Populism and profligacy: Caretaker govt unveils budget to woo voters, disregards economic catastrophe inflicted by Covid

Ashim Neupane

  • Read Time 2 min.

Desperate for another term in power, KP Oli-led government tried to woo voters by bringing a budget with many populist measures and distributive approaches.

Kathmandu: On Saturday, the caretaker government unveiled a budget of Rs 1,647.57 billion, an increase of 11.47 percent in comparison to the amount allocated for the current FY.

Keeping an eye on the ‘upcoming’ midterm elections, the government has presented a populist budget with a major focus on increasing allowances and touting ambitious infrastructures — which are hard to implement, according to politicians and economists.

Despite calls from stakeholders not to bring out a full budget, the government presented a full-fledged budget with election-centric programs — increasing senior citizens’ allowance, educational loans, and huge infrastructure projects, among others. 

Out of the total budget, Rs 678.61 billion is allocated for recurrent expenditures, Rs 374.26 billion for capital expenditure, Rs 207.97 billion for financing purposes, and Rs 386.71 billion for fiscal transfer.

As the government has already announced midterm polls dissolving the House of Representatives, experts say the budget announced for the next fiscal year just seems to be a strategy to garner votes.

According to Taranath Dahal, a Right to Information activist, the government skipped the pre-budget discussions and breached the parliamentary process before dissolving the House. “As the current fiscal was ending on July end, the government had enough budget for regular expenses. There was no need to bring a full-fledged budget at this time,” said Dahal. This has raised the question of the legitimacy of the budget, he opines. 

“If you look at the budget, the government has focused on populist and ambitious programs, just targeting the elections. The government has allocated a budget for every imaginable project. It is not possible to implement such an ambitious budget — prepared just for elections,” said Dr Govinda Raj Pokharel, former Vice-Chairperson of the National Planning Commission.

Desperate for another term in power, KP Oli-led government tried to woo voters by bringing a budget with many populist measures and distributive approaches.

“People are attracted to such a budget as the government has announced to invest in every project such as roads, railway, tunnelway, and infrastructures in every district,” he said, adding that “an aggressive budget like this can not be implemented and this is just a populist budget.” 

The budget presents highly ambitious plans without any mechanism or regulation for the implementation. This type of populists programs will fizzle out in the course of time without proper implementation, Pokharel added. 

“The size of the budget has increased, but there is a huge budget deficit. The government is increasing debt every year,” Dr Pokharel said. 

Commenting on the government announcement to provide loans to students to buy laptops, Dr Pokharel said, “How can this program be implemented? This program was not announced after discussions with the banking sector. This program is just like providing loans to students, which is announced every year and never implemented,” Dr Pokharel said.

“The government presented a distributive budget, focusing on elections. The budget is clearly announced for political popularity,” said Ram Prasad Gyawali, former Head, Central Department of Economics, Tribhuvan University

“Implementing such a budget is practically impossible as the government has focused only on being politically popular,” he said.

Similarly, the political legitimacy of this budget is also under question. A few days ago, former Finance Ministers and Vice-Chairpersons of the National Planning Commission appealed to the government not to bring full budget through the ordinance.