Review Nepal News

Government Plans To Unveil Big, Distributive Budget
  Kathmandu, Nepal      May 26 2020


Review Nepal

Kathmandu, Nepal, May 26, 2020: Notwithstanding the widespread call to bring practical and implementable budget for the upcoming fiscal year 2020/2021, the government is preparing to increase about fifteen percent than the budget of the current fiscal year.

The government had reduced by 9.6 percent to Rs 1,385.96 billion through the mid-term review of the budget considering to the fact of lower rate of expenditure. The revised spending estimate is also unattainable due to the poor expenditure in the development projects due to the lockdown imposed with the aim to contain the global pandemic of coronavirus (COVID-19). 

The government has been preparing to announce overambitious budget at the time when not only the opposition parties but also the economists and development experts have repeatedly been suggesting the government not to bring overambitious and hypothetical budget. 

Finance Minister Yuba Raj Khatiwada has been drafting the budget statement, which is scheduled to present on June 28 even continuing the past program. 

The main opposition, Nepali Congress (NC) has suggested the government to bring budget of Rs 1,350 billion to Rs 1,400 billion stating that this size of budget would be realistic for the upcoming fiscal year 2020/021.

A special committee formed by the NC has made the suggestion on the basis of its own finding that federal revenue after sharing with lower units of the government could be Rs 850 billion to Rs 900 billion. 

The NC had formed the 14 member special committee under the leadership of former finance minister Dr. Ram Sharan Mahat to study and analyze the economic impact of COVID-19 and submit a report to shape the view and stance of the party on the economy and the upcoming budget on May 6.

The committee has also suggested the government to reduce the government’s expenditure by implementing the Public Expenditure Review Commission (PERC)’s recommendations. The PERC had suggested the government not only to reduce the public expenditure but to scrap six ministries, 35 departments and nearly 45,000 government staffers. However, incumbent government had increased the number of ministries just to accommodate the leaders going against of the recommendation. 
The Nepali Congress has also suggested the government either readjust or suspend the most controversial Constituency Development Fund (CDF), which is now launched on the name of Local Infrastructure Development Partnership Program (LIDPP).  

Not only the NC but also the development experts have repeatedly been suggesting the government to suspend the CDF referring many instances of misuse of the funds. The Supreme Court (SC) the apex court of the country had already suggested the government to suspend the fund. 

The government has been allocating Rs 9.9 billion under this program to provide Rs 60 million for each constituency whereby each lawmaker receives direct funding for the development of their constituency. 

The program has been criticized by various sectors not only due to its distributive nature but also due to rampant misuse due to the lack of proper monitoring.  It is stated that the government is going to continue the CDF even in the upcoming fiscal year.