes as the government has been unable to spend on development activities and has only been mobilising revenue. Likewise, the special budget had alloted Rs 20.96 billion under capital expenditure — that is development expenses — but has been able to spend only Rs 2.77 billion in the first three months of the current fiscal year. "The Finance Ministry has projected to spend Rs 4.88 billion by the end of the fourth month (mid-November), on the basis of last fiscal year's expense pattern," according to finance secretary Shanta Raj Subedi.
Govt writes to opposition
KATHMANDU: The Finance Ministry, on Friday, asked opposition parties to send a representative each to a committee that will suggest on the budget preparation process. "The government has written a formal letter to the opposition parties — especially Nepal Congress and CPN-UML — asking them to send their representatives to the committee that will suggest in the process of drafting the budget," according to the Finance Ministry that has started to prepare a full-fledged budget to be presented before mid-November.
Growth rate after CA Election
2007-08 — 5.80 per cent
2008-09 — 3.77 per cent
2009-10 — 3.97 per cent
2010-11 — 3.47 per cent
2011-12 — 4.63* per cent
(*GDP growth rate for the fiscal year 2011-12 projection only. Source: Central Bureau of Statistics)
Budget after CA Election
Fiscal year — Total outlay — Recurrent Expenditure — Capital Expenditure 
2007-08 — Rs 168.99 billion — Rs 98.17 billion — Rs 55.26 billion
2008-09 — Rs 236.01 billion — Rs 128.51 billion — Rs 91.31 billion
2009-10 — Rs 285.93 billion — Rs 160.63 billion — Rs 106.28 billion
2010-11 — Rs 337.90 billion — Rs 190.31 billion — Rs 129.53 billion
2011-12 — Rs 384.90 billion — Rs 226.61 billion — Rs 72.61 billion
(Source: Finance Ministry)
* Finance Minister Barsha Man Pun announced budget for fiscal year 2012-13 amounting to Rs 161.02 billion, which is one-third of the total estimated budget on July 15, 2012. 
* Finance Minister Surendra Pandey presented special budget for the fiscal year 2010-11 on July 12, 2010 due to Maoist obstruction. Pandey brought regular budget of Rs 337.90 billion on November 20, 2010. 
* In 2008, July 14, Dr Ram Sharan Mahat presented special budget for the fiscal year 2008-09 of Rs 46.94 billion. Finance Minister Dr Baburam Bhattarai presented regular budget of Rs 236.01 billion on September 19, 2008.

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