April 1: Prime Minister KP Sharma Oli is exerting pressure on Finance Minister Bishnu Prasad Poudel and other officials of finance Ministry to prepare a populist budget.
The Ministry of Finance is reeling under pressure following public statements given by the Prime Minister at public gatherings. Speaking at the anniversary programme of Reporters’ club, PM Oli said that elderly allowance will be increased from the next fiscal year. “Old-age allowance and social security allowance will be increased from July of the upcoming fiscal year. Most of the people may have objection regarding this which doesn’t affect me,” said Oli during the programme.
In the last election, the Nepal Communist Party formed after the unification of then CPN UML and Maoist Centre had announced to increase old-age allowance to Rs 5,000. Former governor of Nepal Rastra Bank Yuvaraj Khatiwada, who was then Minister for Finance, hadn’t increased the allowance in the current fiscal year pointing out to resources shortfall due to COVID-19. Currently, the elderly people get old age allowance of Rs 3,000 every month.
On the other hand, Khatiwada’s successor Finance Minister Bishnu Prasad Poudel has a political background so populist budget is his priority, informed a source close to him. One of the senior officials of Finance Ministry said Minister Poudel is also working to develop a populist budget in accordance to the announcements made by PM Oli. Prime Minister Oli and other parliamentarians are trying hard to have their favorable programmes included in the budget. Various groups visit MoF daily for this purpose and lobby with Finance Secretary or Minister for Finance.
“Though such acts of pressurizing the Ministry have declined, there are still a good number of people visiting the Ministry to have their demands addressed in the budget,” said Yam Pandey, personal Secretary of the Finance Minister.
Instead of introducing programmes to uplift the economy affected by COVID-19, speculations are rife that these programmes will be sidelined since the PM is pressurizing Finance Ministry to bring populist budget. Shantaraj Subedi, former finance secretary, says that the government should prioritize programmes to uplift the economy in this time of crisis. Though politicians always desire for a populist budget it is not beneficial for the economy.
Referring to the private sector’s dissatisfaction over this year’s budget program, Subedi said government should introduce implementation-oriented programmes that support the private sector. “Popular programmess to get cheap popularity should not be included at this critical time,” says economist Keshav Acharya. He shared that negative economic growth and rise in COVID-19 cases have worried the private sector so the budget should introduce programmes to assure the security of private sector’s investment.
According to Acharya, the budget should focus on existing infrastructure projects rather than adding new ones. A report of the National Planning Commission states that 120,000 additional people have been forced below the poverty line due to COVID-19. The budget should attempt to include these people in its programmes, says Acharya.
