Budget Vox Pop
May 30, 2017-Finance Minister Krishna Bahadur Mahara unveiled budget of Rs1278.99 billion for fiscal year 2017-18 on Monday. With 22.02 percent increment in the budget size, the government has set a target of 7.2 percent economic growth in the next fiscal year. Similarly, the government plans revenue mobilisation of Rs 730 billion in the fiscal year 2017-18. Sanjeev Giri of The Kathmandu Post spoke with former bureaucrats, economist and private sector leaders about the budget presented by the government. Excerpts:
President, Federation of Nepalese Chambers of Commerce and Industry (FNCCI)
The budget for the fiscal year 2016-17 doesn’t have much to offer for the private sector. That is also because of the limitation of the government as second phase of local election is in the offing. The positive aspect of this year’s budget is that the government has allocated resources to the local level. Likewise, allocation of resources for national pride projects and other major projects seem to be good. This will ensure that the capital expenditure will increase in the upcoming fiscal year. The government, however, will have to focus on the implementation aspect. We can look forward to higher growth rate only if the government succeeds in taking proper care of the implementation aspect.
Former Vice Chairman of National Planning Commission (NPC)
Apart from some alteration in figure and some hidden programme, the budget for the fiscal year 2017-18 is a continuation to the budget of current fiscal
year. The size of budget has been bloated. Given that the government is a caretaker it should have increased budget size by around 10-12 percent but it has chosen
to increase budget size by 22 percent instead. Local level has been allocated with resources but there isn’t a proper distribution mechanism. Some of the programmes like generating 17,000MW energy in seven years seem to be too ambitious. I would be really happy if we could achieve 7,000MW in the same period. This shows that the budget lacks maturity.
Former Finance Minister / CPN-UML leader
The budget has been tabled by a caretaker government. Hence, it doesn’t have accountability. Programme and policies that cannot be implemented have been incorporated in the budget. Though the budget was supposed not to incorporate new plans and policies, words like ‘amendment’ or ‘alteration’ have been used.
This is quite critical and we will go through the document thoroughly. Likewise, some of the important social programmes initiated by the previous government have been discontinued. This shows that the government is biased. The budget lacks focus on key national pride projects like Mid-Hill Highway and Postal Highway. It also lacks focus on projects that are already being commissioned currently.
Senior Vice President, Confederation of Nepalese Industries (CNI)
I see this budget in a positive light. That’s mainly because it has come on time. I hope this sets a precedent for upcoming government. Likewise, it has promoted the concept of federal structure that the country has adopted. Empowering local level will certainly have positive impact in country’s economy. On the other side, we had expected the government to come up with policies that would have macro level impact which didn’t happen due to political reasons. Plus there isn’t any incentive for the private sector.
Rajesh Kaji Shrestha,
President, Nepal Chamber of Commerce (NCC)
We were quite excited about timely budget. However, all our energy fizzled out as the government didn’t incorporate new plans and policies. There is nothing for the private sector in this year’s budget. We understand that the government should take stock of election code of conduct while unveiling budget for the upcoming fiscal. But, we were hopeful that there would be some sort of policy adjustment. Nothing has happened. The only positive aspect of budget for the upcoming fiscal is that the government will be injecting capital to the local level and hence we expect expenditure to remain intact.
Though the size of budget has increased by 22 percent, there isn’t anything new. The private sector had urged the government to address some of the financial issue in the budget of fiscal year 2017-18. And those suggestions were doable. The suggestions were charted out, keeping in mind the limitation of the government. For example the government could have initiated the process of amending Financial Bill. We had also asked government for better inter-ministerial coordination. Such aspects, I suppose, could have been incorporated in the budget speech. Likewise, we had asked the government to revise customs rate of some of the products and that was related with products whose cost of raw material import is higher than that of finished goods. So, I would say it was a letdown for the private sector.
Former Finance Secretary
The budget for the fiscal year 2017-18 has given an impetus to the process of implementation of federalism in the country. Budget size is a bit big. The budget size should have increased by just 10 percent compared with the budget for the current fiscal year.
I really appreciate the government focus on national pride projects and other key projects. It is praise worthy as the amount seems to be enough for the
upcoming fiscal. There’s nothing for the private sector. The budget is largely quiet about the expansion of investment, foreign direct investment and benefits that
can be ripped after being a signatory of China led Belt and Road initiative. All in all, the budget prepared by the government which doesn’t have much leverage due to election code of conduct is satisfactory.
Ram Prasad Gyanwaly,
Head, Central Department of Economics,
There isn’t much in this year’s budget as it is a continuation to the last year’s programmes and polices. The government has allocated resources directly to the local units which is praiseworthy and supports the idea of adopting federalism. However, expenditure mechanism of local unit is questionable as there isn’t any specific model for it. The ratio of Gross Domestic Product (GDP) to budget is 50 percent which is excessively high. Likewise, I doubt if the government has ability to spend resources as prescribed by the budget. Keeping inflation rate under 7.2 percent will be a herculean task for the government. Aspects like discouraging hundi, promoting health insurance and regulating International Non-Government Organisation through local bodies should be appreciated.
Budget for the fiscal year 2018 seems okay given the fact that local bodies need a lot of transfer for initial set up. There isn’t proper basis for achieving 7.2 percent growth target. Growth target is ambitious as it is much difficult to grow from larger base than a near zero base. Implementation aspect will be quite challenging for the government as there isn’t substantial change in spending process and advance preparation. Likewise, two more rounds of election in the fiscal year 2017-18 will affect capital spending. Also, local bodies won’t be able to pick up projects and start spending as they lack capacity on procurement, project proposal and appraisal.
Published: 30-05-2017 09:02