- The budget should be implemented and not just be limited to paper
Jul 14, 2014-
The Rs 618 billion budget announced by the Finance Minister Ram Sharan Mahat yesterday has a little bit of something for everyone. The Constituent Assembly members, despite huge public outcry in the media, will now be receiving Rs 10 million as Constituency Development Fund which, though lower than their demand for Rs 50 million, is a significant sum. Government officials also have little room to complain as their salaries have been increased by a flat 10 percent. Likewise, there has been a Rs 50,000 hike in the income tax threshold clearly aimed at the growing middle class. Unlike in the past, the private sector has been quick to call the budget ‘investment friendly’ given its focus on infrastructure and energy in addition to various other incentives. Production-related industries with an investment of over Rs 1 billion, for instance, will now receive a full tax exemption for five years. The best news for common Nepalis, however, would have to be the promise to end power cuts in the next three years.
Still the priorities and promises of the budget are not new. The budget for the fiscal year 2013-14, similar to the current document, also prioritised agriculture, infrastructure and energy. A break from the past is an attempt to reduce unemployment among the young by providing loans for starting an agricultural business at only 6 percent interest rate. The government will further provide a 50 percent subsidy on loan for farm mechanisation and commercialisation. This is laudable as agriculture accounts for one-third of the GDP and employs three-quarters of the population. However, unless this provision is widely publicised among the young and farmers who want to expand their work, there will be little value to this noble plan.
Each year, the cumbersome process to access and release the funds in time hinders the implementation of the budget. Dashain and Tihar festivals which fall two months after the beginning of the fiscal year push back disbursement of funds. Often, this results in hurried implementation of projects well into the fourth quarter which is visible in the road patchwork across the country in June-July. The focus of the government should now be to function according to a calendar where tenders are called in time and the date for awarding contracts for infrastructure projects are not pushed back. In case of subsidy and social security programmes, they should be widely publicised among the intended beneficiaries. Bringing the Fiscal Responsibility Act to correct structural problems in allocation and spending of funds as mentioned in the budget would also go a long way.
More importantly, the Finance Minister should now ensure that the budget targets and priorities are implemented and not just confined to paper.
Published: 15-07-2014 08:59