Experts weigh in on the Budget for the fiscal year 2017/18
May 30, 2017 08:10 AM NPT
KATHMANDU, May 30: Finance Minister Krishna Bahadur Mahara unveiled the annual budget for the fiscal year 2017/18 amounting to Rs 1278.99 billion on Monday. Experts in economic field have reacted to the budget from various viewpoints. Their comments are as follows:
Difficult to contain inflation at 7 percent
Ram Prasad Gyanwaly Chief, Central Department of Economics, TU
The government has brought a 1.28 trillion rupees budget for the coming fiscal year which is half of the country’s GDP. It will be difficult to meet the growth target of 7.2 percent in the upcoming fiscal year. With the country transitioning into federal state, it remains to be seen how the funds will be transferred into local units and how it will be implemented. The government has also set a target of containing inflation below 7 percent. But the two elections -- provincial and federal elections -- and the size of the budget might increase inflation up to 9 percent. As our local units do not have the experience of spending budget, it remains to be seen whether it they can spend the allocated budget wisely. The government should make proper plans for implementing the budget properly. It will be very difficult to implement the budget like in the past years.
Budget for infrastructure development positive
Purushottam Ojha Former Commerce Secretary
It is positive to note that the government has allocated huge chunk of money for infrastructure development. The budget for the coming fiscal year is very similar to the budget of the current fiscal year. Budget size, however, has increased by 21 percent. The budget of the country has encouraged different sectors of the country, but the government failed to implement it properly. Our capital expenditure has always remained disappointingly low. With the formation of local units, there was no need to allocate budget for the Constituency Development Fund. The allocation of huge chunk of money for infrastructure development is the only positive thing about the budget. We lack a monitoring mechanism to see whether the budget has been implemented properly.
Local units have a big role to play
Pashupati Murarka Former president, FNCCI
The new budget doesn’t have any new program. It might be because of the election code of conduct. But the budget size has increased. I doubt whether the government will be successful in implementing the budget. Local units have a big role to play for successful implementation of the budget. The local units should utilize the budget that the government has allocated on infrastructure projects. They have the full authority to select the project and execute them. If local units perform their responsibility effectively, the private sector will be automatically benefitted. There is nothing for the private sector to cheer about in the budget. But the government has tried to address most of the suggestions given by the private sector. The private sector is hopeful that the government will bring programs to encourage private sector in the supplementary budget.
Budget for local units insufficient
Bharat Mohan Adhikari Former Finance Minister
The government has not brought any program to decrease trade deficit that is widening with every passing year. It should have brought programs to encourage small and cottage industries. Similarly, the government should have brought programs to encourage youths of rural areas for optimum utilization of available resources. Though the government has allocated budget for poverty alleviation, it has not mentioned how the money will be spent. Similarly, the budget is silent on how the money received from our development partners will be spent. Huge chunk of budget has been allocated for infrastructure development. But there is no authority in the country to monitor whether the budget has been properly utilized. The government has allocated Rs 100 million for infrastructure development in rural municipalities. I think it is insufficient. It should have allocated a minimum of Rs 150 million for the purpose.
Budget implementation will help BFIs to flourish
Anil Keshari Shah President, Nepal Bankers Association
I am happy that the budget has been unveiled despite several adversaries. Implementing the budget is going to be a big task for the government. Because of the election code of conduct, the government has not brought any new program. It has simply given continuity to programs and priorities of the existing budget. Despite bringing new plans and programs, the government has failed to implement many of them in the past fiscal years. I am hopeful that the implementation of the new budget will help the bank and financial institutions (BFIs) to grow further. If the government achieves the economic growth target of 7.2 percent in the new fiscal year, the BFIs will grow automatically. The allocation of budget for local units will also address problems seen at the local level. The government has allocated huge chunk of budget for infrastructure development which is very positive.
Difficult to achieve
7.2 percent growth target
Chandra Mani Adhikari Former member, National Planning Commission
As the budget does not have new plans and programs, the upcoming days are going to be very tough. It will be very difficult to achieve the growth target of 7.2 percent set by the government. The growth, however, can be achieved if the local units worked seriously to spend the budget that they have received for infrastructure development. The budget lacks specific programs to attract private sector investment. The government has allocated low budget for local units in geographically difficult areas. Little budget won’t mean anything there. As the government has allocated huge budget for local units in urban areas, it might trigger migration of youths from villages toward cities for education or employment. The government should have considered both the population and geographical structure of local units while allocating budget for them.