The budget estimates of Rs. 285.93 billion for the fiscal year 2009/10 was presented Monday out of which Rs. 160.63 billion is proposed for recurrent expenditure, Rs. 106.285 billion for capital expenditure and Rs. 19.12 billion for principal repayment. Incidentally, the proposed expenditure is higher by 33.87 per cent than the revised estimates for the current fiscal year. The revenue target has been increased, but the utlisation of what is possibly generated will be a major hitch because of the lack of efficient channels to do so. While the projected growth rate is pegged at 5.5 per cent, the reining in of inflation rate to 7 per cent might not be translated into reality considering the fact that the government lacks the mechanism and the means to do so. With so many scattered programmes coming into focus, the populist tendency is more than marked.
After a nine-month experiment in distributive budget by the Maoist-led government, the country has reverted to the basic principles laid out in the Three-Year Interim Plan formed by the coalition led by Girija Prasad Koirala. Yet the budget, in trying to be too accommodative, has lost focus on key priorities. Furthermore, despite the lessons learnt, it insists on an ambitious revenue target and capital expenditure. They imply the need for political stability, which, given the current political situation, appears improbable. One of the key lessons learnt from the past year is that sound politics is the backbone of any effort at economic prosperity. Despite all the hullabaloo over the Maoist economic programme, the GDP at basic price for this year was only 3.8 percent. Apart from the weather and the global financial crises, all the other obstacles to growth were human made. Energy crisis, decline in capital expenditure, disturbed industrial sector and absence of local representatives were cited as the key reasons for stifled growth. All these factors have a common feature — they were all caused by political mismanagement.
The government is led by the CPN-UML, and it is natural for the party to try to seek to accommodate some of their favorite policies and programmes. Yet the burden of a 22-party coalition also reflects heavily in the budget. Instead of trying to focus on some key priority areas, the government has scattered resources in many areas. Though everybody appreciates the effort, nobody is particularly happy. Despite all these constraints, the budget has tried to impart hope by initiating some projects of national pride, investing heavily in the energy sector, and in focusing on the peace process and people’s welfare.
While populist ideals indicate the political parties’ tendency to put party politics above national interest, they also imply an inability to address issues of pressing concern. The time now is not to debate whether neo-liberal economics is better than socialist ones. The time is to stabilise peace and lay the foundations for future economic prosperity. The missing ingredient in the budget is peace and political understanding. Without them, no budget, however good, has any chance of having a positive impact.
The budget speech every year finds many glued to their TV or radio sets all with the hope of getting a piece or two of good news to cheer the heart when the target fiscal year starts in earnest. Of course, the majority of the people have the same doubts on whether balanced diet for all would be something to reckon with. The price hike in every commodity is for real denting an average citizen’s capacity to get hold of the right balance of what constitutes a healthy diet for the family as a whole. If rice, wheat and lentil form the bulk, vegetables form the topping with fruits being the delight of the heart. Alas, getting all of them in the same bag is one painted with frustration all because the wallet doesn’t get the adequate sustenance through the wage earner’s toil. A ordinary person may put in extra effort and time to increase the income but the prices always makes it to the higher rung to be out of reach.
The tempting fruits and the vitamin and mineral packed vegetables are nothing better than a window shopper’s joy. The jargon-filled budget speech on Monday just forgot to mention how they could be a major participants in the meal of every person, rich or poor, high or low.