Thursday, 28 October, 2021

People-Centric Budget

The government unveiled the annual budget for the fiscal year 2021/22 on Saturday, which primarily seeks to end COVID-19 pandemic and gain fast economic recovery. The post-pandemic phase demands greater investment to revive economy through growth, reconstruction, and employment generation so the budget size has been increased by Rs. 173 billion from the last fiscal year. While announcing the budget of Rs. 1.647 trillion, Finance Minister Bishnu Prasad Paudel had incorporated the sound suggestions of business sector and set higher goals on annual economic growth, inflation rate and resource mobilisation. The financial blueprint is not just music to the ears of private sector, it has well maintained spirit of welfare state by substantially increasing the allowance for the senior citizens and social security schemes. As the House of Representatives (HoR) has already been dissolved, the budget was introduced through the Finance Ordinance, Ordinance to Raise National Debt and Appropriation Ordinance 2077 endorsed by the President earlier in the same day.

As expected, the recurrent expenditure that stands at Rs. 678.6 billion surpassed the capital (Rs. 374.2 billion) and financial management (Rs. 207.9 billion) budget. It is the challenge for every government to spend the larger portion of development budget that is the key to boost infrastructure development and real economy as a whole. It requires practical cooperation between the political, bureaucratic and private sector in judiciously spending capital expenditures. In order to strengthen federal structure and make its economy viable, the provinces and local bodies have been provided Rs. 386.7 billion. The government targets to achieve 6.5 per cent economic growth in the coming fiscal year. This projection is based on the assumption that the pandemic will soon come under control as the government expects the supply of required amount of vaccines in the near future.

Giving top priority to saving the lives of people from the COVID-19 pandemic, the government has allocated a whopping Rs. 122.77 billion for the health sector. The amount will go for vaccinating the people, and testing and treating the COVID-19 patients free of cost, and enhancing the health infrastructure. The country suffered the shortage of oxygen, ICU beds and ventilators with the outbreak of the second wave of virus, and now this allocation is expected to ease the problems faced by infected persons and public health institutions. It has become urgent to prevent and control the raging virus to return to normalcy and revive the battered economy. Similarly, the areas like education, agriculture, road, railway and energy infrastructure have got increased amount of budget. The outlay separated for completing the strategic and pride projects like Kathmandu Terai Expressway will fuel growth at the national and local levels.

The budget has provided relief to the pandemic-hit business community, encouraged investors and offered financial scheme of self-employment to the educated youth. Heavy tax discount on the import of the electronic vehicles is likely to promote green economy and export trade. Rs. 13 billion set aside for refinancing the business and industry can check the spillover effects of the pandemic. The government has taken bold decision by scrapping the Poverty Alleviation Fund, Election Constituency Development Programme and Local Infrastructure Development Partnership Programme blamed for promoting corruption and parochial development approach. Introduced in a difficult time, the budget aims to focus on speedy recovery from the pandemic and recession by injecting confidence in all segments of population. No doubt, it is ambitious, balanced and people-centric budget and its success largely hinges on its effective implementation. Thus, the government should show strategic vision and skills to materialise its commitments and programmes spelt out in the budget.