Kathmandu, July 10, 2006

The government, following a historic political change, is set to announce budget amounting to about Rs 145 billion for the fiscal year 2006-07, despite a resource crunch.

Last year the size of the budget was about Rs 126 billion.

This year’s budget is estimated to be more than 15 per cent in comparison to last year’s. The budget is likely to be presented on July 12, according to a senior official at the MoF.

Finance minister will present the budget outlay in the parliament on Wednesday if last time ‘adjustments’ are not made. As per the new budget estimates, the government is allocating Rs 85 billion under recurrent expenditure while Rs 50 billion has been earmarked for capital expenditure, says the source.

The recurrent expenditure is estimated to go up by about 13 per cent while capital expenditure is up by 35 per cent compared to the last fiscal year. For principal repayments, the government is earmarking about Rs 10 billion.

MoF officials said that the government has liberty to change the budget figures by one or two billion rupees even at the eleventh hour due to ‘political’ reasons.

Similarly, the government is making the village development committee (VDC) budget double from half a million to more than one million rupees with a view to boost equitable development.

Similarly, the rural investment package is being introduced with a purse of two billion rupees in an initial phase, according to the senior MoF official.

Government employees are getting ‘dearness allowance’.

NC MPs want Sitaula out over 8-pt pact

Today’s meeting of the NC parliamentary party saw Home Minister Krishna Prasad Sitaula coming under intense pressure to resign as both Home Minister and Coordinator of the government talk team.

The meeting will continue tomorrow.

Quite a few lawmakers found fault with the 8-point understanding Sitaula brokered on June 16 when he brought Prachanda to the official residence of Prime Minister Girija Prasad Koirala.

The clamour for the Home Minister’s resignation has been mounting since yesterday when Prime Minister Koirala, in his letter read out in parliament, steered clear of the 8-point understanding, laying stress on the role the parliament should play.

The 8-point understanding envisions election to a constituent assembly after the formation of the interim government following the dissolution of the House of Representatives.

Sitaula has been facing the wrath of MPs although he has been busy reassuring them that the parliament would be dissovled only after ensuring the nation does not enter an altogether new and uncharted course once again.