A peek into the budget: Far from satisfactory

Nitish Shrestha

June 8, 2020


A peek into the budget: Far from satisfactory

KATHMANDU: The budget has always remained a matter of interest and concern for every citizen — be it the general public, politicians, bureaucrats, or the private sector. They all have wide expectations from the budget in their respective sectors and interest areas.

The recent budget, unveiled by Finance Minister Dr. Yubaraj Khatiwada is under public scrutiny and some concerns are beginning to surface.

Unlike in the previous years, this year’s budget, holds a special significance as it will be a turning point to rebuild the country’s economy, post the COVID-19 pandemic.

For a socially and economically diverse country like Nepal with a Federal structure, the government needs to allocate resources wisely and effectively.

While the general public expects the budget to provide more social security, less tax, incentives, and initiation of priority development projects, the bureaucrats may even expect a rise in their salary and other facilities.

Likewise, the private sector expects special provisions for doing business in the country and the politicians expect more facilities and resources for development works, especially in the regions of their interest.

It is natural for all of them to hold these expectations from the government’s budget. However, Nepal’s national budget presented for 2077-78 has not been able to meet the expectations of the people.

The major concern now is how the budget can be allocated on a common ground that satisfies the requirements of all sectors without a conflict.

One of the major reasons for concerns of the budget is on how a budget is planned and unveiled in Nepal. The budget here is classified by the Ministry of Finance(MoF).

While planning and preparing it, a budget ceiling, and budget policy guidelines are provided to all ministries. All the government offices have to present their budget to the National Planning Commission (NPC), considering the budget ceiling and the budget policy guidelines.

After approval from the NPC, the budget goes to the budget department under the Ministry of Finance (MoF) where final discussions and necessary corrections in the budget are done.

For development projects, NPC and MoF conduct discussion and interaction with the counterpart donors to identify whether their commitments along their government counterparts’ funds are correctly reflected.

The MoF also holds numerous discussion sessions with the private sectors, including the banks, the Finance Committee of the parliament and expert economists.

The MoF also seeks public opinion and suggestions via the suggestion box. However, the suggestions and opinions of the concerned people are often not addressed properly.

Not even 10% of the suggestions made by the experts will be recognized in the national budget. As a result, conflict and dissatisfaction between the government and other sectors are generated. The way the government has been working for the formation of the national budget needs reconstruction.

The suggestions presented by the private sector, the finance committee of the parliament, economists and the general public is based on their long experience.

If their suggestions are not to be addressed accurately, the discussion programs are just a waste of time. The suggestions provided to the government shouldn’t be undermined but rather analyzed and implemented.

The private sector plays a crucial role in flourishing the economy and help decreasing the trade deficit. Hence, the suggestions from the private sectors should be taken into account as it is truly based on reality and based on their on-the-ground experiences.

Similarly, it is essential to incorporate the values and opinions of bureaucrats as they are the ones who will be implementing the new plans and programs of the government.

Meetings for exchanging views/ideas with bureaucrats from different government offices must be conducted, to understand their needs and requirements. Motivating them leads to an effective and efficient working environment.

They should also be provided incentives for effective use of funds and for implementing transparent modes of procurement and for ensuring   efficient public service delivery.

In the present context in Nepal, people had high expectations from this year’s budget as it was supposed to be a support system to recover the impact of COVID-19.

However, it seems that the government couldn’t address ongoing problems. This year, the budget seems to have been allocated randomly in various sectors.

The implementation of the plans and programs is unrealistic; some say next to impossible. A realistic stimulus package hasn’t been introduced by the government to overcome the loss and addressing the impact caused by COVID-19.

The relief packages are rich-oriented which, on the contrary, should have been need oriented, including addressing the most vulnerable. Even the government account of the COVID-19 fund is not considered   transparent and numerous questions have been raised on the intention of the government.

The government should not be proud of their decision to employ 200,000 unemployed people, it is not enough and the need is much bigger.

More than 500,000 people in Nepal are left unemployed every year (It should be noted that every year more than 500,000 youths graduate Secondary Education Examination SEE, while numerous youths in the village have no access /opportunity to attend SEE).

With the impact of COVID-19, almost 1.1 million Nepali migrant workers are anticipated to return to Nepal whereas almost 500,000 people in Nepal itself might be victims of staff lay off.

The budget reflects the lack of planning and preparedness of the government for fully addressing employment needs. Alongside this, it shows how the government has been neglecting the present and future of the country.

The current frustration and dissatisfaction towards the government clearly show the   importance of more effective pre-budget discussions and recognition of people’s suggestions.

Additionally, the government must ensure transparency on the progress of work. There is a serious problem of transparency in Nepal which must be eliminated.

Transparency among the public must be maintained in order to ensure that the government’s fiscal operations and handling are more comprehensive and transparent. It is also essential to ensure macroeconomic stability and consistency in the economy.

With proper planning and recognition of suggestions provided by people, the conflict between government and public regarding budget can be reduced if not eliminated. This approach will be a big positive change for the country.

(With inputs from Swastik Aryal)

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