The first full-fledged federal budget tabled in the parliament on Tuesday took a break from the past budgets in several ways. First, it has a fresh approach to address some of the chronic issues of the economy, mainly unemployment. Second, it is realistic in terms of what the government can deliver in a year. However, the budget shies away from bold and innovative approach to excite foreign investments and in expanding tax base here at home. The technocrat finance minister Yuba Raj Khatiwada has put job creation, entrepreneurship development and boosting industrial production in the country as the top priority of the government. Progressive tax policy and allocation of a third of federal budget for the provinces and local levels are good moves.
Unlike past budgets, it has not expanded income and expenditure. It has also carried forward some of the past projects. The budget reflects finance minister Khatiwada’s technocratic eye to resist from announcing big populist programs. The target of achieving 33 percent growth in revenue collection and meeting eight percent economic growth are both highly ambitious. These ambitions are not backed by specific policies to undo some of the bottlenecks in our governance system. We talk a lot about attracting foreign direct investments, but even simplifying processes for foreign companies to enter Nepali market has been in the talks for ages now. We need some concrete action on this front at the earliest.
The budget has allocated 40 million rupees for each constituency despite huge public sentiment to not take that route. Past experience on this has not been good as the money was misused by a lot of lawmakers. We now have a framework to shape up our economy for the next one year. It will be upon the government to ensure strict implementation of what was announced on Tuesday in the parliament. We can only hope that the government will overcome the curse of not being able to spend development budgets as we now have all tiers of government in place, as envisioned by the constitution. With a two-thirds majority in the parliament, PM Oli’s government has no excuse to not do what his government promised the people in the budget.