KATHMANDU: The caretaker government and the opposition parties are engaged in a seemingly never-ending dispute in terms of bringing the budget, pushing the country further towards economic and political abyss. Claiming the government is trying to bring the budget unconstitutionally, the opposition parties have requested President Ram Baran Yadav to reject the budget, if it is endorsed without political consensus. The president has also reportedly said the budget be brought as per consitutional provision. Whereas, amidst mounting pressure, the government is gearing up to bring a full-fledged budget through ordinance, even if it is without political consent.

Taking a stand“Government is planning to endorse full budget, as there is no alternative to it,” says Deependra Bahadur Kshetry, vice-chairman of National Planning Commission (NPC). According to him, the budget will exceed the ceiling of Rs 429 billion, estimated by NPC. The reason behind the escalation, according to him, is because of announcement of elections and increase in number of Maoist combatants opting for voluntary retirement. Kshetry says the budget will allocate around Rs 10 billion for the Constituent Assembly election and about Rs three billion for the compensation package for former Maoist combatants.

Kshetry further informs that the government also plans to bring out relief package for the poor by introducing a programme that ensures a minimum of 100 days of employment to the citizens. Beside these, the new budget will also address the acute shortage of fertilisers by incorporating the provision of setting up fertiliser factory. For this, private sector is encouraged to establish chemical fertiliser factories and according to Kshetry, government would arrange 100 MW power supply by initiating the construction of a separate power project.

Private sector peacemakersThe private sector representatives — Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC) — are also demanding timely and full budget. “We are making efforts to bring all the political parties to a common point on the economic agenda,” says Suraj Vaidhya, president of FNCCI, adding that there is no point in bringing a partial budget as it can neither address nor provide solution to the crippling economy.

Stating that budget has been a medium of power play between the political stakeholders, he maintains that the private sector would

accept a partial budget, but only if the government and other political forces guarantee formation of a new government within two months.

Likewise, Suresh Kumar Basnet, president of NCC, says, “Political consensus is a must to bring a full fledged budget for smooth running of the economy. If the government brings the budget without forging political consensus, it will invite protests from the political parties, which will ultimately hit the country’s economy hard.”

As the industrial and trading activities have suffered immensely due to load-shedding and bandhs, the private sector has also

demanded that a tentative loan be granted to Nepal Oil Corporation in the upcoming budget for smooth supply of gasoline. Basnet further states that the government should introduce favourable employment and labour policy to create an investment-friendly environment.

Vaidhya expresses hope that all parties will work for consensus on the budget, even if they are not in the same footing in terms of

political and power sharing.

Presenting optionsDemanding the timely budget, the private sector has been lobbying with major political parties. Vaidhya opines, “If the government cannot bring the budget on time, the banks will face liquidity crunch and interest rate will skyrocket.” Private sector has submitted a draft titled ‘Common Strategy for Sustainable Economic Growth’ to Prime Minister Babu Ram Bhattarai, which includes the short-, medium- and long-term goals for transforming Nepal, with an annual economic growth rate of more than seven

per cent within 20 years.

As per the draft, tourism, hydropower, education, trade, agriculture and infrastructure will contribute in achieving these three goals.

Along with urging the government to allow the private sector to develop regional airports in Pokhara, Lumbini, Janakpur, Nepalgunj and

Biratnagar, the draft has also called for amendment in the BOOT Act. The draft has also proposed making Lumbini into a centre of spiritual tourism, and opening new trekking routes in Mid-, and Far West Nepal. According to Vaidhya, if the budget implements the prescribed draft, the private sector will be able to create 3.5 million jobs in the next 10 years, similarly bringing USD 60 million through the foreign direct investment.

The draft has also recommended the introduction of three different entities — generation, transmission and distribution — for the development of hydropower in the country. Keeping the view of federal structure, the draft has also recommended that there should not be fragmentation of the national market in the name of restructuring.

In contradictionSenior Economist, Dr Biswambher Pyakuryal, on the other hand says that it is impossible for the current government to announce full budget. Explaining the reason for this, he says, “Firstly, it is a caretaker government. Also, the situation has changed

drastically from when this government was formed, as numerous parties have split. And secondly, in case it brings a full-fledged budget, then the next government will surely not own it.”

According to him, the government can bring only one-third of the budget through ordinance, thus providing space for the new government by addressing the expected inflation and social expenditure. However, Pyakuryal maintains that the projects that have been categorised as top priority and funded by donors should not be hampered and the agreement between two countries should be respected.

The fact remains that the current government has not only failed to forge political consensus to bring the budget, but also been unable to spend capital expenditure, thus increasing unemployment in the country. “Opposition and other political parties have lost trust in

this government and they are against a full-fledged budget. But if the government is adamant in bringing it anyway, there will be protests and anarchy in the country,” says Pyakuryal, further stating there are also high chances of distributing the budget and the surplus amount of the current fiscal year as per their own priority and vested interests.

“There have been multiple attacks in the market, inflation is high on consumable goods because of the informal economy,” he says, adding, “This government has totally failed to monitor and control the informal economy, which is as big as the formal one.” He further says that because of certain people who have a stronghold in the informal sector and porous border, inflation rate is likely to increase.