“The existing one-third budget has already hurt execution of development projects, and in the absence of counterpart fund, we have faced difficulty in mobilizing foreign assistance as well. Hence, the government must announce full budget if it is to revitalize the economy,” said Subedi, addressing economic journalists on Tuesday.[break]
At a time when political parties are still apart over announcing the full budget without settling the long due political issues, Subedi said the government would soon running out of cash to fulfill its regular obligations.
Ministry of Finance (MoF) already made public that it is eyeing a fund deficit of Rs 7.42 billion to fulfill its regular duties like payment of salaries, providing free medicines and other health care, distribution of social security allowances, scholarships to underprivileged children in the fourth month of the current fiscal year, ending mid-November.
If the fresh budget did not replace the existing one-third budget within the next 10 days, it has cautioned delivery of basic health care and other facilities will be badly affected.
And instead of making ad hoc arrangement, MoF has been strongly pushing for full-fledged budget, arguing that in its absence the government will not be able to tender out the development projects and win confidence of the donors, to which Nepal relies heavily for financing the development works.
“Lack of full budget will raise doubt over whether the project will be continued. In such confusion, agencies executing development projects will face difficulty to tender out the development works,” said Subedi.
Likewise, lack of full budget has also left donors in confusion over whether the government will continue the programs or will it have counterpart fund to sign the assistance package and implement them, he added.
Owing to such situations, Subedi said the government has failed to mobilize foreign aid to a tune it anticipated to receive during the first four months.
Moreover, as the government is the biggest consumer itself, Subedi said its constrained spending and feeble jobs creation has caused demand to slide in the market, affecting private sector productions.
“That is not all. Lack of full budget has left private sector uncertain over making investment decisions as they are not sure what will be the new tax policy and structure and how the overall investment environment will be,” said Subedi, building his case for the full budget.
However, parties in opposition have held firm that they will not agree on full budget unless consensus is reached on political issues, consolidation of achievements made so far on new constitution and formation of new government to hold fresh elections of the Constituent Assembly.
If the government is facing financial crisis to fulfill its regular obligations, they have suggested it to enact appropriation bill through ordinance.
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