We can safely make two observations about the new national budget. One, it is oblivious to the current and future impacts of the Covid-19 pandemic. Two, it fails to honor the constitutional commitment to devolve power and resources away from Kathmandu. All of Nepal’s major income-earning sectors are taking a battering. But Finance Minister Yubaraj Khatiwada still expects the economy to grow by seven percent. The government has come up with highly optimistic numbers on domestic revenue mobilization, too, which is again not in keeping with an economy under great stress. Moreover, as countries around the world tighten belts and focus on national rebuilding, Nepal is hoping to get Rs 299.5 billion in foreign loans. The government commitment to revitalize agriculture is likewise belied by increased import duties on chemical fertilizers.
As curiously, three years after the country’s formal federalization, the federal government seems to have no intent to develop power and resources, thus undercutting the very rationale of the federal project. As fiscal federalism expert Khim Lal Devkota pointed to APEX, the new budget does nothing to decentralize the federal government’s highly centralized resource mobilization powers. The local governments, which are supposed to take the government to people’s doorsteps, have been saddled with a legion of responsibilities and yet are barred from generating their own income. It was also laughable to hear the foreign minister read out the federal government’s forestation and local road building plans in the annual budget; the constitution has already delegated these responsibilities to the local governments.
This kind of centralized budget is sure to exacerbate the Covid-19 crisis. Local authorities don’t have money to buy the most rudimentary stuff for the quarantine facilities they are building. Often, there is no food for those quarantined, nor are there enough toilets. A quarantine room meant for two people is being crammed with 10-12 folks. But our federal ministers and bureaucrats, the models of rectitude, don’t trust local representatives with money. The big and small Covid-19 funds will continue to be sanctioned from the center rather than be entrusted with the local bodies that can prioritize and spend them most judiciously. Local health centers and district hospitals are desperately short of qualified manpower, yet the budget has no provisions to fill these vacancies either. We only give a small glimpse of the highlights of the new budget here. Yet even this snapshot is enough to suggest the budget was for a few close to power than the many far from it.