Himalayan News Service

Kathmandu, May 13:

The forthcoming budget for fiscal year 2005-06, which will be out in about two months’ time, will give high priority to the establishment of peace, minister for finance, Madhukar SJB Rana said today.

Speaking at a function entitled ‘pre-budget discussion programme agenda for the forthcoming budget 2005-06’, Rana said that after peace, election would be given importance. He said that the government would introduce a realistic budget, as the environment continues to be not sound for economy.

Former finance minister Dr Badri Prasad Shrestha stressed on ‘realistic budget making’ for the forthcoming fiscal year which should not go beyond our limitations. Dr Shrestha said that resources are limited for Nepal.

While making the budget, two things need to be considered – internal and external resources, as these matter a lot for sustainable economic management, opined Shrestha. He hoped that despite terrorism being prevalent across the globe, foreign aid continues to come to Nepal.

Dr Pushkar Bajracharya, economist, while presenting a paper said that economic growth

after 2000-01 had been just above the population growth rate, averaging around just below 2.4 per cent during the period 2001-05. He said that actual budgetary expenses have not increased commensurately to budgetary growth.

Actual expenses reached to Rs 89.4 billion in 2003-04 or about 17.6 per cent of GDP, compared to 19.4 per cent in 2000-01. “Nepal’s public spending is still well below the desired 25 per cent level of GDP as an international norm.”

Bajracharya said that political interferences, particularly without proper knowledge of resources, mobilisation and jurification seriously hinders budget formulation as well as implementation.

“Public enterprises continue to be huge burdens to the government exchequer. Though, the government aid to public enterprises has declined from Rs 8,255.1 million in 2000-01 to Rs 1,150.5 million in 2002-03, the unaccounted for contingent liabilities may seriously come ultimately to the government, which could have staggering effects. Procurement systems should be made highly competitive and transparent. Besides, government procurements should be minimised.”

Rajendra Khetan, president of Nepal Britain Chamber of Commerce and Industry (NBCCI), presenting a paper in the pre-budget programme said that while making the budget for the forthcoming fiscal year, issues and strategies enshrined in 10th Plan needed to be considered for poverty reduction, priority given by donor agencies, current account deficit, lasting solution for peace, minimising non-business related risks, build business confidence, among others.