KATHMANDU: Finally, with the finance minister of caretaker government Surendra Pandey presenting a Rs 337.9 billion budget for the current fiscal year through ordinance on November 20, shadow of uncertainty that loomed large over the Nepali economy has ended.
The feel-good budget that focused on eduction, health and social service apart from export promotion, infrastructure, and agriculture has targtted a growth of 4.5 per cent and inflation at seven per cent for the fiscal year 2010-11.
However, experts doubt the caretaker government's ability to contain nflation under the target and acheive growth rate. "The expansionary budget could not contain the inflation under seven per cent," said senior economist Prof Dr Bishwambher Pyakuryal. "As our informal economy is as big as formal economy, the government will find it difficult," he said, adding that as the inflation will go up, people will feel the heat.
He also questioned government's capacity of spending on development activities as this government is caretaker and budget has also been delayed by four months.
"The dealyed budget would find it difficult to achieve growth target as there is no supporting fiscal measures," Nepal Bankers Association president Sashin Joshi said.
However, the incentivising the exports and investment on infrastructure specially road and power is acknowledged.
Learning the lesson from last fiscal year's huge Balance of Payment (BoP) deficit, the budget has tried to boost the confidence of private sector and targetted to substitute imports providing concessional loans to the livestock raising farmers and cash crops like cardamom, ginger, tea, coffee and honey.
Industrialists also find it encouraging that the budget has provided tax rebate to export that could boost domestic industries. "The government has for the first time recognised the importance of real sector," said industrialists Rajendra Khetan. But another industrialist Binod Chaudhary opined that the budget is reluctant to give facilities of Industrial Policy, however he hailed the government for providing security to industry.
Though, its largely a continuity of the last fiscal year's budget, it has also aimed at huge infrastructure projects like 10 new modern cities; construction of six lane wide roads linking international trade routes like Birgunj-Pathlaiya, Belahiya-Butwal, Rani-Itahari and Surya Binayak-Dhulikhel; some half a dozen hydropower projects, the implementation of budget has been under scanner.
"The cooperation from the sectoral ministries and implementation of budget has doubt due to less time with the government and traditional approach," said former finance minister Bharat Mohan Adhikari.
The budget trying to be gender friendly and region-friendly has spread itself thin forgetting the government's reality and delay.
Former finance minister finds budget a little beyond the understanding reached among them. "He must have compulsion to introduce some new policy, though we had an understanding of not including any new ones," he said.
The political dead lock after the Prime Minister Madhav Kumar Nepal has delayed the full-fledged budget presentation forcing Pandey to bring Rs 110.21 billion special budget under special provision for the regular expenses.
"As the full fledged budget for current fiscal year could not be presented before the Legislature- Parliament due to special circumstances," Pandey said, claiming that the ordinances and budget are in line with the consensus reached earlier among political parties.
Since the attempt of the caretaker government to present the budget in the Legislature- Parliament yesterday was foiled by the UCPN-Maoists, the government prorogued the house and decided to bring the budget through the ordinance.
GDP forecast 4.5 per cent
Inflation projection at seven per cent
Total budget outlay -- Rs 337.90 billion
Recurrent expenditure -- Rs 190.32 billion
Capital expenditure -- Rs 129.54 billion
Principal Repayment -- Rs 18.42 billion
Revenue target -- Rs 216.64 billion
Foreign grants -- Rs 65. 34 billion
Foreing loan – Rs 22.23 billion
Domestic borrowings – Rs 33.68 billion