Partial or one-third budget? Finance Ministry at a loss

KATHMANDU, JUL 12 -

While opposition political parties were against bringing a ‘full budget’ as planned by the government on Tuesday, confusion still persists over the modality of budget. This has also affected the Finance Ministry’s plan to introduce a new budget on July 16.

Amid confusion, the budget division of the ministry is yet to start preparation for the budget presentation till Wednesday evening. The parties that were supposed to hold discussion over the budget on Wednesday, did not sit for the discussion.

The major opposition parties including the Nepali Congress and CPN-UML met President Ram Baran Yadav on Wednesday and told him that they favoured the budget as mentioned in Article 96 A (2) of the Interim Constitution.

The government on Tuesday pressed for a partial budget with few new programmes, even as the opposition parties remained adamant for an advance budget through an ordinance as per Article 96 A (2) of the Interim Constitution.

The Article 96 A (2) allows the government to bring a budget not surpassing one-third of the total expenditure of the current fiscal year. However, the government is still pitching for

partial budget that will enable it to allocate resources for holding Constituent Assembly election and compensation package for former Maoist combatants opting voluntary retirement.

According to the Finance Ministry, as the current budget has allocated only Rs 250 million for the Election Commission (EC), it will get just one third of that amount which is

inadequate to hold the elections in case the budget is brought under Article 96 A (2).

Likewise, the government had spent Rs 4 billion for compensating the retiring former Maoist combatants this year from the Finance Ministry’s emergency budget heading as there was no specific budget allocated for the purpose.

“If the budget is introduced as per the Article 96 A (2) of the interim constitution, the government can spend just one-third of that amount which will be insufficient to meet the requirement,” said a senior official at the Finance Ministry. On the other hand, Nepal Army has also sought Rs 2 billion to build infrastructure for accommodating the former combatants joining the army.

In the absence of full budget, the works related to infrastructure development will take a beating. The works in major infrastructure projects including Kathmandu-Tarai Fast Track, Mid-Hill Highway, and Postal Highway will slowdown. “Although the works in these projects will not stop, there is confusion about budget allocation once the one-third of the budget is spent,” said a finance ministry official. When the advance budget was brought two years ago, the allocated one-third budget had sustained expenditure up to mid-November. However, the country had witnessed the lack of necessary budget to purchase medicines, food for jailbirds among others. “Economy is being undermined in the name of postponing the political crisis,” complained the ministry official.


Source: http://www.ekantipur.com/2012/07/12/business/partial-or-one-third-budget-finance-ministry-at-a-loss/356990/