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The government has brought an ambitious budget for the upcoming fiscal year. It aims to spend Rs 1,860.39bn, achieve six percent economic growth rate and contain inflation at 5.3 percent in fiscal year 2024-25. On paper, the budget appears balanced. It focuses on economic reforms and private sector participation, and prioritizes sectors like agriculture, tourism and information technology. However, the real test lies in its implementation as the government has historically struggled in budget implementation.

One of the major hurdles is the ambitious revenue target. The government has set a target of collecting 23 percent of GDP as revenue in the upcoming fiscal year. This seems unrealistic as the government could raise only around 18 percent of GDP as revenue in the current fiscal year. There is nothing wrong in being ambitious. However, setting unattainable goals can undermine credibility and lead to significant deficits. Another challenge lies in the allocation of resources for projects without finalized agreements for foreign aid or investment. 

This tendency of allocating funds based on anticipated deals is one of the reasons behind inflated budget size with limited actual spending. Furthermore, there have been frequent policy shifts in certain sectors, such as tax incentives for billet manufacturing industries and taxation of electric vehicles. Frequent changes in policies can discourage private investment and erode investor confidence, and could derail the government’s efforts to achieve high economic growth.

Strong coordination among various government agencies and three tiers of government is needed for effective implementation of the budget. We have seen how lack of coordination among state agencies can lead to delays, cost overruns and sub-par outcomes. The budget has brought ambitious plans for economic corridors, industrial zones and special economic regions. If we are to transform these ideas into reality, we need to have a strong commitment, consistent policies and a conducive investment climate. The proposed Sovereign Wealth Fund to channel remittances into productive sectors is a promising concept. However, it remains unclear how the government intends to implement it. Moreover, slow capital spending has always been a problem in our budget implementation. The government needs to expedite capital spending if it is to achieve targets set in the budget.

The success of the budget hinges on the government’s ability to prioritize and execute important projects and initiatives effectively. Past budgets have suffered from a lack of focus, slow spending and allocation of resources thinly across numerous projects. Overcoming bureaucratic shortcomings, maintaining policy consistency and fostering an enabling environment for private sector participation will be important for effective implementation of the budget. 

The Department of Hydrology and Meteorology has predicted the possibility of heavy rainfall in the South Asian region, including Nepal, this monsoon. According to the department, Kaski, Syangja, Lamjung and southern parts of Manang and Mustang are likely to receive heavy rains this year.

Heavy rainfall has also been forecast for the eastern and northern regions of Gulmi, and the western and northern regions of Gorkha. Furthermore, Saptari, major parts of Siraha, southern regions of Dhanusha, Sarlahi, and Mahottari, the western region of Sunsari, and the southern region of Udayapur are also expected to experience heavy monsoon rains.

However, it seems the government has not made adequate preparations to tackle potential monsoon hazards. As temperatures rise and air becomes warmer, we are witnessing more intense downpours, increasing the risks of floods and landslides. In recent years, Nepal has witnessed two major flood events—the Melamchi flood and the Kagbeni, Mustang flood—caused by heavy rainfall over a short period.

The government should make necessary preparations to address climate-related hazards. There is a designated agency, the National Disaster Risk Reduction Management Authority (NDRRMA) under the Ministry of Home Affairs, responsible for addressing natural disasters. However, it has yet to formulate concrete plans to mitigate risks even though monsoon is at our doorsteps. According to NDRRMA, floods have claimed 876 lives, with an additional 563 reported missing and 209 injured over the past 12 years. At the same time, landslides have resulted in 1,483 fatalities, with 347 people still missing and 1,224 others injured. The monetary damage caused by monsoon disasters over the past 12 years is estimated at
Rs 20bn.   

Despite such an alarming scenario, the government of Nepal seems least bothered about making adequate preparations for mitigating risks. There is a lack of coordination among the state's security agencies, such as the Nepali Army, Nepal Police and the Armed Police Force. Additionally, there is no proper mechanism for effective coordination among the federal, provincial and local governments. Without further ado, the government should prioritize preparations to safeguard people's lives and properties from monsoon hazards.

The government has presented its policies and programs for the upcoming fiscal year  in parliament. The programs brought by the government are a mere continuation of the previous fiscal year. Some new programs with attractive slogans have also been included. It remains to be seen whether these programs will be implemented and yield desired results. Political parties, however, have done their part—ruling ones have welcomed it, while those in the opposition have said it lacks direction and most of the programs are unimplementable. 

Nepal has not left any stone unturned in formulating policies, programs and plans to make it a developed nation. However, development works are progressing at a snail’s pace while irresponsibility and lack of good governance are rampant. As a result, the issues covered in policies/programs and budgeted projects remain similar for decades. The country cannot move forward this way. Mere continuity of the tradition cannot yield new achievements. 

Programs like achieving agricultural self-sufficiency, completing national pride projects on time, increasing per capita income, building smart cities, creating jobs, boosting exports and constructing railways are featured in policies and programs and budget speech almost every year. These programs do not yield desired results as neither sufficient budgetary allocations are made, nor sufficient homeworks are done before their announcements. The government brings policies and programs with great enthusiasm every year. However, there is no mechanism to gauge the effectiveness of these policies programs. The effectiveness of these policies and programs are neither reviewed, nor agencies and officials responsible for implementing them are held accountable. 

This situation will persist unless a scientific basis is provided for how the programs will be implemented. So rather than focusing on what programs are included, it is more important to identify which ones will actually be implemented and prioritize them accordingly. For effective implementation of the policies and programs, the government needs to be stable. Even with the same prime minister, frequent changes in ministers and policies have been occurring, let alone the uncertainty of which party will ally with whom to topple or form a new government. Political parties need to be aware that development programs cannot deliver desired outcomes in such situations.

The budget session of the Parliament is set to begin on May 10 with the main purpose of endorsing the budget for the fiscal year 2024-2025. As per the constitutional provision, the government must table the budget by May 28. However, it remains uncertain whether the main opposition Nepali Congress (NC) will allow a smooth functioning of the House session, a prerequisite for tabling and deliberating on the budget bill.

The winter session of the parliament ended following a prolonged obstruction from the NC. This compelled the government to issue ordinances on crucial investment-related laws. The NC has been demanding formation of a parliamentary panel to investigate Deputy Prime Minister and Home Minister Rabi Lamichhane's alleged involvement in the misuse of cooperative funds. The victims of cooperative frauds have filed cases against Lamichhane in Pokhara and other places, but state agencies have shown a lack of enthusiasm to investigate the matter. Ahead of the parliamentary session, the NC's parliamentary board meeting has reaffirmed its stance that an inquiry panel should be formed for smooth functioning of the parliament. Lamichhane and senior ruling party leaders, however, maintain that there is no need for a probe panel specifically targeting Lamichhane. While the ruling parties seem to have agreed to form a panel to investigate overall cases related to cooperatives, the NC insists on a Lamichhane-centered investigation panel. On this issue, both ruling and opposition parties should find a middle ground, as the budget process should not be obstructed for any reason. Currently, with the country facing an economic crisis, people are eagerly awaiting the measures the government will take through the budget to address the situation. Recent history shows that both ruling and opposition parties cannot bear prolonged obstructions of parliament and have to arrive at a middle ground. 

Our political parties are adept at seeking win-win solutions through abstract and vague compromises. They can apply the same formula this time too. Both the ruling and opposition parties should act responsibly to end parliamentary obstructions without delay. There is no doubt that questions surround Lamichhane, and people want to know the actual status. The only option for political parties is to pave the way for an investigation against Lamichhane while also allowing parliament to function smoothly. Parliament should be allowed to hold discussions on various aspects of the budget, which is the main duty of our lawmakers.