Taking things too far

In just over a week, a new fiscal year (2008-09) commences. A new national budget is required by that time. On the eve of Budget Day, the finance ministry brings out a national economic survey for the closing year, and before it, the head of state is supposed to read out the government’s annual policy and programme. It is three months since the election was held to the Constituent Assembly cum Legislature-Parliament. But a new government is yet to take office as yet. The disruption of the House proceedings for days on end has rendered government formation before year-end highly uncertain. Government formation, first of all, requires election for the first President of Nepal and the power-sharing agreement between political parties. This reminds one of a similar delay in handing over power to the new people’s representatives some fifty years ago after the first multiparty parliamentary election in Nepali history.

All this holds adverse and wide-ranging implications for the country, not the least for the national economy. For the first time in Nepal, national budget is not going to be announced. No less rare will be an amendment to the Constitution to enable the government to carry on financial transactions as usual through a vote on account (Peshki Kharcha) Bill. Finance ministry officials have said that all legal preparations are in place, and that the government will not announce any new programme, project and policy. Political leaders have disclosed that according to a three-party understanding, a supplementary budget will be unveiled in three months. That means the country will not have a full-year budget. The vote on account Bill is passed every year, but only to take account of the natural, unavoidable time lag between the announcement of a budget and its passage in the parliament after full debate, not as a substitute for the budget itself.

The proposed way out, as a number of businessmen and economists have rightly pointed out, will send totally wrong signals to the public, as well as to the donors, and about the state of politics and economics in the country. The political parties’ pledge that the CA election would end the political uncertainty has proved false. The substitute measure will not inspire investor confidence, and the country’s development will suffer further. It has also set a wrong precedent. There was enough time to form the government, but it was not allowed to take shape, for the sake of the narrow interests of one or more parties and certain political leaders. This shows how lightly they have taken the crucial importance of national budget presentation. After complicating matters irrevocably, they are taking an easy but risky way out, because the nation cannot be brought to a halt at year-end. The CPN-Maoist, the largest party in the CA that may lead the next government, will face a dilemma — to approve the Bill or not, as either course will have negative implications. Carrying on through advances is likely to throw up other economic and practical problems. The damage has been done; now everybody should think of controlling it. The only damage-limiting act would be the formation of a new government without further delay.