Tuesday, July 9, 2019

Macro-criticality of social spending

Social spending plays a vital role in people’s lives, especially those of vulnerable, marginalized, and elderly. It an important part of inclusive economic growth and poverty alleviation strategy. It promotes financial security (to smooth consumption over lifetime) and social cohesion. 

According to the IMF, social spending covers (the first two are traditionally thought of as social protection):
  • Social insurance: financed by contributions or payroll taxes (such as public pension, health, unemployment, sickness and maternity leave 
  • Social assistance: financed from general government revenue (such as universal and targeted transfers, child benefits, active labor market policies
  • Public spending on health and education 
Social spending matters now more than ever because countries face a declining workforce but an increasing number of retirees (mostly in developed countries), negative effect of technology on work and wages for some workers with particular skills set, rising inequality (both income and opportunity), barriers to women’s labor force participation, and climate change, among others. 
  • Advanced economies need to strengthen their health and pension systems to enhance spending efficiency and to expand coverage.
  • Growing youth population and low women LFPR mean that emerging markets and developing countries have to absorb more women and youth into employment. Social benefit systems (and their financing) need to support, rather than disincentivize, their employability. For this education and training systems are critical.
  • Technological change is transforming labor markets as mobility of labor across sectors increases and flexible work arrangements (part-time and temporary work, self-employment) become popular. These bring in more volatility to careers and income streams. AI and robotics could render a range of skills redundant and disrupt labor market. Adaptable education and training are crucial for continuously upgrading skills, and these should be complemented by policies to facilitate labor market matching.
  • Climate change means increased risk from extreme weather events and natural disasters, severely affecting low-income and small island states and pushing many households into poverty. It will require enhancing capacity of their social safety nets. 
Therefore, social spending should be an integral part of macroeconomic policy. So how do we design the most effective social spending given fiscal space constraints? 

A recent IMF paper sheds light into this aspect.  Fiscal space is required to increase spending in education (free primary and secondary school education), healthcare (free basic healthcare), unemployment and elderly allowance, public pension, guaranteed minimum wage, etc.  These are also a part of SDGs and could be thought of as investment. These investments should be
  • Adequate (spending adequacy): Higher social spending is required to fill the gap in education, healthcare and social protection coverage— especially important to achieve the SDGs. It is crucial to successfully transition to more normal career/life choices or outcomes.  
  • Efficient (spending efficiency): High spending alone may not translate into high social outcomes. For instance, high education and health expenditure alone may not translate into higher graduation or enrollment and health outcome index. Such programs should not also create significant work disincentives, which could result in high unemployment and spending. Avoiding duplication of social spending programs is important to avoid high and inefficient administrative costs.
  • Financed sustainably (fiscal sustainability): Sustainable financing requires an appropriate balance between financing, revenue mobilization, and spending in social protection transfers and investment in education, health and physical infrastructure.
The IMF considers social spending to be “macro-critical” through these three key channels. Also, choosing either universal or targeted transfers should be country-specific (social and political preferences) but consistent with fiscal and administrative constraints. The IMF will design programs and conditionality by considering social spending needs too. It will help countries strengthen tax capacity, improve the quality of social spending, and address data and information gaps. 

Financing strategy could include effective strategies to improve tax compliance; progressive personal income taxes for higher income groups; effective taxation of corporate income; a broad-based consumption tax; efficient taxation of goods with negative consumption externalities such as fossil fuels, tobacco and alcohol; and plugging in tax evasion and avoidance. 

Here is link to the background papers for IMF's engagement on social spending. Case studies here.

Tuesday, July 2, 2019

Lack of testing labs, expenditure rush, no bailout for NAC and more


From The Kathmandu Post: The Ministry of Agriculture and Livestock Development has sought Rs250 million from the government to upgrade the existing plant quarantine facilities and chemical testing labs in a bid to make life easier for vegetable and fruit importers. The government has made it mandatory for imported farm products to be tested for chemical contamination, but none of the border points is appropriately equipped to conduct such checks. So samples of imported farm products have to be sent to one of the seven facilities in the country which have the proper equipment and personnel. For this reason, hundreds of trucks loaded with imported vegetables and fruits are stranded at the border as they wait for the test results to come back.

According to the Agriculture Ministry, plant quarantine facilities are available at 15 customs points--11 on the Nepal-India border (Kakarbhitta, Biratnagar, Bhantabari, Jaleshwor, Malangwa, Birgunj, Bhairahawa, Krishna Nagar, Rupaidiya, Gaddachauki and one more); three on the Nepal-China border (Tatopani, Lo Manthang and Kerung) and one at Tribhuvan International Airport.

Currently, the labs can only test imported farm products for disease. They lack the equipment and technical manpower to test for chemical residues in imported edibles. Tej Bahadur Subedi, spokesperson for the Agriculture Ministry, said they plan to train manpower for the quarantine labs besides installing the necessary equipment.There are Rapid Bioassay for Pesticide Residue Laboratories at seven locations--Kalimati, Birtamod, Malangwa, Nepalgunj, Attariya, Butwal and Pokhara. These labs can test for the presence of chemicals in vegetables and fruits, but they can test for chemicals only under two variants--organophosphate and carbamate.


From Kantipur Daily: ऐन र संसदीय समितिको निर्देशनविपरीत सरकारले बजेटको अत्यधिक रकम असारमा खर्च गरिरहेको छ । असारका १५ दिनको तथ्यांक हेर्दा दिनहुँ औसतमा साढे ४ अर्ब रुपैयाँका दरले बजेट खर्च भइरहेको छ । आर्थिक वर्षको सुरुका महिनामा खर्च नगर्ने र असार लागेपछि अत्यधिक खर्चिने प्रवृत्ति रोक्न यसै वर्ष संसद्को अर्थसमितिले अन्तिम महिनामा कुल बजेटको १० प्रतिशतभन्दा बढी खर्च गर्न नपाइने व्यवस्था गरेको छ । तर १५ दिनमै बजेटको ५.२१ प्रतिशत खर्च भइसकेकाले संसदीय समितिको निर्देशन र अन्य कानुनी व्यवस्था सरकारले उल्लंघन गर्ने निश्चित जस्तै छ ।

आर्थिक वर्षको मध्य अवधिका महिनामा मुस्किलले दैनिक डेढ अर्ब रुपैयाँ खर्च गरेको सरकारले असारका १५ दिनमै ६८ अर्ब ४६ करोड ९५ लाख रुपैयाँ सकेको छ । महालेखा नियन्त्रकको कार्यालयको तथ्यांकमा उल्लेख भएअनुसार १५ दिनमा खर्चिएको रकम साउन एक महिनामा खर्च गरिएको बजेटभन्दा ३८ प्रतिशत बढी हो । साउनमा २५ अर्ब ९० करोड रुपैयाँ खर्च भएको थियो ।असारे खर्चको विकृति विकास बजेटमा झनै बढी छ । साउनमा दैनिक केही करोड र त्यसपछिका महिनामा १ अर्ब पनि खर्च नगरेको सरकारले अहिले दैनिक औसतमा १ अर्ब १६ करोड रुपैयाँका दरले विकास बजेट सकिरहेको छ । यस वर्ष सरकारले ३ खर्ब १३ अर्ब ९९ करोड रुपैयाँ विकास निर्माणका लागि विनियोजन गरेको छ । यसको साढे ५ प्रतिशत अर्थात् १७ अर्ब ५१ करोड ७५ लाख रुपैयाँ असारका १५ दिनमा खर्च गरेको छ ।

खर्चमा सुधार हुन नसकेको वर्षौंदेखिको समस्या समाधान गर्न नयाँ संविधानमा जेठ १५ मै बजेट पेस गर्ने मिति तोकियो । नयाँ आर्थिक वर्ष लाग्नुपूर्व असार मसान्तमै बजेट पास भई साउन १ देखि नै अख्तियारी जान थालेको दुई वर्ष भइसकेको छ । संविधान र कानुनमा खर्च र असारे विकास रोक्ने व्यवस्थासँगै संसदकै विषयगत समितिदेखि सरोकारवाला निकायहरूले बजेट कार्यान्वयनका लागि दर्जनौं निर्देशन हरेक वर्ष दिन्छन् । यो विकृति रोक्न यस पटक प्रधानमन्त्री केपी शर्मा ओली आफैं अग्रसर भएका पनि थिए । उनले हरेक मन्त्रालयहरूको खर्च तथा अन्य प्रगति विवरण हेर्न एक सफ्टवेयर निर्माण गर्ने, त्यसका आधारमा मन्त्रालयहरूको मूल्यांकन गर्ने र सुधारका उपाय तथा निर्देशन दिने काम पनि गरे ।आर्थिक वर्षको सुरुमा हरेक महिनाजस्तै प्रधानमन्त्री ओलीले समीक्षा पनि गरे । समीक्षामा उनले प्रगतिमाथि असन्तुष्टि जनाउँदै ‘र, तर भन्न पाइन्न’ भन्दै प्रगति देखाउन निर्देशन दिएका थिए । तर अहिले उनको समीक्षाको काम नै रोकिएको छ । वर्षौंदेखिको यो प्रवृत्ति कम गर्न व्यवस्थापिका संसद् र सरकारका विभिन्न निकायले मापदण्ड, निर्देशन र कानुनमार्फत अंकुश लगाउने गरेका छन् । तर हरेक वर्ष उक्त नीति, निर्देशन तथा कानुनको उल्लंघन हुँदै आएको छ ।


From myRepublica: Prime Minister KP Oli has said the government will not inject funds in the crisis-ridden Nepal Airlines Corporation (NAC) under the existing circumstances. Speaking at the 61st-anniversary function of the national flag carrier in the capital, Prime Minister Oli said that the government was not going to make any more investment in the crisis-ridden airline company until it improves its performance. “In the current situation, the government cannot inject any money. Without good management and operation, I don't think the situation will improve only by doling out funds,” he said, putting reform of the NAC as a precondition for providing any more funds to the airline company. The statement by prime minister comes following recent requests by the NAC to the government to provide a bailout of Rs 20 billion.

The airline company currently has two wide-body and two narrow-body aircraft in operation. They fly to seven countries including India, Malaysia and Qatar. Although the NAC purchased two wide-body Airbus A330 jets last year, it has not been able to find new destinations. Against the expectations that the new flights will help in the turnaround of the loss-making company, it is struggling to increase flights and destinations. It even postponed its earlier plan to fly to Osaka of Japan from the first week of July, citing poor ticket bookings.
>>More from Kantipur here


From myRepublica: The result shows that there are 923,356 establishments out of which 462,605 (50.1%) are registered, 460,422 (49.9%) are not registered and 329 (0.04%) registration is unknown. The number of person engaged in these establishments are 3,228,457 persons where 2,012,237 (62.3%) are male and 1,216,220 (37.7%) are female. The final results are based on the new administrative area as of April 14, 2018 when the field enumeration was conducted, reads a press release issued by JICA Nepal.

More from Kantipur: नेपालमा सञ्चालनमा रहेका एक करिब आधा व्यवसायहरू आफू बसोबास गर्ने घरबाट सञ्चालन हुने गरेको सरकारी अध्ययनले देखाएको छ । सञ्चालनमा रहेका करिब ९ लाख २३ हजार व्यवसायमध्ये करिब ४२ प्रतिशत व्यवसाय यसरी सञ्चालन भइरहेका छन् । केन्द्रीय तथ्यांक विभागले सोमबार सार्वजनिक गरेको राष्ट्रिय आर्थिक गणनाको नतिजाअनुसार नेपालका ३ लाख ८६ हजार ३ सय २३ प्रतिष्ठानहरू आफू बसोबास गरेको घरबाट नै सञ्चालन भइरहेको छ । आफ्नो बासस्थानभन्दा फरक स्थानमा सञ्चालित प्रतिष्ठानको संख्या ३ लाख २३ हजार छन् । कुल व्यवसायमध्ये आफ्नो बासस्थानभन्दा फरक स्थानमा सञ्चालित प्रतिष्ठानको प्रतिशत ३५ छ । करिब ४ प्रतिशत व्यवसाय भने बाटो र सडकमा सञ्चालित रहेको अध्ययनले देखाएको छ । आधुनिक व्यापार मलमा २ प्रतिशत व्यवसाय मात्रै सञ्चालित छन् । अध्ययनको नतिजाअनुसार नेपालका अधिकांश व्यवसाय निकै सानो स्थानमा सञ्चालित छन् । ७६ प्रतिशतभन्दा बढी व्यवसाय ५ सय वर्गफिटभन्दा कम क्षेत्रफलमा सञ्चालित रहेको सर्वेक्षणको निष्कर्ष छ ।

Sunday, June 23, 2019

दिशाहीन प्रादेशिक बजेट

यो बिचार कान्तिपुरमा असार ८, २०७६ गते प्रकाशित भएको थियो।



सातै प्रदेशका अर्थमन्त्रीले असार १ गते आआफ्ना प्रादेशिक सभामा आर्थिक वर्ष २०७६/७७ को बजेट पेस गरे । प्रादेशिक सरकारको बजेट निकै सानो आकारको भए पनि सातै अर्थमन्त्रीले केन्द्रीय तहका अर्थमन्त्रीले जस्तै वितरणमुखी बजेट ल्याएका छन् । उपलब्ध स्रोतलाई सयौं खुद्रे आयोजनामा कनिकाझैं छरेका छन् । 

प्रदेशहरूले कुल २ खर्ब ५९ अर्बको बजेट ल्याएका छन् । यो खर्च धान्न तिनीहरू विशेषतः केन्द्र सरकारले प्रदान गर्ने चार प्रकारका अनुदान, राजस्व बाँडफाँट, प्रदेशभित्र उठाइने आन्तरिक राजस्व, प्रदेशभित्रै र केन्द्र सरकारसँग लिने ऋणमा भर पर्छन् । केन्द्रले चार प्रकारको अनुदान दिन्छ– वित्तीय समानीकरण, ससर्त, समपूरक र विशेष अनुदान ।

त्यस्तै, केन्द्रले कुल मूल्य अभिवृद्धि कर (भ्याट) र अन्तरिक अन्तःशुल्क कर संकलनको १५ प्रतिशत प्रदेशलाई र अरू १५ प्रतिशत स्थानीय सरकारलाई दिन्छ । कुल बजेटको ६० प्रतिशतभन्दा धेरै खर्च धान्न प्रदेशहरू केन्द्रका यिनै दुई स्रोतमा निर्भर छन् । अहिले प्रदेशको आन्तरिक राजस्वको हिस्सा निकै नगण्य छ ।

यति हुँदाहुँदै पनि प्रदेश अर्थमन्त्रीले बजेटको आकार अनावश्यक ठूलो बनाएका छन् । धेरै आलोचना भइरहेको संसद् विकास कोषको सिको गरेका छन् । प्रदेशका अर्थमन्त्रीहरूले केन्द्रीय अर्थमन्त्रीले भन्दा भिन्न उद्देश्यका साथ प्रादेशिक महत्त्वलाई ध्यानमा राखी बजेट ल्याएर फरक पहिचान बनाउनुपर्थ्यो तर केन्द्रकै सिको गरे 

प्रदेशले आफ्नो भूमिका प्रभावकारी बनाउन खास गरी तीन पक्षमा ध्यान दिएर बजेट बनाउनुपर्ने आवश्यकता थियो– पहिलो, केन्द्रले प्राथमिकतामा राखेर स्थानीय सरकारसँगको सहकार्यमा गर्ने योजना र कार्यक्रमलाई टेवा पुग्ने गरी समन्वय गर्ने । यसका लागि चाहिने संस्थागत संयन्त्रको विकासमा जोड दिन उपयुक्त हुन्थ्यो ।
गाउँमा कुलो बनाउन र खुद्रे बाटो खन्न त स्थानीय सरकारले नै सक्छन् । यस्ता परियोजनाभन्दा जिल्ला र स्थानीय तह जोड्ने स्तरीय बाटो, सिंचाइ परियोजना, सहरी बस्ती विकास, औद्योगिक क्षेत्रको प्रवर्द्धनलगायतमा ध्यान दिनुपर्ने थियो ।

दोस्रो, प्रादेशिक स्तरमा रणनीतिक महत्त्व राख्ने पूर्वाधारका योजनाको पहिचान गर्न र प्रारम्भिक अध्ययन गर्न बजेट विनियोजन गर्नुपर्थ्यो । केन्द्रीय राष्ट्रिय गौरवका आयोजनाको सिको गर्दै कतिपय प्रदेश बजेटमार्फत प्रदेश गौरवका आयोजनाको अवधारणामा अघि बढेका छन् ।

यो पनि केन्द्रकै शैलीमा हचुवाका भरमा अघि बढे परिणाम आउनेछैन । तेस्रो, निजी क्षेत्रको लगानी बढाउन चाहिने कानुन र नियमहरूको तयारी तथा लगानीलाई आकर्षक गर्न चाहिने संयन्त्रमा जोड दिनुपर्थ्यो । सहकारी र प्रतिस्पर्धी संघीयताको मर्म पनि यही हो ।

प्रादेशिक बजेटका पाँच विशेषता

पहिलो, चालु आर्थिक वर्षको प्रादेशिक बजेटभन्दा आगामी वर्षको बजेट प्रस्तुति र लेखांकन पद्धतिमा उल्लेखनीय प्रगति भएको देखिन्छ । केन्द्रको बजेटसँग धेरै मेल खान्छ । यसले बजेटको लेखांकन र विश्लेषण सहज बनाउँछ तर प्रदेशका अर्थमन्त्रीहरूले स्रोतको कमीका बाबजुद केन्द्रको जस्तो वितरणमुखी र लोकप्रिय बजेट अहिल्यै ल्याउनु हुँदैनथ्यो ।

देशले बजेट ल्याउन थालेको बल्ल दुई वर्ष भयो । अहिलेको समय भनेको थिति बसाल्ने, कानुन र नीति निर्माण गर्ने, प्रादेशिक तहमा आर्थिक वृद्धि, समृद्धिको खाका कोर्ने र स्रोतको पहिचान गर्ने हो । केन्द्रको सीमित अनुदान र चालु वर्षमा खर्च गर्न नसकेर बचेको पैसाबाट बजेट बढ्दा र सयौं योजनामा छर्न हतार गर्दा माथि उल्लिखित काम गर्न सातै अर्थमन्त्री चुकेका छन् । बजेट यसरी ल्याएका छन्, मानौं प्रादेशिक बजेटको अभ्यास दशकौंदेखि भइराखेको छ ।

प्रदेशले साना र खुद्रे कार्यक्रम आफूमा निर्भर स्थानीय सरकारलाई सञ्चालन गर्न दिनु मुनासिब हुन्छ । प्रदेशले स्थानीय सरकारलाई दिने अनुदानबाट यस्तो काम गराउन सकिन्छ । प्रदेशका सबै स्थानीय तहमा औद्योगिक क्षेत्र, कृषि आधुनिकीकरण, प्रादेशिक कम्पनी तथा विश्वविद्यालय, टेलिमेडिसिन र सार्वजनिक–निजी साझेदारीजस्ता कार्यक्रममा कुनै अध्ययनबिनै विनियोजन गरिएको बजेट समयमा सदुपयोगको सम्भावना न्यून छ ।

दोस्रो, बेथिति र भ्रष्टाचारमा लिप्त केन्द्र सरकारको संसद् विकास कोषको सिको गर्दै प्रदेशका अर्थमन्त्रीहरूले पनि प्रदेश सांसदलाई बजेट दिए । भर्खर बजेट बनाउन सुरु गरेका अर्थमन्त्रीहरूले यस्ता आर्थिक अपचलन हुने कार्यक्रमलाई प्राथमिकता दिँदा उनीहरूमा बजेट निर्माणको सिद्धान्त र विधिको बुझाइ कम भएको प्रस्ट छ ।
गण्डकी र प्रदेश ५ बाहेक अरू प्रदेशले कुल आन्तरिक राजस्वको २० प्रतिशतभन्दा धेरै बजेट आफ्ना संसद्लाई खर्च गर्न विनियोजन गरेका छन् । प्रदेश २ ले अनुमानित आन्तरिक राजस्वको ७८.४ प्रतिशत संसद्लाई खर्च गर्न दिन लागेको छ । त्यस्तै, प्रदेश ३ ले २१.१ प्रतिशत, कर्णालीले ३४२.४ प्रतिशत र सुदूरपश्चिमले २८२.३ प्रतिशत खर्च गर्न दिँदै छन् ।

जनताबाट करका रूपमा उठाएको यो रकम केन्द्रले प्रदेशलाई दिने वित्तीय अनुदान र राजस्व बाँडफाँटबाट प्राप्त हुन्छ । कानुनी तथा नीतिगत काम र सरकार तथा विकास परियोजनाहरूको अनुगमन गर्नुको साटो सांसदलाई परियोजना छनोट र खर्च गर्न दिनु कुनै पनि हिसाबले न्यायोचित छैन ।

अहिले नै केन्द्र र प्रदेशका संसद्लाई विनियोजन गरेको बजेट कुल गार्हस्थ उत्पादन (जीडीपी) को करिब ०.७ प्रतिशत छ । यो बेतिथिको सिको स्थानीय सरकारहरूले पनि नगर्लान् भन्न सकिन्न । सांसदलाई परियोजना छनोट र खर्च गर्न दिँदा खर्चको लेखांकन र कामको निरीक्षणमा गम्भीरता देखिँदैन ।

यो केवल कार्यकर्ता पोस्न र मतदाता रिझाउनै प्रयोग भइरहेको छ । यसबाट सिद्धान्त, दर्शन, नीति, नियमको हैन, पैसाको राजनीति मौलाउँछ । मौलाइरहेकै पनि छ । बहालवालासांसदलाई आफ्नो निर्वाचन क्षेत्रमा यसरी मनलागी खर्च गर्न दिँदा अर्को चुनावमा नयाँ राजनीतिज्ञको प्रवेशमा अंकुश लाग्छ । यो राजनीतिक सिन्डिकेट हो ।
तेस्रो, प्रदेश २, गण्डकी र कर्णालीले भएको स्रोतले नपुगेर अन्तरिक बजार अथवा केन्द्र सरकारसँग ऋण लिने रणनीति बजेटमा राखेका छन् । राष्ट्रिय प्राकृतिक स्रोत तथा वित्त आयोगले केन्द्रले जीडीपीको अधिकतम ५ प्रतिशत तथा प्रदेश र स्थानीय सरकारले भ्याट र अन्तरिक अन्तःशुल्कबाट आफ्नो भागमा आउने रकमको बढीमा १० प्रतिशत ऋण लिन पाउने व्यवस्था गरेको छ ।

केन्द्रले बजारबाट ऋण उठाउँदै आएको अभ्यास छ भने प्रदेशले त्यस्तो गरेको छैन । यस्तो योजना बनाएका प्रदेशहरूले कस्तो संयन्त्र प्रयोग गरेर ऋण उठाउने हुन् भन्ने अहिले प्रस्ट भइसकेको छैन । केन्द्रले राष्ट्र बैंकमार्फत निश्चित समयमा तरलतालाई ध्यानमा राखेर आफ्नो ट्रेजरी बिल र बन्ड बजारमा कारोबार गर्छ । अर्थात्, ऋण लिन्छ वा किन्छ, ऋणको ब्याज र साँवा तिर्छ पनि ।

बजारले वा केन्द्रले दिने ऋणको ब्याज र भुक्तानी गर्नुपर्ने अवधि कति हुन्छ भन्ने अहिल्यै प्रस्ट छैन । प्रदेश २ ले १.३ अर्ब, गण्डकी प्रदेशले २ अर्ब (बजारबाट १ अर्ब र सरकारबाट १ अर्ब) र कर्णाली प्रदेशले ०.८ अर्ब ऋण उठाउने घोषणा गरिसकेका छन् ।

चौथो, केन्द्रीय अर्थमन्त्रीले जस्तै प्रदेशका अर्थमन्त्रीहरूले पनि प्रभावकारी बजेट कार्यान्वयनका लागि कुनै ठोस योजना प्रस्तुत गरेनन् । प्रदेशले चालु आर्थिक वर्षको बजेटको ३० प्रतिशत पनि खर्च गर्न सकेका छैनन् । बचेको रकम आगामी आर्थिक वर्ष खर्च गर्ने गरी वितरणमुखी बजेट र खुद्रे योजना प्रस्ताव गरेका छन् । कर्मचारी अभाव, कानुन र नीतिको अभाव, केन्द्र र स्थानीय सरकारसँग योजना हस्तान्तरण, कार्यक्षेत्रको विवाद र संस्थागत संयन्त्रजस्ता कारणले प्रदेशको वास्तविक खर्च बजेट विनियोजनभन्दा निकै कम हुने सम्भावना छ ।

पाँचौं, प्रदेशका अर्थमन्त्रीहरूले बजेटमा प्रादेशिक आर्थिक वृद्धिको लक्ष्य राख्न छुटाएका छन् । आर्थिक वृद्धिको लक्ष्यबिनाको बजेट भाषण अलि अपूर्ण र दिशाहीन हुन्छ । प्रदेशको आर्थिक वृद्धि (अर्थात् जीडीपी वृद्धिको लक्ष्य) पूर्वानुमान गर्न अहिल्यै सबै आर्थिक सूचक उपलब्ध छैनन् र प्रदेश स्तरको तथ्यांक विभाग पनि तयार छैन ।

केन्द्रीय तथ्यांक विभागले पहिलो पटक प्रादेशिक तहको २०७५/७६ को आर्थिक वृद्धिको पूर्वानुमान प्रकाशित गरेको छ । यसैका आधारमा २०७६/७७ को आर्थिक वृद्धिको पूर्वानुमान गर्न मिल्दैन । कारण जेसुकै होस्, बजेट भनेको आर्थिक तथा सामाजिक उपलब्धि प्राप्त गर्ने लक्ष्य तोकिएको अर्थराजनीतिक दस्ताबेज हो । त्यसकारण हरेक बजेटमा आर्थिक वृद्धिको लक्ष्य तोकिनु अनिवार्य हुन्छ ।

प्रदेशका योजना आयोगले आफ्ना प्रमुख आर्थिक सूचकहरूलाई विश्लेषण गरेर अर्थतन्त्रको आकार पूर्वानुमान गर्न सक्छन् । जस्तै– कृषि उत्पादन, दर्ता उद्योगको संख्या र क्षमता उपयोग, निजी क्षेत्रलाई दिने ऋणको वृद्धि, आन्तरिक राजस्व परिचालन, खानी तथा उत्खनन गतिविधि, सवारीसाधनको दर्ता, ऊर्जा उत्पादन, सार्वजनिक खर्च, अन्तरिक हवाई उडान, आन्तरिक पर्यटन र पेट्रोलियम इन्धनको बिक्रीबारेका तथ्यांक प्रदेश योजना अयोगले संकलन गर्न सक्छन् ।

समग्रमा, प्रदेशका अर्थमन्त्रीले केन्द्रको हुबहु सिको गर्नुभन्दा मौलिक सम्भावना, अवसर र स्रोतलाई प्रदेशको आर्थिक वृद्धि र समावेशी समृद्धिका लागि कसरी उपयोग गर्न सकिन्छ भनेर बजेट तर्जुमा गर्नुपर्छ । अब, आगामी आर्थिक वर्षको चुनौती बजेटको पूर्ण कार्यान्वयन समयमै गर्नु हो । विशेष गरेर केन्द्र र प्रदेशको मिलाएर ५ खर्ब ४६ अर्ब अर्थात् जीडीपीको १३.७ प्रतिशत पुँजीगत खर्च गर्नमै जोड दिन जरुरी छ ।

Provincial budget for FY2020: Nothing new to offer

It was published in The Kathmandu Post, 19 June 2019. An earlier blog on the same issue is here



The provincial budgets are a mere copy of the federal budget with unrealistic goals

Earlier this week, the finance ministers of the seven provinces presented their budgets for the fiscal year 2019-20 to their respective provincial assemblies. This is the second full budget the provinces have unveiled. They have relied on federal fiscal transfers (in the form of fiscal equalisation, conditional, matching and special grants), value-added tax and internal excise duty collections shared by the federal government, and cash savings from the fiscal year 2018-19 (which basically is the unspent resources from last fiscal year) to finance a combined Rs259.6 billion expenditure plan in the seven provinces.

The internal revenue mobilisation target is too small compared to the expenditure needs, as the provinces are still struggling with adequate human resources and a systematic mechanism to collect taxes that fall under their jurisdiction. Still, the provinces have increased the budget envelope drastically by including too many projects that they will not be able to execute. Furthermore, they have copied wholesale some of the bad budget practices of the federal government, including funds for parliamentarians.

Province 1 has earmarked Rs42.4 billion for FY2019-20--of which about 55.6 percent is capital expenditure. It is planning to meet 75 percent of the expenditure need by relying on fiscal transfers and revenue shared by the federal government, 15.7 percent using last year’s savings, and the rest by mobilising internal revenue. Similarly, Province 2 has earmarked Rs37.4 billion for FY2019-20--of which about half is capital expenditure. It is planning to meet 69 percent of the expenditure need by relying on fiscal transfers and revenue shared by the federal government, 19.9 percent using last year’s savings, and the rest by mobilising internal revenue and borrowing about Rs1.3 billion from the internal market.

Province 3 has earmarked Rs47.6 billion--of which about 48 percent is capital expenditure. It is planning to meet 66.1 percent of the expenditure need by relying on fiscal transfers and revenue shared by the federal government, 14.2 percent using last year’s savings, and the rest by mobilising internal revenue. Meanwhile, Gandaki has earmarked Rs32.1 billion--of which about 61.8 percent is capital expenditure. It is planning to meet 68.7 percent of the expenditure need by relying on fiscal transfers and revenue shared by the federal government, 14.9 percent using last year’s savings (unspent budget), and the rest by mobilising internal revenue and borrowing about Rs2 billion from the internal market and federal government.

Province 5 has earmarked Rs36.4 billion for FY2019-20--of which about 51 percent is capital expenditure. It is planning to meet 73.7 percent of the expenditure need by relying on fiscal transfers and revenue shared by the federal government, 13.7 percent using last year’s savings (unspent budget), and the rest by mobilising internal revenue. Similarly, Karnali has earmarked Rs34.4 billion--of which about 62 percent is capital expenditure. It is planning to meet 71 percent of the expenditure need by relying on fiscal transfers and revenue shared by the federal government, 26 percent using last year’s savings (unspent budget), and the rest by mobilising internal revenue and borrowing about Rs800 million from the internal market.

Meanwhile, Sudurpaschim has earmarked Rs28.2 billion for the upcoming fiscal year--of which about 62 percent is capital expenditure. It is planning to meet 81.6 percent of the expenditure need by relying on fiscal transfers and revenue shared by the federal government, 17 percent using last year’s savings (unspent budget), and the rest by mobilising internal revenue.

Defining features

First, compared to the first provincial budget, this one is much more coherent in terms of presentation and accounting methodology. This sort of coherency in budget preparation across the three tiers of government is essential for budget accounting as well as for informed analysis. However, there is no need to make provincial budget-making processes and practices an exact copy of the federal budget, especially the tendency to distribute meagre resources across sectors and in projects that are not implementation-ready. This has heightened the risk of malpractices and budget under-execution. The provincial government should ideally focus on priorities that are unique to the provinces, create an institutional mechanism to link and cooperate on projects and programmes with local governments and the federal government, and compete with each other to attract private sector investment by offering the best investment regime. This is the whole essence of cooperative and competitive federalism. Unfortunately, this characteristic is missing in the provincial budgets.

Second, provincial finance ministers have copied the federal government’s unpopular programme to distribute money to parliamentarians to fund projects of their choosing. This is wasteful spending riddled with malpractices and corruption. Except in the case of provinces 5 and Gandaki, the money allocated to fund pet projects of assembly members account for more than 20 percent of their internal revenue. For instance, such spending account for almost half of the projected internal revenue of Province 1. It is 78.4 percent of projected internal revenue in the case of Province 2, 21.1 percent in Province 3, 342.4 percent in Karnali province, and 282.3 percent in Sudur Paschim Province. Cumulatively, federal and provincial constituency development funds amount to about 0.7 percent of the GDP. Gradually, even the 753 local governments will follow the same practice when they present their budgets.

Third, Provinces 2, Gandaki and Karnali are planning to borrow money to meet expenditure needs. Although the federal government has published guidelines for internal borrowing by provincial and local governments, they haven’t actively borrowed money from the internal market so far. It remains to be seen how they will price their bills and bonds, and what interest rates will be charged by the market.

Fourth, as in the case with the federal budget, none of the provincial finance ministers has presented a viable plan for effective budget implementation. They have hardly used half of the allocated budget for this fiscal year and they still lack the required institutional setup and human resources to plan and implement projects. The tussle between federal and provincial governments over staff recruitment is not over yet. Capital spending will be affected by the lack of coordination between federal and provincial governments (especially on timely delegation of projects and authority to use funds), lack of human resources and institutional setup, and lack required provincial laws and regulations.

Friday, June 21, 2019

Late monsoon and fertilizer shortage, India's priority for the next five years, and more


From The Kathmandu Post: With the agricultural sector already bracing for a late and “below normal” monsoon, a critical shortage of chemical fertilisers due to a delay in imports is expected to significantly affect paddy plantation during the peak season. The Ministry of Agriculture and Livestock Development said that its stock of di-ammonium phosphate (DAP), the world's most widely used phosphorus fertiliser, is running out and imports have been delayed due to the Finance Ministry not releasing funds on time, said Agriculture Ministry officials. There are 10,000 tonnes of DAP in stock, not nearly enough to meet the country’s demand for even 15 days.

The shortage is likely to diminish paddy production for the upcoming fiscal year at a time when monsoon has also been projected to be “below normal” in the key paddy producing region. Due to a favourable monsoon and ample supply of chemical fertilisers, the country recorded a bumper harvest this fiscal year. Nepal’s paddy harvest hit a record high of 5.61 million tonnes last season, up 9 percent, according to the ministry. This was on the back of a good monsoon and sufficient supply of chemical fertiliser. Paddy plantation season is a four-month period from May to August, after which harvest continues until October.


INDIA: NDA govt’s agenda for the next 5 years

From liveMint: President Ram Nath Kovind on Thursday set the tone for what Prime Minister Narendra Modi’s team will strive to accomplish in the next five years—make life easier for the common man, especially in rural areas, with a scaled-up inclusive agenda, and deliver economic policies that will double the size of the economy to $5 trillion. A corruption-free rule, an uncompromising stance on issues of national security and developing insurgency-racked Jammu and Kashmir also figure on top of the agenda. On the economic front, structural reforms in the farm sector and new policies on industry and retail trade are in the offing.

The President outlined the immediate steps his government was taking to ease the pain from a slowdown in farm output— ₹90,000 crore of annual income support for farmers announced in the interim budget in February—besides the longer-term measures that are in the pipeline. These include a ₹25 trillion investment in farm productivity. Modi had announced the creation of a task force of chief ministers last week to draw up a plan for structural reforms in the agriculture sector.

The steps contemplated for inclusive growth include accident insurance cover of ₹10 lakh for GST-registered traders, banking services at the doorstep, loans of up to ₹50 lakh without collateral for entrepreneurs and construction of 20 million new village homes. Steps to make India a global manufacturing hub and simplification of tax laws are part of the economic reforms agenda. The President said the flagship Pradhan Mantri Mudra Yojana, which offers collateral-free loans of up to ₹10 lakh to non-farm small and micro enterprises launched in 2015, will now be expanded to cover 300 million people.


NEPAL: BoP under pressure as trade deficit widens

From The Himalayan Times: Owing to rising imports amid slower exports, country’s trade deficit widened by 19.7 per cent to Rs 1,099.6 billion in the first 10 months of the current fiscal year (mid-July to mid-May), according to statistics of Nepal Rastra Bank (NRB). The macroeconomic report of the first 10 months of the current fiscal published by the central bank today showed that merchandise imports increased by 19.6 per cent to Rs 1,178.14 billion in the first 10 months of 2018-19 compared to an increase of 21.8 per cent in the same period of the previous year. However, country could export goods worth only Rs 78.53 billion in the same period of this fiscal.

The widening export-import gap has also added pressure to the balance of payments (BoP) situation, as it remained at a deficit of Rs 68.2 billion in the review period compared to a deficit of Rs 18.93 billion in the same period of the previous fiscal year. Likewise, rising trade imbalance has also affected the current account, as it registered a deficit of Rs 221.4 billion in the review period. Such deficit was Rs 192.05 billion in the same period of the previous year. In the review period, capital transfer and foreign direct investment (FDI) in Nepal amounted to Rs 13.48 billion and Rs 9.47 billion, respectively. In the same period of the previous year, capital transfer and FDI amounted to Rs 14.15 billion and Rs 15.51 billion, respectively.

Wednesday, June 19, 2019

Brief overview of the provincial budgets for FY2020

Finance ministers of the seven provinces presented FY2020 budget to their respective provincial assemblies on June 16. This is the second full budget of the provinces. 

The provinces have relied on federal transfers (in the form of fiscal equalization, conditional, matching and special grants), VAT and internal excise duty collections shared by the federal government, and cash savings from FY2019 (which basically is the unspent resources from last year) to finance a combined Rs259.6 billion budget of the seven provinces. 

The internal revenue mobilization target is too small compared to the expenditure needs as the provinces are still struggling with adequate human resources and a systematic mechanism to collect taxes that fall under their jurisdiction. Total budget envelop of federal and provincial governments for FY2020 is Rs1792.6 billion (about 44.8% of GDP), of which about 30% is for capital spending.

One the defining features of the budget is that the provincial finance ministers have imitated the distributive nature of federal budget, especially in trying to cover everything with limited resources and at times without ascertaining funding sources. This has spread the budget too thin across too many sectors and programs. In fact, the provinces still do not even have the institutional structure required to execute the budget fully. It would have been prudent if the provincial finance ministers had focused on following through on signature programs of the federal government that are implemented through them and local governments, and establishing an institutional mechanism across the provincial ministries to execute budget effectively. Furthermore, they could have focused on preparing feasibility studies of strategic provincial infrastructure projects (energy, roads, urban development, drinking water supply, ICT, public institutions, industrial corridors, etc), and drafting laws and regulations to promote private sector investment, especially provincial version of the federal level laws and regulations. That said, compared to the first provincial budget, this one is much more coherent in presentation and accounting methodology. This sort of coherency in budget preparation across the three tiers of government is essential for budget accounting as well as informed analysis. 


Province 1 has earmarked Rs42.4 billion for FY2020—of which about 55.6% is capital expenditure—, which is more than double the amount it is planning to spending in FY2019. It is planning to meet 75% of the expenditure need by relying on fiscal transfers and revenue shared by federal government, 15.7% using last year’s savings (unspent budget), and the rest by mobilizing internal revenue. 

It has allocated Rs25 million for each constituency (56) and Rs5 million for all assembly members (93). As a share of estimated provincial GDP, the size of province 1’s FY2020 budget is 7.2%, up from 4.1% in FY2019.

Key focus: agricultural mechanization, tourism (even giving 6 days paid leave and Rs25,000 allowance to public sector employees for tourism promotion), transportation, bridges, irrigation, industrial park, SEZ, education, healthcare, etc


Province 2 has earmarked Rs37.4 billion for FY2020—of which about half is capital expenditure—, which is more than three times the amount it is planning to spending in FY2019. It is planning to meet 69% of the expenditure need by relying on fiscal transfers and revenue shared by federal government, 19.9% using last year’s savings (unspent budget), and the rest by mobilizing internal revenue and borrowing about Rs 1.3 billion from the internal market.

It has allocated Rs20 million for each constituency (64) and Rs10 million for all assembly members (107). As a share of estimated provincial GDP, the size of province 2’s FY2020 budget is 7.5%, up from 2.8% in FY2019.

Key focus: healthcare, housing, transport, education, industrial corridor, vocational training


Province 3 has earmarked Rs47.6 billion for FY2020—of which about 48% is capital expenditure—, which is 37.5% increase over the amount it is planning to spending in FY2019. It is planning to meet 66.1% of the expenditure need by relying on fiscal transfers and revenue shared by federal government, 14.2% using last year’s savings (unspent budget), and the rest by mobilizing internal revenue.

It has allocated Rs1.98 billion for the assembly members to spend in the projects of their choosing. As a share of estimated provincial GDP, the size of province 3’s FY2020 budget is 2.9%, up from 2.4% in FY2019.

Key focus: industrial area, transport, education, health, agriculture, tourism (2020-2030), etc


Gandaki province has earmarked Rs32.1 billion for FY2020—of which about 61.8% is capital expenditure—, which is almost double the amount it is planning to spending in FY2019. It is planning to meet 68.7% of the expenditure need by relying on fiscal transfers and revenue shared by federal government, 14.9% using last year’s savings (unspent budget), and the rest by mobilizing internal revenue and borrowing about Rs 2 billion from the internal market and federal government.

It has allocated Rs72 million for the assembly members to spend in the projects of their choosing. As a share of estimated provincial GDP, the size of Gandaki province’s FY2020 budget is 9.7%, up from 5.6% in FY2019.

Key focus: transport, drinking water, irrigation, energy, urban development, tourism, agriculture, industrial area, education, health, etc


Province 5 has earmarked Rs36.4 billion for FY2020—of which about 51% is capital expenditure—, which is 57.9% increase over the amount it is planning to spending in FY2019. It is planning to meet 73.7% of the expenditure need by relying on fiscal transfers and revenue shared by federal government, 13.7% using last year’s savings (unspent budget), and the rest by mobilizing internal revenue.

It has allocated Rs312 million for the assembly members to spend in the projects of their choosing. As a share of estimated provincial GDP, the size of province 5’s FY2020 budget is 7.0%, up from 5.1% in FY2019.

Key focus: agriculture (interest subsidy), tourism, industrial area, education, health, transport, etc 


Karnali province has earmarked Rs34.4 billion for FY2020—of which about 62% is capital expenditure. It is planning to meet 71% of the expenditure need by relying on fiscal transfers and revenue shared by federal government, 26% using last year’s savings (unspent budget), and the rest by mobilizing internal revenue and borrowing about Rs800 million from the internal market.

It has allocated Rs870 million for the assembly members to spend in the projects of their choosing. As a share of Karnali province’s GDP, the size of Karnali province’s FY2020 budget is 25%.

Key focus: infrastructure, transport, tourism, project preparation, engineering company, energy, irrigation, housing, education, healthcare, etc 


Sudur Paschim province has earmarked Rs28.2 billion for FY2020—of which about 62% is capital expenditure—, which is 54.1% increase over the amount it is planning to spending in FY2019. It is planning to meet 81.6% of the expenditure need by relying on fiscal transfers and revenue shared by federal government, 17% using last year’s savings (unspent budget), and the rest by mobilizing internal revenue.

It has allocated Rs30 million for each constituency (32). As a share of estimated provincial GDP, the size of Sudur Paschim province’s FY2020 budget is 11%, up from 8.3% in FY2019.

Key focus: agriculture, tourism, industrial area, education, infrastructure, etc 

Few preliminary thoughts on FY2020 budget of the seven provinces.

First, the practice to make provincial budget documents consistent with the federal budget format is a good initiative. It will help in informed budget analysis and policy discourse.  However, there is no need to make provincial budget making processes and practices an exact copy of the federal budget, especially the tendency to distribute meager budget across sectors and in projects that are not ready for implementation. 

We had federal and local government budgets before as well, but provincial budgets are new. The budget allocations and the long-term vision embedded in it should provide answers to people who are questioning the relevance of provinces given the substantial autonomy of local governments. Provincial governments should ideally focus on priorities that are unique to the provinces, create institutional mechanism to link and cooperate on projects and programs with local governments and federal governments, and compete with each other to attract private sector investment by offering the best investment regime. This is the whole essence of cooperative and competitive federalism. However, this characteristic is missing in the provincial budgets. The provincial finance ministers are preoccupied with distributing small amount of budget across sectors and pet programs using the funds given to them by the federal government. Most of the small, populist projects have traditionally been carried out through the local governments. There is a high possibility of duplication of projects and misuse of funds. 

Second, provincial finance ministers have copied the federal government’s unpopular program to distribute money to parliamentarians to fund projects of their choosing. These are wasteful spending riddled with malpractices and corruption. Except in the case of provinces 5 and Gandaki, the money allocated to fund pet projects of assembly members accounts for more than 20% of their internal revenue. For instance, such spending account for almost half of the projected internal revenue of province 1. It is 78.4% of projected internal revenue in the case of province 2, 21.1% in province 3, 342.4% in Karnali province, and 282.3% in Sudur Paschim province. The provincial finance ministers have copied a very bad aspect of the federal budget. Cumulatively, federal and provincial constituency development fund amounts to about 0.7% of GDP. Finance Minister Dr. Yuba Raj Khatiwada increased constituency development fund to Rs60 million from Rs40 million in FY2020 federal budget. Gradually, even the 753 local governments will follow the same practice when they present their budgets. Furthermore, giving taxpayer’s money to parliamentarians to fund small pet project of their choosing, without much oversight, is essentially a way to restrict competition from new candidates in the next election as it could be used to keep core voter base intact and happy. 

Third, provinces 2, Gandaki and Karnali are planning to borrow money to meet expenditure needs. Although the federal government has published guidelines for internal borrowing by provincial and local governments, they haven’t actively borrowed money from the internal market so far. It remains to be seen how they will price their bills and bonds and at what interest rates. Most of the budget allocation is for capital projects because some of the federal grants are either conditional or have special provisions that the provinces have to comply with. The borrowed money from internal market and federal government should not be used to expand recurrent budget, especially non-targeted and duplicate subsidies and pet programs.  

Fourth, as in the case with the federal budget, none of the provincial finance ministers presented a viable plan for effective budget implementation. They have hardly used half of the allocated budget for this fiscal year. They still lack the required institutional set up and human resources to plan and implement projects. The tussle between federal and provincial governments over staff recruitment is not over yet. Eventually, the provinces will exhaust recurrent budget, but fall short on spending capital budget. This budget savings will then be used to inflate recurrent budget in the subsequent years. Capital spending will be affected by lack of coordination between federal and provincial governments (especially timely delegation of projects and authority to use funds), human resources and institutional set up, and required provincial laws and regulations. 

Sixth, the size of provincial budgets will get larger in the coming years as they mobilize more revenue and introduce new programs tailored to their voter base. However, we will continue to observe under-execution of budget because of the missing sub-national laws, policies, regulations and institutional framework that govern public spending. 

Seventh, the provincial finance ministers did not include provincial GDP growth targets. The Central Bureau of Statistics earlier provided real GDP growth estimates for FY2020 for the seven provinces and nominal GDP figures too. The data limitation makes it hard to do any reasonable forecast for provincial GDP. However, the provincial planning commissions could have at least looked at the main proxies or lead indicators (such as agricultural production, number of industries registered, capacity utilization of firms, IIP, credit growth, internal revenue mobilization, mining and quarrying activities, vehicles registration, energy generation, public expenditure, internal tourism including domestic airline flights, sale of petroleum fuel, etc) to get a sense of provincial growth path. A budget speech without growth target is somewhat aimless. 

[Note: Here I estimated provincial nominal GDP based on their FY2019 share in national nominal GDP. See this for national level nominal GDP. ]

Monday, June 10, 2019

Nepal's FY2020 budget: Party pleasing budget

It was published in The Kathmandu Post, 31 May 2019. An earlier blog on the budget is here



Finance Minister Yubaraj Khatiwada presented the incumbent government’s second annual budget on May 29 to a joint assembly of the federal Parliament. He argued that the fiscal year 2019-20 (FY2020) budget focuses on institutionalising the achievements made since FY2019’s budget, ensuring fair distribution of resources, and strengthening the social security regime. In reality, the budget was designed to satisfy disgruntled Nepal Communist Party (NCP) leaders who had censured the finance minister for not increasing their constituency development fund and social security allowance as promised in the party’s election manifesto.

Drawn between placating the NCP leaders and the need to stick to fiscal discipline and allocative efficiency, the finance minister chose the former. In effect, he again squandered an opportune moment to consolidate social security schemes; streamline scattered and incoherent projects and enhance the allocative efficiency of capital spending; rationalise recurrent spending; institute a sound governance regime while awarding and implementing projects; take transformative measures to bring about growth-enhancing structural changes in agriculture, labour and industrial markets; and institute fiscal discipline. This was warranted given the deteriorating fiscal, financial and external sectors.

Budget overview

The increase in budget for cash-based social security allowance, the constituency development programmes (to ensure elected representatives have money to fund pet projects), and the salary of public employees led to an outsized expenditure outlay for the next fiscal year. Almost two-thirds of the Rs1.53 trillion budget (an estimated 38.8 percent of GDP)--which is 27 percent higher than the revised expenditure estimate for FY2019--consists of recurrent spending. Within recurrent spending itself, half of the money is earmarked as fiscal transfers or grants to subnational governments. The federal government’s capital spending constitutes 26.6 percent of the budget. It is used to build roads, bridges, airports and other infrastructure that are crucial to increase the productive capacity of the economy.

The government is planning to meet 64 percent of total expenditure need in FY2020 by mobilising domestic revenue, 12.7 percent from domestic borrowing through sale of its treasury bills and bonds, and the remaining 23.3 percent from foreign grants and loans. The total federal revenue target of Rs981.1 billion (after deducting revenue sharing) is about 29 percent higher than the revised revenue estimate for the fiscal year 2018-19.

The federal government is earmarking Rs130.9 billion to be shared with provincial and local governments. As per the Constitution, the federal government is mandated to share a portion based on monthly collections, 30 percent of VAT and internal excise duty, and 50 percent of royalties from natural resources. This is in addition to fiscal transfers (fiscal equalisation, conditional, complementary and special grants) and unconditional grants out of the federal government’s expenditure outlay.

The budget has three notable features. First, the government increased cash allowance for citizens who are 70 years and above by Rs1,000, making it a total of Rs3,000 per month (plus Rs1,000 medical benefit). Considering about 1.3 million people are registered to receive this benefit, the government will have to additionally allocate at least Rs15 billion for this purpose. Similarly, single women (60 years and older, either divorced or unmarried), fully and partially disabled, and indigenous people will also get an additional Rs1,000 per month, making it a total of Rs2,000 per month for these groups.

Second, the finance minister succumbed to intense pressure to increase cash allowances and funds for parliamentarians that are used to finance incoherent pet projects without much governance and oversight. He increased such discretionary funds to Rs60 million, up from Rs40 million in the current fiscal year. Each directly elected representative will now be able to spend Rs60 million in projects of over Rs1 million. Even senior party leaders from NCP itself were against allocating funds to the parliamentarians, terming it a waste of taxpayers’ money and a breeding ground for misappropriation.
Third, the increase in public employees’ wages and compensation (adjusted every two years) put pressure on the budget envelope. Salary went up by 18 percent (for gazetted officers) to 20 percent (for non-gazetted officers). However, this increase is far higher than the average inflation during the same period. Raising public sector wages drastically affects private sector wages too and exerts inflationary pressures.

Same problems

Although the budget does not include specific new projects--except for universities or roads named after past leaders--it also does not do enough to consolidate scattered, wasteful pet projects introduced in the past. In fact, increasing the funds available to federal parliamentarians exacerbates the problem and perpetuates allocative inefficiency, which is one of the major causes of the chronically low capital spending. This kind of piecemeal funding to construct substandard youth clubs, temples, covered halls, playgrounds, dirt roads, and bridges, among others without coordination with other agencies and projects is an utter waste of taxpayers’ money. Indirectly, this is an avenue to distribute money to party supporters and party-affiliated contractors. Similarly, increasing elderly allowance is another bait to attract voters at the cost of fiscal prudence.

Furthermore, as in previous budgets, a robust, credible and time-bound implementation plan to spend the earmarked money is missing. This raises doubts over timely budget execution in FY2020 as well. Even with a two-thirds majority in Parliament and introduction of the budget one-and-a-half-months prior to the start of the fiscal year, the government is unable to change the pattern of capital spending, which tends to bunch toward the last quarter (over 40 percent of actual capital spending happens in the last month of the fiscal year).

Similarly, there are no measures to check the alarmingly high fiscal deficit, which stands at over 10 percent of GDP. Higher deficit exerts inflationary pressure, raises interest rates, crowds out the private sector and fuels imports, which in turn exacerbates the current account deficit. The government needs to rationalise recurrent spending--especially streamlining subsidies and allowances, and needs to avoid duplicate, incoherent and wasteful projects--to check the rising fiscal deficit since there is little that can be done to proportionally increase revenue from the usual sources. This could have been transformative in setting the course of budget formulation.

The finance minister has also set an ambitious GDP growth target of 8.5 percent even when knowing that this is unattainable due to the forecast of an unfavourable monsoon, which affects agriculture output. Prospects of high growth in the industrial sector (thanks to projected additional hydroelectricity generation and pick up in construction activities) and continued robust services sector growth alone are not going to push GDP growth that high. Similarly, the revenue target for the upcoming fiscal year may still be high given that the government will not meet its own target for the fiscal year 2018-19.

Overall, the budget is not too bad given the demand for Rs100 million for discretionary spending by parliamentarians and higher social security allowances (around Rs5,000 per month). It has given continuity to previous programmes and projects, including a commitment to improving the investment climate and government operations. However, it fails to rein in on scattered projects to enhance allocative efficiency and promote fiscal prudence given the alarmingly high fiscal deficit.

बजेटमा राजनीति हावी

यो बिचार कान्तिपुरमा जेष्ठ २६, २०७६ गते प्रकाशित भएको थियो।



आर्थिक वर्ष २०७६/७७ को बजेट निकै वितरणमुखी र ‘पपुलिस्ट’ भएको भन्दै धेरैले आलोचना गरे । बजेट भाषणको भोलिपल्ट अर्थ मन्त्रालयमा आयोजित पत्रकार सम्मेलनमा अर्थमन्त्री युवराज खतिवडाले भने, ‘दोधारे होइन, दुईधारे बजेट ल्याएँ ।’ उनले तीव्र आर्थिक वृद्धि गर्न भौतिक पूर्वाधारमा यथेष्ट बजेट विनियोजन गरेको र सामाजिक न्यायका लागि वृद्धभत्ता बढाएको सुनाए ।

अघिल्लो वर्ष आफैंलाई मन नपरेको भनिएको सांसदलाई बजेटको उनले यस पटक खुलेर समर्थन गरे । प्रथम दुई वर्षमा तीव्र आर्थिक वृद्धि गरेर आर्थिक आधारलाई फराकिलो बनाउँदै स्रोतको सुनिश्चित गरेपछि बल्ल भत्ता बढ्ने आफ्नै सिद्धान्तको उल्टो बाटो उनले रोजे । स्रोतको सुनिश्चितता नभएका बेला नै भत्ता बढाउनुले बजेट वितरणमुखी र दोधारे मात्र होइन, वित्तीय अनुशासनलाई तिलाञ्जली दिएर निहित पार्टीगत स्वार्थ पूरा गर्न ल्याइएको प्रस्ट हुन्छ ।

अघिल्ला सरकारहरूले गर्न नसकेका आर्थिक र सामाजिक क्षेत्रमा दूरगामी प्रभाव पर्ने नीतिगत र प्रक्रियागत सुधार गर्न सक्ने जनादेश र अवसर यो सरकारसँग छ । स्रोतले धान्नै नसक्ने वितरणमुखी र लोकप्रिय बजेट ल्याउन हतारिनुअघि केही वर्ष सामाजिक सुरक्षा कार्यक्रमहरूलाई चुस्त बनाई लक्षित वर्गसम्म पुर्‍याउने पहल गर्नु जरुरी थियो ।

पुँजीगत खर्चका संरचनागत समस्या हल गर्ने, बजेट बनाइने परम्परागत प्रणालीलाई बदलेर परियोजना छनोट र बजेट विनियोजनमा आमूल परिवर्तन गर्ने, कृषि र औद्योगिक क्षेत्रमा उत्पादन तथा उत्पादकत्व बढाउन संरचनागत परिवर्तनमा पहल गर्ने, भूमि र पुँजी उत्पादनमा परिचालन गर्न कानुनी तथा नीतिगत पहल गर्ने र बिग्रँदोवित्तीय अनुशासनलाई सपार्नेजस्ता काम गर्नु उपयुक्त हुन्थ्यो । यसबाट बजेट चुहावट कम पनि हुन्थ्यो र आर्थिक वृद्धि भई सरकारलाई यथेष्ट स्रोतसाधन पनि उपलब्ध हुन्थ्यो । भत्ता र सांसदलाई पैसा बाँड्न हतारिँदा वित्तीय अनुशासन, बैंकिङ र बाह्य क्षेत्रका समस्या झन् नियन्त्रणबाहिर पुग्ने अवस्था सिर्जना भएको छ ।

बजेट आर्थिक वृद्धि र रोजगारी सिर्जनातर्फ केन्द्रित हुने भएकाले प्रत्येक वर्ष आर्थिक वृद्धिको लक्ष्य अनिवार्य राखिन्छ साथै आर्थिक वृद्धि र रोजगारीले छुन नसकेका वर्गलाई सामाजिक सुरक्षामा समेट्ने गरिन्छ । बजेट अर्थराजनीतिक दस्ताबेज हो । यसकारण स्रोतले भ्याएसम्म वित्तीय सन्तुलन नखलबल्याई भविष्यमा खर्चको बोझ नपर्ने गरी बजेटको आकार र सामाजिक सुरक्षा कार्यक्रम ल्याइन्छ । यसपालिको बजेटमा आर्थिक पक्षभन्दा पनि राजनीतिक पक्ष हावी मात्रै होइन, ‘नेकपाकरण’ भएको प्रस्ट छ ।

चार विशेषता

यो बजेटका चार मुख्य विशेषता छन् ।

पहिलो, आर्थिक आवश्यकताभन्दा पनि स्रोत निर्क्योल नहुँदै प्रधानमन्त्रीको उर्दीका कारण सांसदहरूलाई आयोजना छनोट गरी पैसा बाँड्ने सीमा २ करोडबाट ६ करोड पुर्‍याइएको छ । अघिल्लो बजेटपछि यिनै अर्थमन्त्रीले सांसदलाई बजेट विनियोजन गलत भएको र राजनीतिक दबाबका कारण आफू ‘ट्र्यापमा परेँ’ भनेका थिए । अहिले खुलेरै समर्थन गर्दै छन्, मानौं सांसदलाई बजेट नदिए विकास–निर्माण नै ठप्प हुन्छ ! संविधानको मर्म र अर्थशास्त्रको सिद्धान्तविपरीत कसरी एकै वर्षमा यो कार्यक्रम राम्रो भयो ? अहिलेसम्मको सबैभन्दा आलोचित र दुरुपयोग भनिएको यो कार्यक्रमले कसरी सांसदलाई जनतासँग नजिक बनाउँछ ?

अन्तरसमन्वय नगरी आफ्नालाई पोस्न युवा क्लब, मन्दिर, कभर्ड हल, खेलकुद मैदान, एक वर्ष पनि नटिक्ने कच्ची बाटो र पुलमा खर्च गर्दा जनताबाट उठाएको करको कसरी सदुपयोग हुन्छ ? केन्द्र सरकारको सिको गर्दै प्रादेशिक सांसदहरूले पनि यस्तै बजेट माग गरेका छन् । कानुनी तथा नीतिगत काम र सरकार तथा विकास परियोजनाहरूको अनुगमन गर्नुको साटो सांसदलाई परियोजना छनोट र खर्च गर्न दिनु कुनै पनि हिसाबले न्यायोचित छैन ।

यो विकृतिलाई हल गर्न त परै जाओस्, झन् यसकै समर्थन गर्न अर्थशास्त्री अर्थमन्त्रीलाई सुहाउँदैन । शिक्षा र स्वास्थ्यमा बजेट अपुग भएका बेला सांसदहरूलाई अर्बौं रुपैयाँ पटके आयोजनामा मनखुसी खर्च गर्न दिनु कसरी जायज हुन सक्छ ? वृद्धवृद्धा, एकल महिला, अपांग तथा लोपोन्मुख जनजातिसहित करिब १३ लाखलाई प्रत्यक्ष्य लाभ हुने गरी भत्ता बढाउँदा कम्तीमा पनी १५ अर्ब अतिरिक्त बजेट चाहिन्छ ।

तीव्र आर्थिक वृद्धि नहुँदै र राजस्व नबढ्दै यसरी पैसा बाँड्न हतारिँदा भविष्यमा आर्थिक संकट आउँछ भन्ने हेक्का हुँदाहुँदै अर्थमन्त्री र प्रधानमन्त्रीको ध्यान अर्को चुनावतिर एकोहोरियो । छरपस्ट सामाजिक सुरक्षा कार्यक्रमहरूलाई लक्षित वर्गसम्म कसरी चुस्तसँग पुर्‍याएर राज्यको ढुकुटीमा कम बोझ पार्न सकिएला भनी अध्ययन गरेर सामाजिक सुरक्षा र भत्तासम्बन्धी कार्यक्रम ल्याउनुपर्थ्यो । सस्तो लोकप्रियताका लागि पैसा थप्ने काम भयो । सामाजिक सुरक्षामा मात्र अर्को वर्ष १५७ अर्ब खर्च हुनेछ, जुन तीन वर्षमा दोब्बरभन्दा बढी हो ।

दोस्रो विशेषता हो– विस्तारकारी बजेट । अघिल्लो बजेट वित्तीय अनुशासनभित्रै बसेको जस पाएका अर्थमन्त्रीले यो पटक धेरैको आलोचना खेप्नुपर्‍यो । २०७५/७६ को संशोधित अनुमानका आधारमा २०७६/७७ को बजेट झन्डै २७ प्रतिशत बढी हो । अनुमानित कुल गार्हस्थ्य उत्पादन (जीडीपी) को ३८.३ प्रतिशत हो ।

यसको मुख्य कारण हो– चालु खर्च २२ प्रतिशत र पुँजीगत खर्च ४९ प्रतिशतले बढ्नु । पुँजीगत खर्च बढ्दा ऋण लिए पनि फरक पर्दैन, किनकि यसले धेरै वर्षसम्म प्रतिफल दिइराख्छ । चालु खर्च बढ्नु राम्रो होइन, विशेष गरी कर्मचारीको तलबभत्ता र सामाजिक सुरक्षा खर्चका कारण । अहिलेको आवश्यकता चालु खर्च घटाएर पुँजीगत खर्च वृद्धि गर्नु हो । खर्च ह्वात्तै बढाउँदा राजस्व र वैदेशिक अनुदानले नपुगेर बजेट घाटा धान्नै नसक्ने गरेर जीडीपीको १०.७ प्रतिशत बराबर हुन गएको छ । चार वर्षअघि यो जीडीपीको ०.४ प्रतिशत मात्र थियो ।

तेस्रो, सरकारी कर्मचारीको तह हेरेर १८ देखि २० प्रतिशतसम्म तलब बढाउँदा चालु खर्चभित्र पारिश्रमिक तथा सुविधा २३.७ प्रतिशतले बढेको छ । सरकारी कर्मचारीको तलब र भत्ता दुई वर्षमा एक पटक समायोजन गरिन्छ । यसपटक विगत दुई वर्षको औसत मुद्रास्फीति दरभन्दा निकै धेरै वृद्धि गरिएको छ । यसले निजी क्षेत्रको तलब वृद्धि गर्न दबाब सिर्जना भएको छ । बजारमा खुद्रा मालसामान र तरकारीको मूल्यमा चाप सिर्जना भएको छ ।

२०७५/७६ मा कुल केन्द्रीय राजस्व लगभग चालु खर्च बराबर हुने सरकारकै अनुमान छ । २०७६/७७ मा राजस्व लक्ष्य भेटिएन भने चालु खर्च धान्न हम्मे पर्नेछ र वित्तीय सन्तुलन झन् बिग्रनेछ ।

चौथो, सबै नराम्रो पनि होइन । अर्थमन्त्रीले पार्टीको राजनीतिक दबाबका बाबजुद सकेसम्म न्यायोचित बजेट ल्याउने जमर्को गरेका छन् । सबै छात्रवृत्ति कार्यक्रमलाई एउटै ढाँचामा ल्याएर अपचलन घटाउने, स्कुले विद्यार्थीलाई दिँदै आएको दिवा खानाको पैसा आमालाई दिने, मेलम्ची र महत्त्वपूर्ण पूर्वाधार परियोजनालाई यथेष्ट बजेट दिने, सामुदायिक स्कुलका विद्यार्थीलाई निःशुल्क सेनेटरी प्याड दिने, बैंकिङ मर्जरलाई प्राथमिकता दिने, आन्तरिक उत्पादनलाई करको दर समायोजन गरेर प्रवर्द्धन गर्ने, राजस्व प्रशासन र कर प्रणालीमा संरचनागत परिवर्तन गर्ने योजना राम्रा हुन् । पुँजीगत खर्चलाई बढाउन सरकारी कर्मचारीसँग कामको सम्झौता गर्ने र पर्‍यो भने बाहिरबाट आयोजना प्रमुख ल्याउने योजना पनि सराहनीय छन् ।

कार्यान्वयन हुन्छ त ?

समग्रमा यो बजेटमा अर्थनीतिभन्दा राजनीति हावी छ, अर्थमन्त्रीभन्दा उनको पार्टी हावी छ । सञ्चार माध्यमले पनि वित्तीय अनुशासनमा खतिवडामा विचलन आएको र सम्झौता गरेको भनिसकेका छन् । सही हो, अघिल्लो बजेटजस्तो सन्तुलित छैन यसपटक ।

२०७५/७६ बजेटअगाडि अर्थतन्त्रको अवस्थाबारे श्वेतपत्र ल्याएर सरकार टाट पल्टिएको र सबै आर्थिक सूचक गिरेको भनेका अर्थमन्त्रीले अहिले आएर आफूले ल्याएको बजेटको समीक्षा गर्दा देश तीव्र आर्थिक वृद्धिका बाटामा बढेको बाहेक धेरै बोलेनन् । दुई वर्षअगाडिको औसत आर्थिक वृद्धि आधारभूत मूल्यमा ७ प्रतिशत थियो भने यो आर्थिक वर्ष ६.८ प्रतिशत हुने प्रारम्भिक अनुमान छ ।

पुँजीगत खर्च अघिल्लो वर्षभन्दा थोरै हुने अनुमान छ । बैंकिङ क्षेत्रमा तरलताको समस्या झनै बल्झिएको छ । सरकारले चाहेजति आन्तरिक ऋण उठाउन सकेको छैन । चालु खातामा घाटा अहिलेसम्मकै उच्च छ र विदेशी मुद्रा सञ्चिति घट्दो छ । आन्तरिक र विदेशी लगानी घटेको छ ।

समयमै नतिजा देखाउन यो सरकारले अब दुई पक्षमा जोड दिएर काम गर्नुपर्छ ।

पहिलो, बजेट पूर्ण कार्यान्वयन गरी पुँजीगत खर्च क्षमताका साथसाथै खर्चको गुणस्तर पनि बढाउने । डेढ महिनाअगाडि बजेट ल्याई कार्यान्वयन गर्ने खाका प्रकाशित गरे पनि यो आर्थिक वर्षमा पुँजीगत खर्चमा खासै प्रगति भएको छैन । विकासको असारे प्रवृत्तिले अन्तिम चौमासिकमा ६० प्रतिशत खर्च भुक्तानी हुन्छ ।

यसका कारण हुन्– परियोजना छनोट र कार्यान्वयनमा कर्मकाण्डी काम, परियोजना व्यवस्थान र ठेकेदारको क्षमतामा कमजोरी, स्थानीय तहमा खर्च गर्ने परियोजनामा बढ्दो आर्थिक अपचलन र योजना छनोट, कार्यान्वयन तहमै राजनीतिक हस्तक्षेप । निजी लागानी बढाउन भर्खर जारी भएका कानुनलाई पूर्णता दिन नीति, नियमावली, निर्देशिका र संस्थागत ढाँचा तुरुन्त तयार पार्नुपर्छ । यसले नीतिगत र कार्यान्वयनमा स्पष्टता दिन्छ ।

दोस्रो, सरकारी काम र परियोजनामा मौलाएको आर्थिक अपचलन तथा भ्रष्टाचारलाई नियन्त्रण गर्नुपर्छ र शान्तिसुरक्षामा खलल पर्न दिनु हुन्न । यति मात्र गरे पनि ६ प्रतिशतमाथिको आर्थिक वृद्धि हासिल गर्न कुनै समस्या हुँदैन ।