Populist fiscal budget
The Himalayan Times
2 June 2022
Populist fiscal budget
The Nepal government on Sunday made public its annual budget of Rs 1.793 trillion for the fiscal year 2022-23, highlighting 'Make in Nepal’ and ‘Made in Nepal’ campaigns realising their importance now. The budget’s main focus seems to be on inclusive development, inflation control, providing adequate resources to the provincial and local governments, and a self-reliant economy by boosting home grown agricultural products. Rising imports from daily consumable items, ready-made garments, petroleum products to construction materials has hit hard to the country’s vulnerable economic situation. However, the government blames the COVID pandemic and the on-going Russian military operation in Ukraine.
Out of the allocated expenditure, the government has targeted to finance Rs 1.240 trillion through revenue mobilisation. For the remaining amount, the government plans to meet from domestic borrowing of Rs 256 billion and through foreign loans of Rs 242.26 billion and from foreign grants amounting to Rs 55.46 billion. A serious question arises here as to what happens to the next year’s overall plan and programme if the government fails to come up with the expected foreign loans and grants. Furthermore, the government, amid the critical economic situation, has targeted to achieve an ambitious economic growth rate of 8 per cent for the next fiscal year, compared to the initial target of 6.5 per cent for the current fiscal year, which does not seem attainable considering the rising level of trade deficit.
According to data released by the Nepal Rastra Bank earlier this month, the country's average inflation stood at 7.14 per cent, which is the highest in the last 67 months. Consumers are already hit hard by sky-rocketing price rise of daily consumable commodities due to the increase in the petroleum products’ prices. However, the government has assured in its next year’s budget to retain inflation rate within the 7 per cent limit which seems unrealistic looking at current inflation trend. It seems that, looking at the overall budget allocations to the sectorial programmes, the government, which has only about six months to go, has pushed forward more populist budget keeping in mind the upcoming provincial and federal elections.
Rai Biren Bangdel
Maharajgunj.
