The government’s announcement of budget (sized Rs 351.93 billion) on Tuesday san political consensus comes as a double whammy. First, it has increased the polarization between the governing and opposition parties, which was certainly not what people had hoped for at this critical juncture. Second, even at the risk of driving the opposition further apart, the government didn’t dare incorporate programs that could have boosted the country’s moribund economy. Rather, its capital budget allocations are Rs 25 billion less than last year’s allocation. Plus there are no new offers to motivate the private sector. The government will also have to do without domestic borrowing, meaning it would not be able to use this fiscal tool to maintain money supply and control inflation. On the whole, the new budget serves neither the political nor the economic interest of the country.
Nonetheless, the new budget has certainly managed to avert a full-blown fiscal crisis. As the government had spent almost all of its recurrent budget (worth Rs 80.02 billion) by mid-November, in the event of a no budget it could have failed to fulfill even its basic obligations like payment of salary to government staff, teachers, health workers and security personnel; or arranging for free medicines and social security allowances. Without a budget, the government would have struggled even to carry out its day-to-day operations. The new budget has thus saved the country from an immediate crisis, but by ignoring consensus politics, the government could have invited another protracted crisis.
We have all along advocated for a full budget, for we believe a complete budget is vital to give the country’s flagging economy a much-needed boost. But we had also maintained that such a budget should have come only through broad political understanding, for in the absence of a conducive political atmosphere, full budget alone—irrespective of its size and content—would do no good. Now the new budget can neither guarantee smooth implementation of development projects, nor prompt investors to inject more money into job-creating enterprises. In this, the ruling coalition has failed to live up to people’s expectations. By virtue of its position and its expected duty towards the country, the government should have shouldered more responsibility to build consensus. Sadly, that was not the case.
Despite these lapses, we believe it is never too late to right the wrongs. Hence, we once again urge the government to take meaningful steps to rebuild the environment of trust and bring the opposition parties on board. We also urge the opposition parties to refrain from unnecessarily hyping the importance of budget on the country’s body politics. As experienced leaders, they must surely understand that a budget can always be reworked once the political situation turns more favorable.
Given the current state of constitutional and political deadlock, which has reigned in the country since the dissolution of Constituent Assembly on May 27, they surely understand that only broad political consensus can bring constitution making and the larger political process back on track. That is certainly what people wish for at this critical juncture. Hence, we urge both the sides to work together and continue negotiations for a complete budget and an outlet to the prolonged impasse