May 9: Parliamentarians have suggested the government not to bring the traditional-style ritualistic budget when the economy is in crisis. During the deliberations on the principles and priorities of the Appropriation Bill 2080 at the House of Representatives meeting on Monday, the lawmakers said that a conservative budget does not make sense when the economy is in crisis.
Rastriya Swatantra Party’s MP and economist Dr Swarnim Wagle said that the principles and priorities laid down in the Appropriation Bill 2080 by Finance Minister Prakash Sharan Mahat are ritualistic. He argued that it is not appropriate to talk about economic stability when the economy is troubled and has lost its rhythm.
“The current economic growth rate is only around 2 percent, which is much lower than the target of 8 percent for the current fiscal year. With only two months left in the fiscal year, achieving this target seems highly unlikely,” said Wagle.
According to Wagle, the government has collected Rs 733 billion in revenue and spent Rs 1,116 billion as of Sunday night and it is not easy to bridge such a big gap between revenue collection and expenditure.
He added that there is a big gap between credit investment and economic growth in the financial sector at present. According to him, the loan is increasing by 20-22 percent annually and it does not seem to match the speed of the economy.
MP Wagle urged the government to re-evaluate the issues that need to be urgently done through the budget to fill the gap between import and export of goods and services and between production and consumption. According to him, the government needs to adopt a different approach to address this issue.
Dr Wagle also pointed out the need to move from quantitative development to qualitative development. According to him, education, health and drinking water are among the principles and priorities of the government, but there has not been any significant change in these areas in the last 32 years.
According to him, emphasis should now be placed on education in schools and quality services in hospitals rather than the number of roads and schools. He said that malnutrition is rife in Nepal, adding that malnutrition has afflicted one third of the entire generation.
Wagle says that it is wrong for the finance minister to say that there is no place in the financial policy and to go ahead with the monetary policy tool.
Nepali Congress MP and former Finance Minister Gyanendra Bahadur Karki suggested that the main objective of the upcoming budget should be to focus on production and employment growth.
"Due to the contraction in resources, we do not have the facility to make a budget on a whim," he said, adding, “In the current situation, it is not a populist budget but a realistic one that is necessary.”
Stating that the world economy is having some impact on Nepal's economy, Karki said that the budget should come with the determination to increase employment and develop a sustainable and strong economy.
Karki welcomed and supported Mahat's determination to achieve economic growth, increase employment and develop a sustainable and strong economy by incorporating those issues in the principles and priorities of the Appropriation Bill, 2080.
CPN (UML) MP and former finance minister Bishnu Prasad Paudel pointed out to the fact that there is a ‘slowdown’ in the economy.
“The government should present facts about the current situation and the problems faced by the economy. However, I found that the government is oblivious to the problems and challenges of the economy," said Paudel. "The government is unaware about where the problem is and what the challenges are."
According to him, the data released by the National Statistics Office shows that the Nepalese economy is in recession. Paudel said that the economic growth rate of the second quarter of the current fiscal year is negative and this confirms recession.
“This is what the statistics have said. Do we cover up or admit that the economy is in recession? We is this situation. Considering that the economy is now in recession, the budget should come with the determination to face the challenges. However, the government hasn’t accepted it," said former Finance Minister Paudel.
He said that the private sector is disappointed and the public finances are being wasted. According to Paudel, revenue collection has increased by only 50 percent in the current year compared to the target and decreased by 13 percent compared to last year, but the expenses have increased by 19 percent. Paudel said that this is the reason why there is a deficit of more than Rs 200 billion.
Rastriya Swatantra Party’s MP Ravi Lamichhane said that the country's economy is now in an extraordinary situation.
"The finance minister presented a document that is not different from the previous years, filled with 'will be done' as in previous years." This document has come as a regular ritual to be presented by changing some words and sentences.
