AS the country slips deeper into political uncertainty, the country’s bumpy political ride is all set to get rougher still with another ugly wrangling on annual budget in the offing. The Bhattarai-led government—which has been struggling to manage public expenditures with the partial budget introduced through an ordinance back in July—has been making a case for a complete budget and has called for national consensus on economic matters. The opposition, however, has ruled out consensus on the budget as long as the present government remains in power. They have made it clear that only a national government formed after the ouster of Bhattarai can bring a budget to tide over the remaining period of the current fiscal year that ends mid-July. The opposition parties do have a point when they argue that the interim government which has failed to hold fresh election for constituent assembly, something it was mandated to do, shouldn’t be given a free hand on crucial policy measures that can have long-term consequences. The opposition has been particularly alarmed by a number of recent government economic policies, which they see as going against basic liberal economic principles. But, we believe that rather than instinctively opposing any proposal for a complete budget, they should take an approach that allows the economy to run its normal course even while they continue to press for a national government to hold new CA polls.
The county has already seen the devastating impact of a partial budget. Most importantly, with one-third appropriation, government agencies couldn’t call for fresh construction tenders. Neither does the country have a mechanism to award tenders for one-third work nor are contractors interested in executing a tiny fraction of work. In fact, the partial budget has further worsened our already weak expenditure capacity, which is proving to be a major barrier in Nepal’s development efforts. It has also doomed repeated efforts to boost development spending that creates jobs and boosts consumption. Similarly, lack of full budget has also undermined Nepal’s policy consistency, which is crucial for luring foreign investors interested in long-term investments in vital sectors like hydropower. The partial budget significantly eroded the confidence of all investors exploring opportunities in Nepal. Moreover, the partial budget weakened economic reform initiatives, something that the country desperately needs to deal with various bottlenecks in development. Strong commitment to economic reforms is a must not only to create more space for private sector but also to ensure donor support.
We support the idea of a complete budget, but one brought with consensus among major parties. That is the best way to shield the economy from the country’s messy politics. Regrettably, we don’t see ruling parties making much of an effort to bring opposition parties on board. The ruling parties have failed to come up with proposals to address the issues raised by the opposition. Instead, they seem keen on portraying opposition parties as barriers to development. Such a divisive policy won’t work. We urge the government to show the sincerity for meaningful dialogue with major parties and create conducive environment for a complete consensus budget.