New budget in flux with political crisis

Subhash Dahal

  • Read Time 3 min.

The upcoming federal budget is reeling under uncertainties after the dissolution of Parliament. This event unfolded just before a week when the executive was obliged to present the upcoming budget in Parliament on May 29. This comes at a very critical time of health crisis with Covid-19 cases wreaking havoc throughout the nation.

The budget formulation is a continuous process and it has to go through a rigorous timeline before tabling the budget in the Parliament. A budget is presented following the preparation and publication of the pre-budget statement and discussion and inputs from civil society and other stakeholders including experts, business communities. The budget process has been adversely hit this year following the first dissolution of Parliament.

The first issue came to the fore when President Bidya Devi Bhandari dissolved the HoR on December 20. The budget-making process saw a big blow when the Parliament was dissolved and the government turned to be a caretaker. There was a reawakening of optimism for a normal course of action when the apex court of Nepal reinstated the Parliament.

The current political crisis has put the budget in flux as to when and in what form will the budget come within the constitution-stipulated date for the budget presentation.

A pre-budget statement of standard norm is a must for a standard budget. Publication of pre-budget statement and discussion is an essential framework of any democracy as well as budget-making process. The government should publish pre-budget statement latest by the end of the year of Nepali Calendar as per the House of Representatives Operation Rules, 2018 and the Economic Procedures and Fiscal Responsibility Act 2019 so that there can be an ample time for discussion with different stakeholders. With no such pre-budget statement in place, the government only provided email and web portal to seek inputs and suggestions on budget from the public. There has been the tendency of holding various meeting in the name of pre-budget discussion with selected groups and individuals. The Finance Ministry held budget discussion with various ministries, previous finance ministers, some selected experts and representatives from Nepal Chamber of Commerce among others. It’s not clear whether these discussions were merely ritual or there were systematic consultations based on the pre-budget statement. Along with this, there is no information disclosed on the inputs and suggestions provided by the stakeholders in the meetings and how these deliberations will be taken into the consideration for upcoming budget. It is important to be disclosed as what inputs were received and how they will enrich the formulation of the upcoming year’s budget.

The uncertainty arises again after President yet again dissolved the Parliament, a week before the date set by the Constitution to table the fiscal budget. Against the backdrop, it is quite uncertain and opaque as to how and when the new budget will come in what form. Being the caretaker government, it is unlikely to present the full-fledged budget as the mid-term election dates have also been announced. Likewise, it is most likely that the budget will be unveiled through the ordinance.

While people are in confusion on the new budget, ex-finance ministers, outgoing lawmakers and experts are on the view that the caretaker government cannot bring a full-fledged budget. Experts are of the view that the current government should bring budget through ordinance with the presentation of only regular recurring expenditure and not with a new policy and other new programs by the end of the fiscal year. It’s a huge blow for the country and the people as all are eager to know how the federal government budget will address the Covid pandemic through fiscal measures and allocations.

Amid the pandemic when Covid-19 the second wave is raging and our health infrastructures are not sufficient to respond to the needs, the upcoming budget is much awaited to be a strong measure to fight against the pandemic. The current political crisis has put the budget in flux as to when and in what form will the budget come within the constitution-stipulated date for the budget presentation.