May 29, 2019 06:00 AM NPT
'Budget will be conventional'
KATHMANDU, May 29: Minister for Finance, Yuba Raj Khatiwada, is presenting the budget of over Rs 1.58 trillion for the upcoming fiscal year 2019/20 on Wednesday. The budget is of a 'distributive nature' that includes a raise in the social security allowance, increment in salary of government staff, allocation of funds to parliamentarians for development work and subsidies for various programs. This will be the second federal budget to be presented by the current government, which commands a two-thirds majority.
The budget speech is unlikely to introduce any new notable development project and will give continuity to the allocation of financial resources to most of the ongoing programs.
“The upcoming budget will be conventional one giving continuity to the ongoing development projects and programs,” said a senior official at the Ministry of Finance that is giving the final touches to the budget speech of the Finance Minister Khatiwada. “The expenditures have been planned in a way to complete the ongoing projects on time. So, do not expect any surprises in the budget,” said the senior official, who spoke on condition of anonymity. The senior official also said that the government has also aligned the budget with the priorities of the 15th five-year plan recently approved by the National Planning Commission (NPC).
Meanwhile, the NPC also decided to raise the ceiling of the total budget from Rs 1,493 billion to Rs 1,577 billion on the eve of the budget announcement, indicating that the Finance Minister Khatiwada is under immense pressure to dole out funds for populist programs. The growing demands for resources including for distributive programs as announced in the election manifesto of the ruling party Nepal Communist Party (NCP) is causing the size of the budget to bloat further. The government is increasing the budget size by over Rs 250 billion in the next fiscal year even when it has been struggling with a chronic problem of underspending.
Though the government had brought the budget of Rs 1,315 billion in the current fiscal year 2018/19, it has spent only 56.83 percent when the end of the fiscal year is only a month and a half away. The capital spending situation is even worse. Out of the Rs 313.99 billion allocated for capital expenditure, the government has been able to spend only 43.56 percent until May 27.
The government is preparing to collect Rs 1 trillion in taxes to finance its expenditures while remaining funds will be generated from domestic debt, foreign aid and foreign loans.