Budget passage

The continued disruption of parliament has blocked passage of the budget for the fiscal year 2009/10. It has been almost six months since the budget was tabled in parliament but discussions on it stopped mid-way as the Unified Communist Party of Nepal-Maoist (UCPN-M) started blocking house proceedings. Their demand is that a resolution motion against President Dr Ram Baran Yadav´s move to reinstate the then army chief be discussed in the house first. This is unprecedented in Nepal´s parliamentary history. The non-passage of the budget has now begun to show its impact.



First, the prime minister and other ministers have not been able to draw their salaries since last month and from next month civil servants, lawmakers and the PLA combatants in their cantonments will also not be getting their salaries and allowances. All jails in the country have stopped issuing daily allowances to the inmates and some of them are also struggling to manage the rations. Second, it has already begun to affect essential services such as health and education. One tragic example is the substantial reduction of government grants for essential drugs meant for children. Thirdly, our development expenditure has been historically low, but this year it´s only likely to get worse. The government has spent awfully little in the development sector in the second quarter of this fiscal year. Fourthly, since the government has been raising, on average, 12 billion rupees in revenue every month but hasn´t been spending much of this the liquidity crunch in the market is becoming further aggravated. The inter-bank borrowing rate, one measure of market liquidity, has already crossed 10 percent, one of the highest in recent months.



If the budget is not passed by the end of this month, the government cannot even raise revenue. Clearly, we are entering a crunch time and cannot afford to delay the budget any longer, for that will invite chaos and economic paralysis. The UCPN-M, as the party disrupting parliament, should take the onus of breaking the deadlock. They may not reach any agreement with the other parties on the issue of "civilian supremacy" and that´s okay for now. But the budget cannot wait and they have to find a way out. The government for its part should initiate a final round of dialogue with the Maoists to get the budget through and if the Maoists still refuse to budge, it must seek out some alternative. Once an opposition party is allowed to disrupt parliament, blocking passage of the national budget for an indefinite period, a majority government can always find itself at the mercy of the parliamentary minority. This is a dangerous precedent.

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