SANGAM

No chill pill, for sure 

"Govt presents Rs 110.21 b special budget"

KATHMANDU, JUL 12 -
For the second time in three years, there is a special budget, thanks to political wrangling. The government has managed a way out for regular government expenditure but development and expansion of economy will be hit.

Even Finance Minister Surendra Pandey regretted that the budget was a victim of political tussles.

“It is not a happy  situation,” said Pandey on Monday. He presented a special budget of Rs 110.21 billion, tabling the ‘Bill Empowering Government to Withdraw Money from Consolidated Fund’ to carry out regular services in the coming fiscal year.

The bill will give the government authority to incur expenditure up to one-third of the total revised expenditure of the current fiscal year from the consolidated fund until the Appropriation Bill, 2010 is tabled in the Legislature-Parliament.

Of the Rs 110.21 billion, the government proposes Rs 31.40 billion for chargeable expenditure (that does not need parliamentary approval) for the whole fiscal year 2010-11 and Rs 78.81 billion for expenditure appropriated from the consolidated fund which will amount to one-third of the actual expenditure of the current fiscal year.



Economists and business leaders say the special budget will affect investment and employment opportunities in the new fiscal year. With GDP growth declining and major economic indicators including balance of payment bleak, the special budget was not the right prescription. “This is not a budget,” said Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry. “It will reverse economic development.”

Pandey acknowledged, “The economy will suffer if the formation of a government is delayed,” said Pandey.

“A full fledged budget is a must.” Delay in full-fledged budget will have multiple impact on the economy. It will not only hit the growth of revenue collection but also delay investment and expansion plans of the private sector. As no changes can be made in tax structure, revenue collection will be hit.

Also hit will be new employment opportunities that the annual budget would provide through new programmes. “From government expenditure to foreign grants, loans and funds for multi-year contracts, all will be affected,” said Minister Pandey.