Business»
Advance budget a way out of impasse
KATHMANDU, JUN 30 -
The resignation of Prime Minister Madhav Kumar Nepal may have averted a political crisis but it has increased uncertainty about the budget for the next fiscal year. The prime minister’s resignation just ahead of the budget session has raised questions over the timely presentation of the new budget. Development
expenditure, private sector investment, price and trade expansion — all will be affected by the impasse over the new budget.
The most important question is whether a caretaker government can present the new budget in the legislative parliament and if not, what are the options available to avert the fiscal crisis. Former Finance Minister Bharat Mohan Adhikari says a caretaker government can’t come up with the budget.
If a new government is not formed within two to three days, the chances of a full-fledged budget look slim. “”If a new government is formed within two to three days, then full-fledged budget can be brought,” said Prakash Chandra Lohani, another former finance minister.
However, the formation of a new government within two to three days looks a distant possibility as the parties are yet to agree on the nature of the next government.
With the government already announcing the budget session of parliament from July 5, the budget can’t be brought through ordinance. “The budget can’t be introduced through ordinance without closing this session of the parliament,” said Tek Prasad Dhungana, legal advisor at the Constituent Assembly Secretariat.
As per the Interim Constitution, the impasse over the budget can be resolved by presenting an advance budget through special bill. The Article 96 A (2) of Interim Constitution says the finance minister can introduce a Bill regarding authority to spend in the next fiscal year an amount not exceeding one-third of the total expenditure of the current fiscal year by explaining to the legislative parliament the reason for doing so.
This is the third time in a row when the budget process has been marred by political chaos. Two years ago, the then government presented an advance budget when there was political deadlock over a new government after the CA election. In 2008, then Finance Minister Ram Sharan Mahat had presented an advance budget of Rs 73.54 billion.
After the formation of the Maoist-led government, then Finance Minister Baburam Bhattarai presented a full-fledged budget on Sept. 19, 2008.
According to Dhungana, the present government can bring the advance budget and the new government later on, can present the full-fledged budget. Last year, the main opposition UCPN (Maoist) didn’t allow endorsement of the budget through parliament for four months.
Economist Biswombhar Pyakurel said that the prime minister’s resignation just ahead of the new budget has grave implications for the economy. “The prime minister’s resignation with only 14 days left for the fiscal year to end may create crisis in the economy,” said Pyakurel.
“Timely presentation of the budget is crucial for the private sector and investors who plan their programme accordingly.”
The Ministry of Finance (MoF) has nearly completed preparing the new budget. According to Keshav Acharya, senior economic advisor to the MoF, the Economic Survey has already been sent to the press for printing.
Posted on: 2010-07-01 07:49
Headlines
Advertisements
