The government has presented the largest budget of its kind in history of Rs 21 trillion. But the much-hyped budget is a bundle of mere sweet nothings camouflaged by verbal jargons
The much-awaited budget has finally come to the fore. Expectations were high among the people partly because it was the one being presented by the Gen Z supported government. More importantly it was the brainchild of Dr. Swarnim Wagley, who is widely acclaimed as an economist of the first water with experience of working around the globe. An Oxford graduate as well as a fine orator, people were naturally looking forward to a budget that would change the face of the nation.
A national budget said simply is a statement of the income and expenditure of a country. It can be a surplus or a deficit budget depending upon whether the income exceeds the expenditure or vice versa. It has basically two components – firstly the running expenditure and secondly the development one, which should be more in a developing country like Nepal. Unfortunately, it has been decreasing alarmingly in the past few years.
For this year, the total budget is of Rs 21.24 trillion with a running expenditure of Rs 12.7 trillion and capital expenditure of just Rs 431 billion. The revenue is expected to be Rs 14.05 trillion, making a deficit of Rs 6.57 trillion. The government has expected to secure a grant of Rs 61 billion and a foreign loan of Rs 249 billion. The rest of the expenditure is being met through internal borrowing of another Rs 410 billion.
Nepal has a long history of presenting the budget to the people. Accordingly, in the Lichhavi period, in the seventh century, during the combined regime of Siva Dev and Amshu Verma, the budget was published in the form of an inscription, which is located in Lele now in Lalitpur. It had allocated a maximum budget of 200 Manika, the local currency, for the health sector.
The other notable budget is of the year 1951, which was presented by then Finance Minister Subarna Shumsher after the fall of the Rana regime and ushering of the democratic era in the country. The total amount was Rs 52.5 million with a proposed revenue of Rs 30.5 million. This was mentioned by Finance Minister Wagley at the beginning of his budget speech.
Yet another budget was presented by Subarna Shumsher in 1959, but this time as the Finance Minister of the two-thirds majority government of the Nepali Congress (NC). The budget was of Rs 249 million. This budget was very interesting as it was a surplus budget. It has also been hailed as a nationalistic budget as the currency involved was all Nepali as against Nepali and Indian in 1951. Unfortunately, it could not be implemented as the democratically-elected government of B P Koirala was dismissed by King Mahendra.
After the restoration of democracy in 1990, and the formation of a majority government by the NC, the budget presented by Mahesh Acharya is still regarded as the best. The allocation of 70 per cent of the development budget to the rural areas was the most striking. It also privatised the government-run corporations giving a new direction to the economy of the country.
This budget also suffered a setback as the Nepali Congress government could not last long due to infighting in the party. The following government of the Unified Marxist-Leninist led by Prime Minister Manmohan Adhikari is also remembered for innovative measures such as the introduction of the Old Age allowance.
The other notable budget was presented by Dr Babu Ram Bhattarai when the Maoist government came to power after registering a landslide victory. Bhattarai made some notable innovations, such as scaling up of the national budget, introducing polluter pays principle, and establishment of a new Ministry of Urban Development. This government also could not last long as Premier Prachanda had to resign due to confrontation with President Ram Baran Yadav.
These budgets are remembered even today because of their distinctive attributes of one kind or the other. A similar budget was expected this year from the government of Balen Shah. Unfortunately, it could not measure up to the expectation. In fact, it least looked like a budget presented by a government which has come here to stay for five years for the first time in the history of the country. Nor did it take into account the economy of the country, which is not in good shape especially after the conflict in the Middle East.
From the Balen government, people had just expected good delivery, which it had indicated by the availability of vehicle licenses on the very day of passing the license examination. It had also made passports available in the form of home delivery. It should have continued with such corrective measures followed by the continuation of whatever was existing. In fact, it should have presented a small surplus budget as did B P Koirala's government in the fifties.
The government, however, presented an overambitious budget, the largest of its kind in the country's history of a little over Rs 21 trillion. It also presented an impossible proposal of raising Rs 14 trillion revenue, a feat which has not been achieved in the recent past. Yet another proposal of securing 7 per cent growth with only Rs 431 billion of capital expenditure sounded rather hollow. The budget seemed to favour the middle class whilst the average mindset is the need to do so to the poor.
The imposition of of 5 per cent value added tax for consuming more than 50 units of electrical power and 3 per cent equity fee on education and health have cast a shadow on even the bright aspects of the budget, such as raising the income tax slab to Rs 1 million in place of the existing half a million and the emphasis on Artificial Intelligence. The much-hyped budget is a bundle of mere sweet nothings camouflaged by verbal jargons.