The country's debt has doubled in three years: from Rs 843 billion to Rs 1589 billion Every Nepali has a debt of Rs 28,000 three years ago and Rs 52,000 now

During the three-year tenure of Prime Minister KP Sharma Oli, the country's debt burden has almost doubled.

When Oli was appointed as the Prime Minister, the total debt of the country was Rs  843 billion (8 kharba 43 Arba) in Falgun 2074 BS, Three years later, it increased to Rs. 1589.46 billion (15 Kharba 89 Arba 46 Crore) in Falgun 2077 BS. The country's own public debt over a three-year period has an increase of Rs. 776 billion rupees, which is an increase of 88.5%.

The share of debt in GDP has also increased at a higher rate in the meantime.

In FY 074/75, the outstanding debt of the government was 24.5 percent of the GDP now it has risen to 37.3 percent.

In 2074 BS, every Nepali had 28,779 loans but now it has increased to 52,375.

The money borrowed by the government should be spent on infrastructure development and big projects. However, even though the country is in debt, the debt has not been spent on development.

The size of public debt has increased by Rs. 776 billion in these three years.

In the same period, the country's capital expenditure was only Rs. 566 billion.

This means that in the meantime, the government has borrowed Rs 180 billion and spent it on salaries, vehicle purchases and administrative work.

Out of the outstanding net loan, Rs. 717.50 billion is internal and Rs. 871.95 billion is external.

The ratio of internal and external debt to public debt is 45.1 percent and external debt is 54.9 percent.

In the first eight months of the current Fiscal Year alone, the government has mobilized domestic debt of Rs. 112.52 billion and foreign debt of Rs. 85.2 billion.

Economic growth is likely to fall to minus this year as well

Like last fiscal year, the economic growth rate is likely to go into minus this year as well. The Central Bureau of Statistics (CBS) had projected a growth rate of 4 percent on the basis of the data before the lockdown began.

This was far below the seven percent target announced by the current fiscal year budget. According to the Economic Survey, the impact of the second wave of COVID-19 and the ban imposed for its prevention and control has not been able to achieve the target.

Finance Minister Bishnu Prasad Poudel said that there was a challenge to achieve the targeted economic growth due to Covid.

"Achieving the growth target is becoming more challenging as economic activity is likely to shrink due to the second wave of the Covid-19 epidemic, which has been spreading widely for the last nine months of the current fiscal year," he said in an economic survey.

 

Despite the economic crisis caused by the epidemic, the economy is expected to grow at a "V-shape", with the second wave of Covid-19 spreading with the onset of the new year posing a new challenge and risk to the economy, the survey said.

"Nepal's economy has been negative for the first time in two decades at 2.12 per cent as the Kovid-19 epidemic has affected the economy, which is higher than the economic damage caused by the devastating earthquake in 1972," he said.

The economic survey states, "Nepal's economic growth rate was projected to be 4.01 percent in the current fiscal year with the expectation of a gradual improvement in the health crisis, but achieving the projected economic growth rate is challenging due to the second wave of Covid-19, which has been expanding rapidly in recent days."

Revenue mobilization and expenditure targets will not be met

The government has projected that even revenue mobilization and spending targets will not be met due to cowardice and steps taken to prevent it. The ministry estimates that revenue mobilization will be affected as per the target due to contraction in economic activities and reduction in aggregate demand.

According to the Ministry, capital expenditure could not be incurred on time due to delay in implementation of projects and programs due to the Covid epidemic. The report states that the second wave of Covid has created more complexity in capital expenditure in the remaining period as well.

The government has spent a total budget of Rs. 858 billion 8 kharba 58 Arba). This is 58 percent of the total budget. However, out of the Rs 353 billion (3kharba 53 Arba) allocated in the capital budget, only Rs 132.69 billion (1Kharba 32 Arba and 69 Crore) has been spent, which is only 37.6 percent.

Poverty and unemployment will increase

The report points out that the Covid epidemic has had a comparatively greater impact on the service sector, including transportation, tourism, hotels and restaurants, wholesale and retail.

Economic activity has shrunk due to the lockdown. The risk of re-contraction of economic activities in the industrial sector has increased. The report shows that unemployment and poverty will increase due to the impact on economic and social activities.

"Covid has affected almost all sectors of Nepal's economy, reduced the size of foreign trade, led to a sharp decline in the number of workers going for foreign employment, and halted tourist arrivals. The damage from the current health crisis is estimated to be far greater than the impact of the financial crisis on Nepal's economy and the impact of the earthquake, which has been seen in the world economy at different times. It is also estimated to have put pressure on poverty and unemployment." mentioned in the report.

The Prime Minister read the policy and program instead of the President, the budget to be presented in the Parliament is coming from Singha Durbar

Prime Minister KP Sharma Oli on Friday presented the government's policy and program to be presented by the President in both the Houses of Parliament in the name of 'Address in the Name of the Nation'.

In point 70 of the 72-point address, "the work to be done in the coming fiscal year will be made public through the budget statement of the finance minister on the basis of these policies." It is against the rules of the House of Representatives to make public the policy and program to be passed by the majority of the parliament through television.

Not only that, the government did not submit the budget principles and priorities to the parliament, which is against the Economic Procedure and Financial Accountability Act. Similarly, Finance Minister Bishnu Poudel is unveiling the budget for the coming fiscal year 078/79 from the Prime Minister's Office on Saturday. That would be unconstitutional.

In paragraph 7 of the Rules of Procedure of the House of Representatives, the President may submit the government's policy and program to the Parliament through his address, the Speaker may discuss the matter in the House, and if the Speaker deems it appropriate, the amendment may also be tabled. There is an arrangement for the Prime Minister to answer the questions raised and the Speaker to present the policy and program in the decision-making meeting.

In this way, if the Speaker fails to present the government's policy and program for decision, it is as if the Prime Minister has not received a vote of confidence. In that case, the prime minister has to resign. Sources close to Baluwatar claim that the Prime Minister dissolved the parliament to avoid this risk.

"The prime minister has dissolved the parliament because the policies and programs have not been passed by the parliament, That is why the Prime Minister read out the policy and program document in the name of the nation on Friday. The budget will also come through an ordinance." the source said.

Article 119, Clause 3 of the Constitution of Nepal, 2072 BS provides that the Minister of Finance shall submit the estimates of revenue and expenditure to the Federal Parliament on the 15th of June every year. Finance Minister Bishnu Poudel is preparing to present the budget from the Prime Minister's Office at 4 pm on Saturday.

Even though there was a parliament before that, the government did not submit the budget principles and priorities to the parliament by rejecting the Economic Procedure and Financial Accountability Act.

Article 11 of the Act stipulates that the Finance Minister must present to the Federal Parliament at least 15 days before the submission of the Appropriation Bill for each fiscal year the principles and priorities of the government's budget and programs and projects or programs to be included in the Appropriation Bill. The House of Representatives Rules 2075 has the same provision.

Preparation of distribution oriented full-sized budget

The government is going to bring full size distribution oriented budget for the coming fiscal year 078/79 from the ordinance. The government was under pressure from all quarters saying that only a provisional budget should be brought in the absence of parliament and the announcement of elections. However, ignoring public opinion and pressure, the government is preparing to bring a full-fledged distribution-oriented budget from the ordinance.

Finance Minister Bishnu Prasad Poudel is scheduled to unveil the next year's budget at 4 pm on Saturday, said Finance Ministry spokesperson Mahesh Acharya.

The Finance Minister will unveil the budget in the hall of the Prime Minister's Office. The Ministry of Finance has completed the preparation of the budget. The budget was finalized by late Friday. It will be passed by the Council of Ministers on Saturday and taken to the President's Office. After the budget ordinance is issued by the President, the Finance Minister will make the budget public.

Addressing the nation on Friday, Prime Minister KP Sharma Oli has indicated that the government will bring a full-fledged distribution-oriented budget. "Policies and programs will be implemented in the concept of full government," he said in his announcement.

He said that all the work and plans of the government will be focused on fulfilling the national aspiration of 'Prosperous Nepal, Happy Nepali'.

"All activities will be guided by the long-term vision up to the BS 2100, analyzing the impact of upgrading from least developed countries to developing nations, formulating necessary strategies and action plans and implementing them. The issue of achieving sustainable development goals will always be kept in mind. Care will be taken to prevent the Covid epidemic from hampering our development journey. " The Prime Minister said.

What will be the budget oriented on?

The budget for the coming fiscal year will focus on prevention, control and treatment of covid, election to the House of Representatives, local elections, economic recovery and social upliftment, according to the Ministry of Finance.

The Ministry of Finance has stated that the focus will be on prevention, control and treatment of Covid, election of the House of Representatives, local level election, economic recovery and social upliftment. In line with this, increase the old age allowance in the budget, purchase vaccine against covid, continue the Prime Minister's employment program, continue the Prime Minister's agricultural modernization program, tax exemption for economic recovery, tax rate manipulation, announcement of training and scholarships, increase women entrepreneurship.

Similarly, emphasis has been laid on health infrastructure. Budget has been allocated to continue the ongoing project.\

How big is the size of the budget?

According to the three-year medium-term budget estimate and projection prepared by the National Planning Commission, a budget of Rs. 1,697.75 billion (16 Kharba 97 Arba 75 Crore) has been projected for the coming fiscal year.

The commission has given a budget ceiling of Rs. 1,697 billion to the finance ministry.

However, resource estimates have declined somewhat as economic activity has slowed due to the high rate of second-wave covid infection and the ban on its prevention.

Based on the latest resource limit given by the Resources Committee, the Ministry of Finance has prepared a budget of around Rs.1600 billion.

The government had allocated a budget of Rs 1474 billion for the current fiscal year.

The Ministry of Finance has reduced the revision in the current fiscal year's budget by 8.91 percent through the half-yearly review. The size of the revised budget is estimated to be Rs. 1344 billion.

The election code of conduct says: No new program can be brought

According to the Election Code of Conduct, 2072 BS, the government has made provision that new policies, programs and plans cannot be brought after the election has been declared.

"Governments of Nepal, state governments, local levels or public bodies should not announce, approve, operate or mobilize new policies, plans and programs unless they are included in the annual budget and program and mobilize manpower and resources for that purpose. Governments or public bodies at all three levels should not lay the foundation stone, inaugurate, survey, study or grant grants for any project." The code of conduct states.

Earlier, former chief commissioners of the Election Commission Surya Prasad Shrestha, Bhojraj Pokhrel, Neelkanth Upreti, Dr. Ayodhya Prasad Yadav and Dolakha Bahadur Gurung have drawn the attention of the government not to bring the budget in a way that would affect the voters.

In a joint statement, they pointed out that the caretaker government should not bring new policies and programs in the budget for the coming fiscal year. He also drew the attention of the Election Commission to make the government aware about bringing a provisional budget.