“Mainly the implementation of different development projects run under the foreign assistance has been badly affected due to delay in passing the budget through the parliament,” Finance Minister Surendra Pandey told a press meet on Tuesday.
The government has failed to pass the budget through the parliament because of the disruption of parliamentary proceedings by UCPN (Maoist), protesting against the President´s move to revoke the then government´s decision to sack then army chief Rookmangud Katawal.
With budget not endorsed yet, the government is presently allowed to spend only one-third of the total allocated budget. Worse is, if the impasse continued, the government will be able to collect taxes only till the end of January next year, going by the existing Tax Collection Act.
“Let alone collecting additional taxes, we will even have to return about Rs 14 billion that we have collected from customs duty and Rs 1 billion collected from excise duty,” said Pandey.
Delay in passing the budget has started to show its impact in the banking sector as well. “Banking sector has already felt acute shortage of liquidity. This will further drive up the existing interest rate,” Minister Pandey said.
Owing to liquidity crunch, inter-banking interest rate had reached as high as 10.2 percent on Sunday.
Amid uncertainty, Pandey on Tuesday met with former finance ministers Dr Ram Sharan Mahat, Bharat Mohan Adhikari and Dr Babu Ram Bhattarai to discuss its negative impact on the economy.
Pandey, however, indicated that the government would resort to other alternatives to get the budget endorsed if the deadlock in the parliament did not end by this weekend. He also informed mediapersons that the government would soon hold meeting with all the political parties, including the main opposition UCPN Maoist, and request them to fix the date for getting the budget approved.
“We will try to forge consensus among political parties to end the present crisis,” he added.
Owing to the expenditure limit that came into effect due to delay in the approval of budget, the government has already stopped distributing salary and allowance of the ministers, Constituent Assembly members and civil servants. So much so, it has hit issuance of ration allowance to prisoners as well.
PM concerned
Meanwhile, Prime Minister Madhav Kumar Nepal on Tuesday said that further delay in passing the budget would push the country into deeper economic crisis and anarchy.
“Budget must be passed without further delay to prevent the country sliding into economic and financial crisis. This political deadlock will invite economic crisis and anarchy in the country,” said Nepal at an interaction in the capital on Tuesday.
Nepal, however, expressed confidence that present deadlock would end soon, stating that the UCPN (Maoist) has assured him to cooperate in approving the budget from the parliament.
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