Waiting for budget

Published On: May 28, 2018 02:00 AM NPT By: Republica  | @RepublicaNepal


First big test of Oli government 

Prime Minister KP Sharma Oli’s government is all set to unveil its first budget in the federal parliament on Tuesday. The whole country is eagerly waiting to hear the specifics of the budget as the government has twin challenges of fulfilling election promises and the urgent need to balance the budget. The Left Alliance had promised huge social protection increment during the election campaign and had secured landslide victory by promising prosperity to the country within the next five years. This is why there is humongous expectation from the upcoming budget. And then there is urgent need to invest in big infrastructure projects—from highways to railways to airports. The budget needs to lay a solid foundation for economic transformation which means a huge resource has to be put in to expedite some of our big infrastructure projects. Proposed Nijgadh International Airport in Bara, regional airports in Pokhara and Bhairahawa, railways from China and India are some of the projects which will help us see a bigger picture of our economic transformation. Our social security payments and the pension fund are ballooning. With the sluggish growth rate, this payment will put a huge burden on our national treasury. This also needs a sustainable fix. 

Finance Minister Yubraj Khatiwada has hinted at sweeping reforms in revenue collection, lending to productive sector, efficient project management and massive investment in infrastructure development among others. If done with the right intention these reforms could mean a lot to our ailing economy. We will have to start thinking away from relying on remittance money sent by Nepalis working in horrible conditions in the Middle East and elsewhere. Even by a rough estimate, Nepal will have to generate over half a million jobs per annum by 2023 to retain our youths within the country. As is the case, our unemployment rate remains staggeringly high. This means the government has to invest big time in encouraging multinational companies to come and work here in Nepal. Provincial governments have also announced schemes to attract big companies to their land with the hope of creating jobs. The budget should encourage and support such programs. 

As the first budget from the government elected under the new constitution, it has to indicate the working relations among local, provincial and federal set up through which we have chosen to govern ourselves. All three tiers of government have to work closely to achieve our national aspiration of rapid economic growth while working to lessen widening economic inequality.  Past governments unveiled a lot of populist programs in the budget without assessing their viability. As a result many of those programs remain unimplemented. The Oli government has a clear choice: either opt for a populist budge to placate its voter base or make tough choice and go for a budget based on sound economic decisions and the long-term health and growth of our economy. We hope the government will go for the latter option. 


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