Friday, 17 September, 2021

Revised Budget Focuses On Economic Recovery

Amid the opposition's uproar, the finance minister Friday presented a revised national budget for the current fiscal year in the House of Representatives, which saw a downsizing in the budget, unveiled earlier by the erstwhile KP Sharma Oli-led government. The current government felt it necessary to introduce the revised budget in the sovereign parliament as the Oli-led government had brought its own through an ordinance after dissolving the Lower House unconstitutionally. In the meantime, everyone should denounce the UML lawmakers' non-parliamentary act of stopping the finance minister from presenting the budget.

Despite the UML’s opposition, the replacement budget carries with it many important aspects. With a target to achieve an economic growth rate of 7 per cent and keep the inflation rate at 6.5 per cent, the new budget has cut back about Rs. 15 billion from the earlier budget of Rs. 1,647.57 to 1,632.83. The downsising has materialised as the finance minister slashed government expenditures by reducing internal and foreign debt by Rs. 37 billion. Providing allowances to the poor and those suffering from chronic and terminal diseases is another significant step in the revised budget. The government has raised the amount of budget for COVID-19 vaccines to Rs. 5 billion. The patients with kidney, cancer ailments and those suffering from spinal injuries will receive Rs. 5,000 per month. Families of martyrs will have a monthly allowance of Rs. 3,000. Significantly, the finance minister has slashed about 10 per cent of the budget under the meeting, fuel, travel, training, monitoring and evaluation allowance headings. A cash grant worth Rs. 500,000 will also be made for extremely poor families. Also, those who have lost jobs due to COVID-19 will get a cash grant of Rs. 10,000 based on certain criteria. Food for the urban poor will be provided at very affordable prices through 10 outlets in the Kathmandu Valley.

Another significant aspect of the replacement budget is that it has suspended about 1,400 road projects that were launched by the previous government without carrying out proper study and preparation. The present government will prepare a road network mapping and policies to build roads at federal, provincial and local levels. To lure investments in the hydropower sector, the new budget offers a total tax exemption for reservoir and semi-reservoir hydro projects with a capacity of above 200 MW for the next 15 years. The budget further aims to bring Melamchi water to every household by mid-April 2022. For online media, the budget has made provisions to provide public welfare advertisements.

The key objectives of the replacement budget - reducing multidimensional poverty, reviving the sagging economy, achieving high growth, and building a socialist-oriented economy - can be achieved only when honest and effective implementation of the programmes are embedded in the budget. It is true that the government and its line agencies do confront many challenges while collecting revenues and spending them through a well-managed system. However, since the current revised budget is aimed at delivering its policies and running vital services in areas such as health, education, infrastructure and social welfare, the government must be wary and honest enough to implement all the budget targets effectively. Only then can the objectives of the replacement budget - economic growth, overall development and social welfare - be attained and savoured.