Economic activities can pick up only when the maximum number of people have been vaccinated to achieve herd immunity
Finance Minister Bishnu Prasad Paudel on Saturday presented a budget of Rs 1.65 trillion for Fiscal Year 2021-22 in the midst of the coronavirus pandemic that threatens to continue impeding economic and other activities in the next fiscal just as it did this year. The budget is 11.73 per cent, or Rs 173 billion, larger than that of the current fiscal year, although it is uncertain when the virus will finally be overcome and economic activities can jump-start. Of the total budget, Rs 678.61 billion has been earmarked for the federal government's recurrent expenditure, Rs 374.26 billion for capital budget (22.7 per cent) and Rs 207.97 billion (12.6 per cent) for financing.
And grants to the provinces and local levels make up Rs 386.71 billion, or 23.5 per cent of the total budget, which unlike in the previous years have not been included under federal recurrent expenditure.
In a welcome departure, the biggest chunk of the budget has gone to education with an outlay of Rs 180.4 billion, followed by Rs 163.4 billion for physical development, namely construction of roads, tunnels and bridges, and the health sector (Rs 122.7 billion).
The budget was unveiled by the government on Jestha 15 (May 29) as provisioned by the constitution of Nepal–2015, and for this President Bidhya Devi Bhandari had issued an ordinance as the House of Representatives remains dissolved. Since writs against the dissolution of the House have been filed in the Supreme Court by the parties opposed to the incumbent government, the legitimacy and validity of the budget just presented have been questioned. Should the Supreme Court reinstate the Lower House, as it did in February during the first dissolution, the government must table the budget in the Parliament, which must be validated by its members within 60 days.
Given the coronavirus scourge, it is only natural that the health of the people should be the priority of the government. The government has, thus, allocated a whopping Rs 122.7 billion for the next fiscal year, up from Rs 90.69 billion in the current fiscal, largely to bring the pandemic under control. The budget will be used in the prevention and control of COVID-19, free testing for the virus in government hospitals, mass vaccination programme, construction of hospitals for contagious diseases, extra perks for the health workers engaged in the treatment of COVID patients, and adding ventilators, ICU beds and oxygen plants in hospitals. Bringing the pandemic under control will largely depend on how soon the country can immunise the 72 per cent of the population aged 14 and above as targeted. For this, the budget has earmarked Rs 26.75 billion. Mere allocation of resources, however, does not guarantee availability of vaccines. With less than 5 per cent of the intended population immunised against the coronavirus so far, the government must engage in vaccine diplomacy to secure the needed amount of vaccines.
Economic and all other activities can pick up only when the maximum number of people have been vaccinated to achieve herd immunity. Only then can the government expect to achieve the ambitious 6.5 per cent annual growth the budget has envisaged for 2021-22.
A version of this article appears in the print on May 31, 2021, of The Himalayan Times.