Kathmandu, July 13:

Nepal Economic Association (NEA), an umbrella organisation of economists, has stressed that the amount earmarked for rural and social sectors should be productively used if the government wants to achieve targeted economic growth rate of five per cent and control inflation. For this, implementation has to be strong as the current environment is not very conducive, says NEA.

Increment in capital expenditure by 56 per cent amounting to Rs 44 billion can boost economic grow-th, as the total budget does not seem to be overly ambitious. If permanent pea-ce is achieved, budget can be implemented for which common programmes must be thrashed out, according to NEA. At present, we can take foreign aid in huge volumes in terms of grants instead of loans. But it is of equal importance that we are able to perform efficiently.

The budget allocation for reconstruction and rehabilitation seems huge compared to the regular budget allocation for capital expenditure. In this context, there is a need to establish a Post Conflict Reconstruction and Rehabilitation Trust Fund.

NEA hoped that the government would guarantee the implementation aspect of the budget for achieving desired economic growth and uplift the economic status of the poor and disadvantaged people across the country.

Federation of Nepal Cottage and Small Industries (FNCSI) has termed the budget for the fiscal year 2006-07 good, in terms of boosting domestic production, continuation of micro, cottage and small industries development fund, concept of cottage and small scale industrial village, allocation of budget to rural areas, increment of budget size in social security and allocation of budget in agro-based industries. However, there are negative aspects in the budget as well. There is no clear policy to boost micro, cottage and small industries. The budget clearly lacks a clear ‘vision and programmes’ to boost industrialisation in Nepal along with absence of provisions to protect forest-based industries.

Independent National Democratic Confederation of Nepalese Trade Union has flayed the budget, saying that it has failed to address the issues for the protection and promotion of trade unions.