Go for early budget

Parliament’s endorsement of the replacement budget without any changes has finally made way for the continuity of the budget for the remaining five months of the current fiscal year. Although late, this development is a welcome one, for it has ended long-running confusion over the fate of the budget. However, what is a bit disturbing is that some influential partners in the present coalition have started talking about bringing in a supplementary budget for what they describe as ´making people feel the change of government´.



We believe this is not a good idea because it will bring nothing good and only a bunch of bad things. If brought in, a supplementary budget will land ongoing development programs in turmoil and, more importantly, it will be worthless as the time for implementation will be too short for the programs envisaged by such a budget.



The country is already suffering from poor implementation of development programs. Over the first seven months of this fiscal year, the government has barely spent 10 percent of the capital budget. Since long back, Republica has been urging the government to focus on boosting development spending since this would bring much positive impact. Development spending creates job opportunities and links producers with markets in the medium term, and it develops educated and productive human capital and spurs economic growth in the longer term.



Most importantly, it will help fight poverty and fulfill development aspirations, which are tied up with the notion of a peace dividend. Sadly though, these critical development processes remained hostage over the important first seven months of the political deadlock. This must not happen any more.



Hence, our call to the government is go for an early budget, may be in April -- three months prior to the scheduled start of the fiscal year. The three-month period will provide enough time for prudent selection of programs with the participation of the people. We believe it will break a long-running malpractice of announcing the fiscal budget in haste and help ensure that the sluggish development process takes a new momentum come next fiscal year.



This is also crucial for utilizing the huge deposits locked up in the national treasury and will end ills like liquidity crisis, which is hurting the operation of banks and the financial system. Most importantly, the early budget approach will make sure that next fiscal year’s budget gets enforced on time and enable executing agencies concerned to work for one full year and make up any loss. Despite deep-rooted inter-party mistrusts, we urge all major political players to be united in introducing a major reform in our public spending system.

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