Dr Ram Sharan Mahat
Former Finance Minister
I call it a pork barrel budget. It’s blown up like a balloon and has crossed the limit of financial indiscipline. It is not a growth-oriented budget. It is oriented toward consumption and distribution.
The budget can cause financial anarchy as it lacks focus and is unsustainable. All the revenue projections are grossly exaggerated and impractical. It will lead to high deficit and inflation.
This transitional budget has piled up huge liabilities on any future government. This government’s talk of opening cooperatives smacks of the Panchayat era where the government would open Sajha to cater to the needs of the people. I do not see any programmes to encourage private industries.
Dr Jagdish Chandra Pokharel
Former vice-chairman, National Planning Commission
The budget is quite bold, although there are innate problems. It will face challenges in both raising revenue as well as in spending on development. Last year, the government was able to spend only about Rs 42 billion on development.
It will be easier to spend on relief and welfare, but capital expenditures that require fulfillment
of due procedures will be difficult. Villages that have less capacity and less resources will be affected. There is also doubt about the macroeconomic implications of such a large budget. We doubt that inflation will be limited to 7.5 percent. The major departure is on social security, especially for people in remote areas like Karnali.
The government has also taken bold steps like providing 0.5 percent of property transaction fees to Bagmati civilization. That’s a good idea. It has also shown commitment in controlling substances like tobacco and alcohol. The rest is mostly continuity of previous policies.
However, we should try to see the bigger picture by linking the budget with the government’s policies and programmes. Although most of the programmes appear to be the continuity of previous regimes, we should try to understand why the new government is talking about a break with continuity. It is talking about break in continuity in relation to the role of the government and political parties in the developmentprocess. It has rearranged statistical evidence to make a different historical assessment and draw a different conclusion. We are only seeing the preliminary building blocks of the Maoist policies.
They are likely to lead the country towards greater role of the state and greater involvement of political parties in the development process.
They don’t trust the bureaucracy and believe that the political machinery must be engaged. This is what they mean by a break with tradition.
Dr Shanker Sharma
Former vice-chairman, National Planning Commission
The new budget is really over-ambitious and there is too much over-programming. I think, in terms of priority to sectors, nothing was missed out.
The budget has also mentioned increasing foreign aid by 100 per cent — a factor which would be certain to increase dependence on donors. It is a glaring example of over-programming.”
While cautiously praising the experimental budget Dr Sharma said, “The budget’s inclusion of cooperatives, infrastructure development and youth development programmes’ implementation is quite appreciable. He also pointed out that The budget has also said that Nepal Airlines Cooperation (NAC) in collaboration with the government will increase the size
of its fleet.
Dr Sharma said, “This is the same budget which was ineffective in the earlier days and it is being repeated. The new budget seems to have included nearly all sectors, but I think it won’t be sustainable and its effect can easily been predicted from the very next year. In the context of Nepal, resource mobilisation is difficult and foreign aid also cannot be utilized.”
He warned that revenue would not reach higher than Rs 10-11 billion and added that at least Rs 2-4 billion would be overdraft and thus raise inflation.
Dr Dilli Raj Khanal
In my opinion, it’s a good try to take the budget in a new manner. There is the inclusion of many sectors in the new budget and in the near future the outcome can be very serious if it does not fulfil expectations accordingly. It has created new hopes for many sectors which were ignored for years. The budget has generated expectations among the people in general but unless and until the genuine framework that I made regarding the budget is implemented it may disappoint the people. The revenue section of the budget was somewhat satisfying, but I feel that if it were to fail in the long run it will create frustration. Simply put, the budget is over-ambitious.
Dr Bishwamber Pyakurel
The budget has included every sector, and I think it was designed in a way that it might be implemented successfully. The budget allocations will be scattered in different sectors and this will have short-term benefit as the state’s mechanism cannot expand the allotted budget. Expansion allocation by revenue is over-ambitious and I think Rs 30-32 billion cannot be invested in Nepal.
The budget itself was declared two months late and it will take a lengthy interval to reach the assigned villages, which is alarming. It is nice to hear the new budget has touched many such sectors which were not getting right notification earlier, like Health, Employment and Hydropower. This shows the good aspect of the budget but as a whole it is an expansionist budget. It has another good aspect in that it has targeted disabled people and aimed at prolonging their life expectancy. The budget has large amount for the villages but if the allotted amount doesn’t get invested there, it will be no use.
In comparison to the previous budget, this one is more expansionist. The Finance Minister has said that Nepal Rastra Bank will bring a new monetary policy but I think even it cannot make perfect money allocation.
Truly speaking, the new budget is quite expansionist and it might result in inflation.