MONEY»
Parties at variance over full budget
KATHMANDU, SEP 01 -
CPN (UML)’s neutrality in the Prime Ministerial elections is the reason why the UCPN (Maoist) and Nepali Congress (NC) are not supporting the full budget by this incumbent government despite Finance Minister Surendra Pandey’s continuous lobbying.
The Ministry of Finance (MoF) has proposed bringing a new budget given that a new government has still not been formed and there is uncertainty when a new government will be formed. Finance Minister Pandey has also been lobbying to bring a full budget warning that delay could affect the development expenditure and distribution of salary and allowance of government employees.
Yet, he has failed to convince the ruling coalition partner NC even. “How can we support a UML Minister in bringing the budget when the UML chairman himself is blocking the election of a new Prime Minister,” asked Laxman Ghimire, NC chief whip.
UCPN (Maoist) has a similar stance on the issue. “The UML should not ask us to help bring the budget. It should not have stayed neutral in the election for Prime Minister,” said Maoist chief whip Post Bahadur Bogati.
The new government would have brought a full budget if the parties had been able to elect a Prime Minister. The caretaker government has introduced an advance budget as per Article 96 (1) of the interim constitution that allows the government to spend one-third of the expenditure made in the last fiscal year. Such a situation arose when a new government was not formed timely after the resignation of Prime Minster Madhav Kumar Nepal two weeks ago at the end of the last fiscal year.
“I have been trying to convince leaders that the incumbent government should not be prevented from bringing a full budget at a time when a new government has not been formed,” said Pandey.
According to MoF officials, Pandey has been lobbying intensively to bring a new budget. Earlier, MoF had submitted a proposal to all parties in the constituent assembly through speaker Subhas Nembang asking them to facilitate bringing the new budget. Speaker Subhas Nembang presented MOF proposals to the chief whips of the 25 parties represented in the constituent assembly.
He also organised a meeting of seven parties to discuss the issue on August 22 after MoF officials met him on Aug 19 to stress the dire consequences if a full budget is not brought within Sept 26.
UML chief whip Bhim Acharya said that there are no talks on bringing a full budget till now in the parliament among the parties. There also has been no discussion in the finance committee of the parliament on the issue.
The Finance Minister’s lobbying is however centerd on bringing a new budget if the election for Prime Minster on Sept 5 fails to elect a new executive chief. Pandey said that salary of teachers, food for inmates, medicines for government hospitals and salary of police would be affected by October. “Foreign trips and new programmes are already affected.”
MoF has proposed that the budget could be brought even without presenting policies and programmes of the government because the interim constitution is mum in this regard. However, there is no tradition of bringing a budget without policies and programmes in parliamentary democracies.
MoF officials say this way could be used to bring a full budget if political consensus is achieved. “The new government can adjust its policy by bringing a supplementary budget anytime,” said Rameshwor Khanal, secretary at the MoF.
Uncertainty over the budget has already started affecting the economy. The first sign is reduced revenue collection. The growth rate of revenue collection dwindled to 10 percent during the first two months of the the current fiscal year from 12 percent. Collection was as high as 53 percent during the first month of the last fiscal year.
According to the Department of Customs, growth rate of customs duty, excise and valued added tax have come down as the importers were hesitating the bring goods in a big scale due to possible change in the tariffs. “This tendency has slowed down economic activity.”
Contractors and other entrepreneurs are complaining to the MoF about the delay in introducing full budget.
Different development-related ministries are asking MoF if they should give contract for projects for one third budget or on a full
budget. Secretaries of various ministries have complained to the Finance Minister and officials of MoF that they could not give contract of small projects as single projects cannot be given to different contractors. “Development activities have slowed down,” said Khanal.
Posted on: 2010-09-02 08:41
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