‘Govt will form a high-level monitoring mechanism to implement budget’

The earlier government led by the CPN-UML was toppled after having presented the budget for fiscal 2016-17 and a new government was formed with the Maoist-Centre and Nepali Congress as alliance partners. Two bills — Appropriation Bill and Vote on Account Bill — that are related to the budget had already been endorsed by the Parliament before there was a change in government. But three other bills related to the budget that were tabled by the earlier government were rejected by the Parliament and need to be tabled again. However, the government has not tabled the bills in the Parliament yet. It is reported that the government is preparing to bring a supplementary budget and is making necessary amendments in the bills to manage the resources before submitting them to the Parliament. Sri Ram Poudyal, Economic Adviser to the Prime Minister, spoke to Pushpa Raj Acharya of The Himalayan Times on the preparation of the supplementary budget and budget implementation issues. Excerpts:

The Appropriation Bill and the Vote on Account Bill have already been endorsed by the Parliament but the new government has not yet tabled three subordinate bills — the Finance Bill, the Bill to Raise Domestic Debt and the Loan and Guarantee Bill — in the Parliament. Why has there been a delay in tabling these subordinate bills in the Parliament and by when can we expect the government to do so?

The prime minister in his address to the Nepali people through Parliament last week had made a pledge to raise the amount of grant for the earthquake affected households and provide other facilities to low income people, among others through a supplementary budget. We are at the moment doing the groundwork to incorporate the prime minister’s pledge in the supplementary budget. The government might make amendments to the Bill to Raise Domestic Debt and the Loan and Guarantee Bill to mobilise the required resources through domestic debt and foreign assistance. The government could mobilise more foreign assistance. On the other hand we have Rs 127 billion reserve funds of last fiscal year. We need to work out on how much additional resources will be required to implement the programmes announced by the prime minister. The Resource Committee meeting will be organised very shortly to discuss on how much resources can be made available to implement the programmes. Thus, the supplementary budget will be formulated and then the government will table the supplementary budget and the subordinate bills subsequently for the Parliament’s approval.

The Finance Committee of the Legislature Parliament has already instructed the government to table the subordinate bills at the earliest. But why is the government busy formulating a supplementary budget and not abiding by the instructions of the Parliamentary panel?

Concerns raised by the Parliamentary panel are very much relevant and the government will soon table the bills for endorsement in the Parliament. However, the Parliamentary panel has not said that the government cannot bring a supplementary budget. The government can bring a supplementary budget if it has to spend for the programmes that are not included in the budget as per the provision of the constitution. The government’s works have not been affected because the Appropriation Act is already in place and the government has been collecting revenue under the provision of Periodic Tax Collection Act. This act allows the government to collect taxes in the transitional phase till the Finance Bill is approved from the Parliament. In the meantime, the government has to spend for additional liabilities while raising the house reconstruction grant to the earthquake-affected households. The Appropriation Act for this fiscal has not allocated resources to extend Rs 300,000 grant, and interest free and subsidised credit for the quake-affected households. The government requires additional resources to raise the grant amount for quake-hit households and for other programmes like rescuing the migrant workers who have lost jobs and are detained in labour destinations, among other issues. This is why the government is preparing to bring a supplementary budget.

Prime Minister Pushpa Kamal Dahal had announced the government would increase grant by Rs 100,000 for reconstruction of individual houses that were damaged by the earthquakes of last year. How much more resources will the government require for the increased amount and for the interest free and subsidised credit for affected households?

We have not calculated the actual amount that the government will require for these aforementioned purposes. But I think the government will need to mobilise an additional Rs 80 billion on top of the grant amount announced earlier. But we do not require the entire amount within this fiscal because the housing reconstruction grant will be distributed in three instalments of 25 per cent, 40 per cent and 35 per cent, respectively, to the quake victims. The government at the moment is distributing the first tranche of the grant. After receiving the first instalment the affected people will start building their houses and the second and third tranche of the grant will be distributed in different phases of construction.

In his address, the prime minister announced that the government will distribute pension to farmers. However, there is a huge chance of the fund being misutilised because the government does not have any proper data base and also lacks effective mechanism to implement such schemes. What is your take on this?

The government will develop a guideline to govern the fund under the programme. Our target is to support landless, deprived and low income farmers. First, we will develop a guideline for the pension programme announced for farmers. The budget has allocated a fund for the study of Farmer’s Pension Programme. Through the supplementary budget, the government will try to implement the programme from this fiscal.

What will be the major areas that the supplementary budget will focus on?

Mainly, the government is preparing to bring a supplementary budget to arrange expenditure for the additional grant support that has been announced for the quake-affected households and the government will allocate needful resources for entrepreneurship development programme at the grassroots level. Similarly, the supplementary budget will incorporate other issues that were announced by the prime minister.

You mentioned that supplementary budget will focus on implementing the issues announced by the prime minister in the Parliament. So, can we take this address as the policy and programme of the new government?

We cannot take the prime minister’s address as the policy and programme of the government. The prime minister has addressed the people to make them aware on how his government will work and what the priorities of the present government are. Most of the announcements made by the prime minister are already included in the budget of this fiscal and there are some that need to be included. The gaps will be filled through the supplementary budget.

There is a widely shared view that the government does not have ownership of this budget, so its implementation will remain poor. What do you have to say on it?

The government has fully owned this budget because the ruling party — Maoist-Centre — was one of the major coalition partners in the earlier government.  I have seen that the government leadership is fully committed to implement the budget. After assuming office, the prime minister called all the secretaries and asked them to develop an action matrix to implement the budget. Project executing agencies have been instructed to ensure timely delivery as per the action matrix. Apart from that the government is preparing to form a high-level monitoring mechanism for project implementation. The government is trying its best to end the permanent problem that we have in implementing development projects. It will facilitate the project implementing agencies to implement the projects in a timely manner so that the perennial issue of cost and time overrun in developing projects can be addressed. Government has an aim to spend 80 per cent of the allocated capital expenditure this fiscal to move towards a higher growth trajectory as envisioned by 14th three-year plan.