E-Kantipur

KATHMANDU, MAR 11 -

Bowing to strong pressure from key coalition partner UCPN (Maoist), the government has indicated that a supplementary budget is on the horizon.

Both Prime Minister Jhala Nath Khanal and Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari on Thursday said the government is going to bring a supplementary budget. “The supplementary budget is expected to address the burning economic problems of the country,” said Khanal at the inauguration ceremony of newly opened Century Commercial Bank.

Finance Minister Adhikari also expressed a similar view. “The supplementary budget will address problems such as energy crisis and liquidity crunch in the banking system, among others,” said Adhikari.

Minister Adhikari has made a U-turn from his earlier statement when he had said that bringing a supplementary budget was not practical with only five months remaining in the current fiscal year. The finance minister had made such remarks at the mid-term review of the current budget on March 1.

“There is a strong pressure from the Maoists to bring a supplementary budget,” said a member of the task force formed by the Maoists and UML for doing homework for bringing a supplementary budget. The task force was formed after the formation of the new government.

However, UML leaders are not in favour of a supplementary budget. “Given the coalition obligation, a supplementary budget will be introduced,” said a UML nominee in the task force.

Nominees in the task force from the UPCN (Maoist) side say that a supplementary budget is necessary in the changed political scenario. “Bringing a supplementary budget is a political necessity of the country,” said Dipendra Bahadur Kshetry, former governor of the Nepal Rastra Bank and a Maoist nominee in the task force. Economist Dilli Raj Khanal, another Maoist nominee in the task force, said a supplementary budget is necessary to stimulate the economy suffering from liquidity crunch in the banking system, low government expenditure and power crisis. “As both parties—UCPN (Maoist) and CPN (UML)—have already agreed in principle for bringing the supplementary budget while forming the government, it is natural that a supplementary budget is being brought,” said Khanal.

According to Khanal, talks are going on positively for bringing the supplementary budget which will introduce some people-oriented programmes without disturbing the old ones.

The reason why the Maoists are pressing for the supplementary budget is their reluctance to take the ownership of the current budget. The current budget was introduced on Nov. 20, 2010 through an ordinance after the Maoists obstructed then Finance Minister Surendra Pandey to present the budget in the Parliament. However, they allowed the Parliament to endorse the Finance Ordinance and Replacement Bills.

Efforts for bringing a supplementary budget is being expedited at a time when ministries are outlining their programmes for the next fiscal year’s budget as per the request of the finance ministry. However, finance ministry officials say that the task force has not given them any clear direction for a supplementary budget.

With the government being able to spend only Rs 9 billion as capital expenditure in the first half this fiscal, there are doubts whether new programmes to be introduced by the supplementary budget will be implemented. The four-month delay in the budget presentation has already hit the development spending, with National Planning Commission (NPC) still approving programmes of various ministries.

With only five months remaining in the current fiscal year, implementation of the supplementary budget, if brought, will be a herculean task. Economist Biswombher Pyakurel says there is no time for the implementation of a supplementary budget. “It will further mess up things,” said Pyakurel. “It will be better if the unspent budget is transferred to projects desired by the Maoists.”

However, pro-Maoist economists say that the supplementary budget can be brought within a week. “We can prepare the budget within a week,” said Keshetry. Economist Khanal, however, accepted that bringing a supplementary budget in such a short time will be challenging and it should be approved quickly.

Preparations for a supplementary budget at a time when the finance ministry is actually doing homework for the next year’s budget will push the next year’s budget further behind. “We will struggle to present the next year’s budget by mid-May,” said Keshav Acharya, chief economic advisor at the Finance Ministry.

For the last three years, delay in the budget presentation and endorsement has taken a toll on development expenditure. That

is why finance ministry officials are pressing for bringing the next fiscal year’s budget by May. “The plan will suffer a setback if efforts are concentrated on the supplementary budget,” said a senior finance ministry official.

Posted on: 2011-03-11 09:01

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