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Publication Date : 31-10-2012
The current festive mood and holiday euphoria in Nepal may soon end in a financial fiasco due to the absence of a full government budget. As the current one-third budget elapses on November 15, the country will be without a budget from November 16 if no new budget is issued by then. But it is difficult to bring the next budget without forging a consensus among the major political parties, and such an accord seems unlikely to happen within this month. Though only a little time is left, there is no indication of a serious and productive discussion being held between the government and the opposition. And any unilateral attempt by the incumbent administration to bring the next budget will surely meet stern opposition from the opposition parties, and it is unlikely to be approved by the president too.
The severe consequences of not having a budget are well known to everyone and needs no further elaboration. At the least, it will cripple the economy and public systems. A budget vacuum is never desirable, and it will not do any good to any country; hence, this situation must be avoided at any cost at all times. Even then, the parties and the concerned leaders have not been taking it seriously. Instead, they are trying to do politics with the budget and exploit the sensitive situation to meet their political objectives.
As a national budget is the government’s most important economic policy tool, the sitting government does have a greater say and role in preparing it. The budget translates a government’s policies, political commitments and goals into decisions on how much revenue to raise, how it plans to collect it, and how to use the funds to meet the country’s pressing needs and priorities. Hence, the opposition should not always be negative about it and create unnecessary hurdles in the budgeting process. Regardless of who is in government, the national budget should be prepared annually in a systemic manner, and a well functioning budget system is crucial to developing sustainable fiscal policies and economic growth in any country.
When there is a weak budget system and wrong budgetary choices, the national economy suffers badly. The budget system in Nepal, unfortunately, has not been working properly for the past several years. And it is at an even more dismal condition at the moment. The budgeting process that is an annual phenomenon has often been stalled, and even broken down to quarters and segments to meet political will and ambition. The budget at the moment is being used more as a political means than an economic policy tool. This is evident from how the budget process has been mired in political controversy and bargaining. Furthermore, every government wants to bring a populist budget instead of a practical and sensible one for the sake of short-term gains for the ruling party or the governing alliance.
In a normal situation, it is not unusual for political parties to see the budget process as a political event conducted in the political arena for political advantage. But Nepal now is in an abnormal state and utter political uncertainty. The country presently has no Parliament, and it is being run by a caretaker government which, in principle, is waiting to be replaced anytime. Hence, it will not be prudent to bring a budget based on the agenda of the caretaker government and its political alliance. Given its wide-ranging implications on the people and national economy, the budget should certainly be the subject of significant scrutiny and debate. And any budgetary policy and allocation having a long-term impact on the country should be discussed and agreed upon by all the key stakeholders. The country should not be kept in a budgetary vacuum, a state of financial indecision and policy paralysis. Therefore, a common minimum understanding must be reached among the key stakeholders, and a full budget should be issued before the current partial budget expires.
In a democratic political system, political parties have their own political agenda, approach and point of view on key national issues. And it is perfectly fine for them to fight among themselves for greater political space in the country; but critical areas and vital issues like the national budget, basic economic policy, foreign policy, national security, public health and welfare should be kept out of political wrangling. A national budget can be prepared in a non-partisan way based on national priorities, long-term developmental needs and challenges. Nepal now needs peace, stability and development, so the annual budget should be focused on achieving these key objectives. As development is not possible with a little effort in a short period, a long-term development goal should be set up, and each yearly budget should contribute to this long-term goal. Hence, an ad hoc approach in national planning and budgeting should be avoided.
Regardless of the party in power, Nepal’s national interest, economic priorities and development challenges will be the same at any given time. So there should not be differences among the parties with regard to the budgetary approach and fiscal policy the country has to adopt. A professionally prepared budget based on the country’s needs, national priorities and national and international economic imperatives should be acceptable to all. Therefore, the key political parties should come to a common understanding soon and give a complete budget to the country before the end of this month. Unfortunately, it is rumoured that the incumbent government might bring another one-third budget instead of a full budget based on political consensus. This is absolutely not in the interest of the nation, and continuous fiscal uncertainty will badly harm the economy. So both the government and the opposition should behave responsibly and prevent the national economy from being crippled further.