KATHMANDU: Former Finance Minister Minendra Rijal, the leader of the Nepali Congress, pinpointed more than six mistakes in the 2019/20 budget. Some of the mistakes were just errors in the language and presentation of the terms of the budget while some of the mistakes were blunders pertaining to misapplication of economic principles and rules of finance.
Rijal stressed specifically on two blunders of the budget while discussing it in the House of Representatives (HoR). Finance Minister Dr. Yubaraj Khatiwada proposed the estimated revenue collection of Rs 981 billion for this year, out of which Rs 130 billion will go to provincial governments. And the remaining amount of revenue will be deposited in ‘Consolidated Fund of the Federal Government’.
According to Adhikari, this third blunder in the present budget has not been discussed in the parliament and if our lawmakers discuss on it, it is well and good.
But, the Finance Minister has added up Rs. 102 billion (the amount to be given to provincial governments) to the estimated amount of total revenue collection thereby making it a total of Rs 981 billion to be deposited in the ‘Consolidated Fund’. What a mistake of simple mathematics! Finance Minister has already accepted the mistake and has agreed to correct it.
But, today we are discussing the third blunder that we bumped into it. The blunder is simply incorrigible so that it requires reframing and rewriting the entire budget. This third blunder has been traced out by Dr. Dadhi Adhikari, an economist at ISSR (Institute of Strategic and Socio-economic Research). According to Adhikari, this third blunder in the present budget has not been discussed in the parliament and if our lawmakers discuss on it, it is well and good.
What is the third blunder of the 2019/20 budget?
Finance Minister Dr. Khatiwada was found napping while inserting the numbers in the budget and made the mistake of Rs 134.4 billion by putting the same into ‘Consolidated Fund of the Federal Government’. In reality, the stated sum of money is to be transferred to the provincial and local level government. Moreover, Finance Minister has also botched up the mandatory instructions regarding under what headings revenue will be collected and to what level as provided by the existing laws of the land such as Interr Governmental Finance Management Act 2064 BS.
Further, in case the government reduces the current expenditure, it will be heaped with criticism. It is a classic situation of catch-22 Finance Minister Khatiwada has put the whole country into, Dr. Adhikari puts it.
The blunder perpetrated by the finance minister has led to project the total revenue of Rs 134.4 billion as the inflated amount which in fact should have been transferred to the provincial and local level government. Either the Finance Minister has to deduct the above revenue amount from the budget or just show the source of revenue from where it will come to state coffers. Dr. Adhikari says it is not a small adjustment that you transfer the amount here and there. “It is an onerous task to adjust Rs 134 billion,” he said.
So only option left before the Finance Minister is to rewrite the budget once again otherwise it is illegal and anti-constitutional to pass it in both the Houses of the Parliament and obtain the signature of the President, according to Dr. Adhikari. It amounts to make the illegal financial bill into a legal act. Moreover, it also deprives the provinces and local bodies of their due share of budgetary money, reasons Dr. Adhikari. If the budget is reduced by the stated amount, the capital expenditure will slide down.
Further, in case the government reduces the current expenditure, it will be heaped with criticism. It is a classic situation of catch-22 Finance Minister Khatiwada has put the whole country into, Dr. Adhikari puts it.
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