Print Edition - 2014-07-06 | MONEY
budget talk: Implementation is key
Jul 5, 2014-
The current budget presented by our government was non-political and was free of populist programmes. We had prioritised common development agendas which were accepted by the NC-UML government. Hence, the budget makers should take cue from the current one. Rather than making the budget populist, distributive and political, the Finance Minister and his team should emphasise on common development agendas.
The biggest challenge for any government is to ensure the budget is fully spent. Sadly, for many years, we’ve failed on this front. That is mainly due to political instability. Frequent changes in the government lead to a situation where we have budget presented by one Finance Minister implemented by another.
Our development agendas have suffered a serious setback due to political instability. Hence, a stable government is key when it comes to effective implementation of budgetary resources. If a Finance Minister is allowed to table the budget consecutively for five years, it will definitely have an impact.
Secondly, the Ministry of Finance in itself is not an agency to spend capital. When it comes to budget implementation, the role of other ministries is crucial because they are the ones which spend the resources allocated in the annual budget. So there is a dire need for increasing their capacity for full implementation and utilisation of the budget.
Until line ministries are not made responsible for programmes under them and evaluation of the secretary or the head of the concerned projects/programmes isn’t done, the problem of budget implementation will continue. There are also issues with our legal framework and process. Especially, our Public Procurement Act and bylaws are defective. We need to strengthen them.
The upcoming budget, in my opinion, should focus on infrastructure with proper segregation.
Hydropower should be the first priority. Energy is not an infrastructure for development, but a prerequisite. Since we have enormous potential, the budget should give top priority to the energy sector.
Road connectivity should be given the second priority. Major infrastructure projects like Mid-hill Highway, KTM-Tarai Fast Track, Tunnel Highway and North South Corridor Highway should be focused by the new budget. Irrigation is another sector that should be prioritised, followed by agriculture, among others.
Since we now have a relatively stable political situation with an elected government in place, increasing the confidence of the foreign as well as domestic investors should be another priority. This calls for the launch of second generation economic reforms.
The first generation reforms were initiated by the government led by Nepali Congress and had yielded positive results. They were more of market oriented reforms which were easy to implement. The market was deregulated and several new acts were introduced, enabling the private sector’s entry into sectors that were closed earlier.
The second generation reforms, which the Finance Minister is currently talking about, should focus on strengthening the regulatory framework, reforming the system and effective implementation of programmes initiated by the government. This is a bit tough and painful task for the government. However, it’s high time the government did it.
(Koirala is former Finance Minister in the Khilraj Regmi-led technocratic government)
Published: 06-07-2014 10:57