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Annual Budget For Fiscal Year 2017 (2074)

Issue June 2017

Annual Budget For Fiscal Year 2017 (2074)

Siddhi B Ranjitkar


Finance Minister Krishna Bahadur Mahara presented the annual budget for the fiscal year 2017 (2074) to the parliament. The budget did not included new programs and projects for two reasons: the election code of conduct is in effect so the government could not present any new program or project that might influence the upcoming second-phase local election, the second reason is the government is only officiating as the prime minister has resigned on May 24 paving the way for his colleague Sher Bahadur Deuba to take up. So, the budget is primarily for the continuation of the ongoing large projects. However, the finance minister has said that the budget aims at 7.2 percent economic growth and the inflation less than seven percent. The budget is another strong step to the enforcement of the Constitution, as the finance minister has allocated required resources for running the local governments and for the provincial governments.


On May 29, 2017, Finance Minister Krishna Bahadur Mahara stood at the podium in the parliament and read out the budget to the lawmakers for about two hours. Following the provision made in the Constitution, the government needs to present the budget on or before jesth 15 (May 29 this year). So, the budget has been just in time.


The budget has certain forward moving features such as it has done away with the need for the project and program implementers need to get the approval of the National Planning Commission and the Finance Ministry even after the parliament passes the budget. It would surely expedite the implementation of projects and programs in the coming year. The finance ministry will deposit the amounts allocated to the local governments and provincial government to the respective account immediately after the parliament passes the budget.


The government has to appease the opposition party: CPN-UML meeting its demands to make sure that the finance minister could submit the budget on time as the Constitution has prescribed for. So, the government met three demands such as withdrawing the motion to impeach the chief justice, setting up a commission on investigation into the allegedly irregularities in the first-phase election, and annulling the withdrawal of the cases against the culprits involved in the death of security personnel in Tikapur.


Then only, the CPN-UML lawmakers allowed the regular proceedings of the parliament. Then, the prime minister presented the policies and programs of the government for the FY 2017. Speaker set two days for discussing polices and programs of the government at the parliament. Then, the parliament hurriedly passed it with the majority votes paving the way for the finance minister to present the budget for the FY 2017.


Now, the parliament has to pass the budget. Probably, it will be only a formality, as the governing coalition of the NC and Maoist-Center has sufficient majority to pass it. However, the opposition CPN-UML has been obstructing the parliamentary proceedings demanding the counting of ballots continues in Bharatpur Metropolitan City, delaying the passing of the budget, and the parliament electing a new prime minister.


General Secretary of NC Shekhar Koirala said that the CPN-UML cadres had torn off ballots when the NC candidate was winning in 1996. The news on the on June 1, 2017 has it that CPN-UML had torn off ballots to avert the poll defeat in Baglung after its defeat was confirmed in the last local election held 20 years ago; “We were near victory. Vote counting of just one ward remained. But UML cadres tore the ballots and pulled out khukuris (sharp knife-like weapons) in the counting center. Our representatives and election officials had to run away to save their life,” NC candidate Koplia Mani Sharma a sure winner before tearing off the ballots told Setopati about the incident; CPN-UML leader in Baglung Surya Pathak, however, refuted the allegations saying, “We were leading by two votes and vote counting in Ward No 7 remained. There were some problems after that and the election was annulled.”


Another news on stated that the Maoist-Center volunteers participating in the ballot counting tore off 90 ballot papers to the extent of making them impossible to count. On Thursday, June 1, 2017, the Chitwan District Court released the Maoist Center volunteers who destroyed the ballots in Bharatpur on the Sunday midnight; they had torn off the ballots, as Maoist mayoral candidate Renu Dahal would surely lose the election to CPN-UML candidate Devi Gyawali, the news on the stated.


Political analysts said that the tearing off the ballot papers while counting the ballots in Bharatpur had nothing to do with the parliament. The Election Commission would take the appropriate actions against the culprits and do necessary things to continue the counting of ballots. If the CPN-UML lawmakers were to obstruct the regular proceedings for the reason not concerned at all to them would lead the parliamentary system to be doomed. Probably, the opposition would do the same thing when the CPN-UML would be in the government.


The budget is also for enforcing the Constitution. The budget has allocated the resources required for the local governments and the provincial governments. The finance minister has said that his ministry would deposit the amount allocated to the local governments and provincial government in their respective bank accounts after the parliament passes it. The government also is deputing the State employees to the local governments so that the local government could run office without any problem of human resources.


The Constitution has made the local governments powerful, and accountable to the people. Unlike the past governments, the local governments have been empowered with running development activities al local without going to the center for approval and resources. In the past, King Birendra went to inaugurate even a water tap built in the remote areas spending twice the amount of the price for building a tap on his helicopter ride. Birendra and his spouse queen enjoyed the two-winter months every year setting up a royal tent at Surkhet and then ride on helicopter from there to fly in the mountains to visit tiny villages, and see how the small development projects were going on there at the huge cost to the nation.


Such waste of national resources would probably not occur in the future because Nepal has no king that would waste the national resources. The social media and other regular media and the common folks in general had vehemently opposed the government declaring the State visit of the president to India, and then the government revoked the declared national holiday on the day of the return of the president from India. The president, prime minister and even the lawmakers don’t need to go to the rural areas for monitoring the development work. The local people would watch even monitor how their representatives have been running the local State business. The opposition parties also would work as a watchdog. Local beneficiaries would not leave anybody misusing the resources without retribution. They first might be smeared the local representatives misusing the local resources and budget with soot and take them around. Then they would probably bring those local elected representatives to justice.


The government did not come up with new programs and projects, as the second-phase election to the local units is going to be held on June 28, 2017, as the government postponed it for the Muslim community to celebrate the Ramadan. The government has already shifted the second-phase local election from the previously scheduled for June 14 to June 23. Probably, by then, the monsoon would set in and would not be so friendly to the voters going to the polls.


The opposition CPN-UML had been even saying that the government should not present budget without completing the second-phase election forgetting the provision made in the Constitution for presenting the budget at the parliament by jesth 15 (May 29 this year).


The budget could not be the full-fledged budget because Prime Minister Prachanda resigned from office on May 24, 2017; the government has been reduced to the status of officiating only. Prachanda quit the office for paving the way for his colleague Sher Bahadur Deuba to be the next prime minister upholding the gentlemanly agreement they had reached before Prachanda forming a government in coalition with Sher Bahadur Deuba. Quitting the office voluntarily, Prachanda said that he wanted to prove that Nepal has the political leader that keeps the words they have given unlike in the past most of the political leaders breaking not only the gentlemanly understandings even the written agreements.


President of NC Sher Bahadur Deuba has pretended to form a consensus government within the seven days the Constitution has provided him with but the opposition CPN-UML did not attend the all-party meeting Deuba had called thus paving the coalition of NC and Maoist-Center to form a majority government. Deuba claimed that the coalition has the support of other political parties; more than 350 lawmakers would be supporting him to form a new government.


The budget for the FY 2017 is NPR 1,278.99 billions. The budget is higher by 21.9 percent compared to the budget of the ongoing FY 2016. It aims at 7.2 percent economic growth, and it keeps the inflation within seven percent. So, the economic growth would not be offset by the inflation. Out of this budget, 62.8 percent is allocated to the regular expenses for running the State administration at the local units, provinces and the center; the local units receive 17.6 percent of the total budget; 11 percent goes for the financial management, and 26.2 percent for the capital expenditure.


The government has correctly put the emphasis on power projects and production probably making the country self-sufficient in energy within a few years most probably within five years if the government’s projection of power production comes true and if the government keeps its commitment to complete the power projects in time without hitch.


Power is one of the main ingredients for the socio-economic development, as power plays a significant role in every aspect of the human life. Modern humans could not live and move without power. They need power supply for climbing up and down the large commercial building and apartment buildings. Every house needs to pump up water or even from the city line, as the water supply is highly inadequate. Manufacturing industry could not operate without power; service and financial industries also could not run in their full capacities without smooth supply of power.


The projected economic growth of almost 7.5 percent in the ongoing FY 2016 that ends on July 15, 2017 is mainly attributed to the smooth supply of the power during the last ten months of the current government Prachanda presided over. The power generation and distribution have contributed to the economic growth directly and indirectly helping the manufacturing, service and financial industries to contribute to the high economic growth, as the smooth supply of power enabled them to operate fully. The smooth supply of power has contributed to the agricultural growth, as the farmers have the interrupted power supply to pump the underground water for timely irrigation of their farmland.


Again correctly the budget has given the priority to the infrastructures development. Prime minister Prachanda laid the foundation stone of the 76-km Kathmandu-Nizgad fast-track highway on May 28, 2017, and anticipated to complete it within four years. The Nepal Army is taking up the challenge of constructing this highly hyped highway project at the cost of NPR 12 billions. It would surely contribute to the economic growth considerably as the travel time between Kathmandu and Terai will be drastically reduced. The government also is intensifying the construction of the postal roads in Terai with the assistance of India. These roads will appreciably change the lives of the Terai people and contribute highly to the economic growth.


As the budget would directly contribute to the economic growth, the policies and programs of the government would help the private companies and individuals and cooperative organizations and agencies to contribute to the economic growth, too.


Unlike the State, the private companies and cooperatives are profit-motive organizations. They would invest their hard-earned money in the areas where they are sure to make money. However, the government had been hindrance to the development of the private sector. As soon as the private companies start of making money the government steps in to stop them. For example, the housing sector has developed many housing colonies and the private companies have been making good money. Then, the Central Bank steps in stopping the private banks giving loans to the housing companies. The private companies have set up teaching and regular hospitals in Kathmandu and elsewhere in Nepal but the government again stepped in to stop the issuing license for opening new hospitals under the pressure of one man called Dr Govinda KC. Anybody could guess judging from the large number of patients seeking healthcare services at every hospitals that there is a huge unmet demand for the healthcare service. Private companies have invested a huge sum of money in setting up the cutting-edge hospitals with the most modern equipment and tools because it pays back handsomely.


So, the government’s policies and program need to be investment friendly, and they need not be limited in paper and speeches of politicians and prime minister and ministers. Most of the time, these guys have been saying one thing and doing exactly the opposite. Then, the investors have difficulty in making decision on whether to invest or not. The decision-makers had been the rent seekers in the past scaring away the sincere investors.


The government has many tools to use for the socio-economic development of the country. The budget is only one. One of the main tools the prime minister and the ministers could use for the decision-making is the sincerity to the commitment to work for the country, and another tool is to be the persons of integrity rather than being the political comedians. Some politicians have been more than comedians making jokes of connecting every house with a piped gas line when the common folks had to use every possible fuel to cook at least one meal a day when our southern brothers blocked the border entry points and stopped any fuel coming to Nepal. Another Prime minister had joked that he would wash the streets of Kathmandu with the water of the Melamchi River when common folks had to save every drop of water to live a regular life.


These comedian prime ministers and politicians would have been well off if they were to stop the unscrupulous energy ministers from diverting the regular supply of power from the common folks to a few large industries that had probably provided those ministers with a large sum of money under-the-table possibly even over-the-table in the past. This had been the criminal act but none of the politicians had been able to point a finger at such ministers and those industries that had made a lot of money making the common folks and national economy pay for it.


When a few people make a lot of money means majority of the common folks become poor and suffer, as the national incomes remain the same no matter who makes how much. The government policies and programs have been to let the common folks pay for the rich people to make more money. For example, the income tax has been nominal and even allowed most of the people to evade such tax while strictly enforcing the taxes on the items common folks use daily. One of the taxes commonly known as the Value-added Tax (VAT) levied on everything including the restaurant meals has been hitting very hard on the common folks. However, many reported cases had been that some of the business people did not even submit the VAT amount they collected to the tax office. How could such thing happen if the people in power did not have a share in it?


Note: Fiscal year 2017 starts on July 16, 2017 and ends on July 15, 2018.


June 2, 2017

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