Budget 2019-20 not hanging in balance

Date: 31 May 2019
Location: Pavilion Hall
Address: Kathmandu

KATHMANDU: Though a technocrat, Finance Minister Yuba Raj Khatiwada was indeed swayed by political considerations sidelining the issues of development in the present budget for the fiscal year 2019/20, say eminent economists of Nepal.

Economists are critical of ‘fiscal atrocity’ launched by the present government motivated by its narrow political considerations. They are of the opinion that a strong government of a two-thirds majority in the House of Representatives is progressively tightening the noose on the country’s finance and its future prospect of economic development.

The second finance budget of this government is far lopsided and fiscally tight than that of the first budget presented last year, they said at a program jointly organized by the Pavilion Media and Institute for Strategic Socio-Economic Research (ISSR) at the Pavilion Hall, Durbar Marg in Kathmandu on Friday.

While speaking in a ‘Budget Review Program’, Nepali Congress leader and former Finance Minister Dr. Ram Saran Mahat accused the incumbent government of presenting the budget matching with its own ‘political traits’.

The government, he argued, is master of propaganda and never shy away from using political rhetoric like launching Nepali ships and transporting fuel through pipelines among others.

But, the fact of the matter is that the government will never be able to do it, doubts Mahat because the present government machinery is busy in false publicity and spread ‘illusion’ among the people of Nepal.

The government, as Dr. Mahat continued, is naming and renaming different programs and policies after its political ideologues and leaders. “It amuses me when I hear Prime Minister is inaugurating this program and the President is laying the foundation to that program,” argues Mahat.

“Why should a government of a day be so obsessed with publicity?” he queried adding that the ‘publicity syndrome’ is spreading like an epidemic going down to provincial and local level governments at municipality and ward level.

“All should desist from this tendency of installing their names affixed on development programs and projects meant for the development of the country,” cautions Dr. Mahat.

Meanwhile, former vice-chairman of Nepal Planning Commission (NPC) Swarnim Wagle said, “The budget is more a document of appeasement and less of a policy guide of development for a country in the ensuing year.”

He said that Finance Minister Khatiwada was very aggressive at the beginning of his tenure showing commitment towards implementing and completing the development projects in several sectors and launching new ones across the length and breadth of the country but now he has become the handy tool of his political masters driven by hardcore political interests weighing over the national interest.

Wagle added that Minister Khatiwada understands well that leaking of state treasury by provisioning constituency development fund and unnecessary expenditures in unproductive sectors amounts to the looting of people’s money.

He further stated that Minister Khatiwada seems to have succumbed to political pressure and emerged as more politician and less economist armed with technical finance skills.

The accusation of the budget of being distributive in nature is not out of place because government coffers have been left open for political workers and all kinds of populist programs in name of social security, unemployment, and constituency development, he maintained adding it has opened the space of corruption which the Finance Minister Khatiwada wanted to stop but now he has “seeped slowly into the same Nepali culture of corruption” after a good one year.

Speaking at the program, Bishnu Rimal, member of Finance Committee, said that the inability of the government in spending all the proposed outlay in the annual budget on different heads is the only ‘vice’ that one must condemn

“The government must act smart and ensure its execution without fail by periodically reviewing the total spending on various programs at least quarterly or half-yearly if not regularly,” he said.

Former Finance Minister Surendra Pandey defended the budget and declared it ‘pro-development progressive budget’ providing umbrella of social security thereby shielding not less than 2.2 million people and 9 hundred thousand government employees.

“The present budget proposes only 20-30 percent debt financing while budget of developed countries go to the extent of having 60-70 percent debt,” he said.


Pandey said there is no anomaly between the provisions of the present budget and existing laws of the land. “However, laws framed with the instigation of bureaucrats create a strange situation in the country and Government is also stuck in it,” he added citing example that several of the foreign investors look for investing in hydro-power projects but “our laws prohibit them from doing so without planting ‘samplings’ to save the environment”.

“Now, a strange situation poses before them: think about business of investment or go for tree plantation first,” Pandey said.

Govind Nepal, the former member of the National Planning Commission (NPC), has a different take on the government and the budget. “Academics and experts need to be restrained before reeling out negative remarks against the budget.”