The budget for this fiscal year has to be unveiled on May 29. But the government of K P Sharma Oli now is mired in multiple controversies generated by the PM’s utter disregard for the constitutional and political norms and values. From May 21, it has become a caretaker government after the deliberate dissolution of the House of Representatives by Oli and President Bidhya Devi Bhandari. All this is one among many other indications that the government is irresponsible and ill-prepared about the budget. They are also ignorant to expert opinions. They think that they know everything about everything. The government should already have started the discussion on the strategy to tackle the pandemic through this budget. It is already too late for that.
There is a lot to learn from other countries how they have used the institutions and mechanisms to minimize the damage of the pandemic. This has not happened.
The government has never paid attention to the need of bringing out a rescue plan. Two out of five Nepalis are jobless right now. What’s the plan to address their issues? The state can provide a cash incentive to the ultra-poor in coordination with the local governments. What’s the plan about that? We can also provide interest-free soft loans to needy people through the local governments on the condition that they pay it back in five years. It is equally important to address the people of the informal sector, which is hard hit by the pandemic. Small and medium enterprises in agriculture should be given subsidies. The laborers in industries and construction sectors should also be helped by providing them early vaccination so they can continuously engage in the production sector. Subsidies should be provided to small and medium businesses as well. Budget should focus on completing the old projects instead of initiating the new ones. For example, if you complete transmission lines, the hydropower project will benefit. There are many hydropower projects that have been running whose per unit running cost has gone up. The completion of one project will have a domino effect on other projects as well. The government should also reduce unnecessary expenses to address the basic needs of people in the pandemic—provide treatment, prevent hunger, and create jobs.
The government should focus intensively on containing the effects of the Covid-19 outbreak right now. Bringing a short-term budget of a few months would be ideal for that.
While this is what the government should be doing there is a doubt that it will. For there is no preparation, no focus. For example, the government seems to have deliberately skipped the pre-budget discussion, which is flagrantly unconstitutional and against the political culture. The government has been taking one after another unconstitutional move in recent times. It is immoral and irresponsible, a far cry from good governance. In this situation, one cannot expect much but the government should have held discussions on budget policy. It should have at least consulted the opposition.
As the country is suffering from the Covid-19 pandemic, the government should urge the local governments to not spend on unnecessary projects and infrastructure. Distributing that money to the vulnerable groups as a soft loan would be more stimulating to the market. For example, it can provide Rs 5000 per month per person which they can pay back in five years without interest. The local government can use that money for infrastructure later. Also, the money will act as a stimulus in the market because it will spur spending.
But all the government seems to care about is populist programs. For three years, this government has only been bringing populist programs which are non-productive and very hard to implement. It has also been allocating a huge chunk of the budget in social security, which will inflict damage on our economy in the long run. Raising social security will be a burden to future governments because no one can repeal such a program. It hasn’t focused on restructuring institutions and reformulating foreign policies. Thus, no innovation can be expected of them. The government has been focusing on distribution instead of production. Youths of the country are frustrated with the government because they lack jobs. The government should bring plans to provide free training, paid-internships with stipends, and subsidized loans for young people to start businesses. This will generate hope in them.
As the country is suffering from the Covid-19 pandemic, the government should urge the local governments to not spend on unnecessary projects and infrastructure.
The budget is going to be brought through the ordinance this time, which would not have been the case if PM Oli had not dismantled parliament. There is no explicit provision in the law that prohibits the government to bring certain programs into the budget when it is brought through an ordinance. However, according to past democratic trends, the government shouldn’t bring any new projects and policies in this scenario and should continue its ongoing projects. The government should focus intensively on containing the effects of the Covid-19 outbreak right now. Bringing a short-term budget of a few months would be ideal for that. The priority of the government right now should be to reduce Covid-related deaths, eliminate hunger and poverty due to joblessness.
Govind Raj Pokharel is the former Vice Chairman of the National Planning Commission. (Based on a conversation with Nepal Live Today.)