Budget

It’s budget time once again and the Ministry of Finance is fully preoccupied with giving final shape to the management of resources for funding programs outlined in the annual policy and programs read out by the President in parliament on July 3. If things go as planned, the government will unveil the budget in a week. But more than policy and programs as such, it is the unending political mess that is breeding ills such as lawlessness, corruption and policy inconsistencies that continue to hobble Nepal’s listless development effort.



Past budgets unveiled many mega development programs and earmarked huge sums for them, but the outcome remained so pathetic that any optimism over this annual ritual activity of the finance ministry has been greatly dented of late. For example, even 14 years down the road, a dream scheme like the five-year Melamchi Drinking Water Project is still under construction.



We believe there is need for massive reform in the way the annual budget is announced and implemented to get this improvised country onto a trajectory of growth and development. Since decades past we have seen that it is not resources but the implementation capacity of government agencies that is the biggest hurdle. A sizable chunk of the development budget gets frozen every year.



Not that nothing has been done. The concept of three-year rolling budgets for big projects has brought some change in the implementation modality. However, the procedures for awarding contracts for medium and small projects, which can immediately benefit locals, are so roundabout and burdensome that hardly five months’ time remains in the fiscal year for the actual construction work. For years, there have been calls for improved implementation capacity of government agencies and reform in the way the annual budget is implemented but all this seems to fall on deaf ears.



We believe a separate and powerful government agency should be entrusted with executing at least two or three select projects of national importance at a time to show that we also can do what India and China have done. Frankly, we are not very hopeful that the newly constituted Railway Department has the organizational capacity to oversee and implement the multi-billion rupee Kathmandu Valley Metro Railway Project, which will hopefully be announced in the coming budget.



We also urge the government to reform the budget formulation process and bring the budget at least four months before the fiscal year commences so that all contract awarding can be completed and contractors can start work right from the beginning of that fiscal year.

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