THE government is all set to present the national budget for the fiscal year 2020/2021 on May 28 amid the existing COVID-19 crisis. The virus crisis and lengthy lockdown has indeed brought the nation's economy to its knees. The country's trade, industry, commerce, tourism, employment, exports and import, transport and revenue collection have been hit hard because the government has not yet been able to open up the economy in the wake of pandemic. The government has explicitly said that it has put people's health on its top priority rather than opening up economy in haste.

Many noted economists have put forth valuable propositions regarding the shape and size of the budget and the areas where budget should lay down its focus. They have viewed that the new budget should be realistic one with concrete programmes for reviving the sagging economy. As the government has witnessed a sharp shrinkage of resources, there will be challenges it to cover all sectors in the budget. As the economic crisis has deepened, the new budget should categorically incorporate a few major priorities such as tackling the COVID-19 related issues, protecting the lives and livelihoods of the people, proving relief and creating employment to the hard-hit people.

The senior economists have suggested that given the need of the present time, the government should introduce the new total budget ranging from Rs.1,400 billion to Rs. 16,00 billion. It had introduced a budget of Rs. 1,532. 97 billion for the current fiscal year. If the government maintains its new budget at the level recommended by the senior economists, then it can cover the budget amount from the revenue collection, domestic borrowing and foreign debt and assistance. A tightening on the collection of Value Added Tax is strongly advised at this juncture as the government is losing a huge amount of revenues due to existing practice of under-invoicing. Tax evaders should also be taken to task at a time when the government is struggling to collect revenues for maintaining its expenditure on social sector.

A bigger size budget covering a wide range of priorities would certainly put the government at a difficult situation in managing resources and implementing the budget effectively. Now is the desperate time because the sources of budget have shrunken, which is evident in lower remittance inflow and lesser collection of revenues, the government is advised to break the existing tendency of bringing an ambitious budget by inflating its size and priorities. Attention should also be paid to exclude projects that are in pipeline or less important ones as they only would cause shortfall in budget for the implementation of the present priority. In the meantime, the government will certainly do justice to the contagion-hit masses if the new budget keeps its focus on protecting life, livelihoods and creating jobs in various sectors, but most importantly in agriculture sector, as several Nepalis have already lost their jobs or will lose them. The economists have forwarded their advice in good faith and the government must try its best to include their recommendations while formulating the new budget so as to make it more pragmatic and realistic.