Budget concerns


    The budget for the next fiscal 2014/15 is about to come out and everyone is keen to know the exact divisions of the budget pie. This budget will be presented by a newly elected government with the help of a fresh team of planning commission officers. Development workers, economists, industrialists and the general public all are looking forward to it with expectation. 


    It is the second time that the republic is having a full-fledged budget. The last budget was designed by bureaucrats and technocrats and criticized for failing to take into account people’s real needs. For example, only around 7 percent was allocated for infrastructure development. If we evaluate the past year’s performance there is little room for optimism. High inflation, increasing trade deficit, inability to spend large portion of development budget, and dissonance (beruju) in budget utilization are worryingly persistent. 

    However, this time an elected government is in-charge of the budget. It has made many development promises to voters. So, besides its main duty of the completing the constitution, it has to come good on people’s expectation of significant increase in budget allocation for development works.

    It is true that different potential beneficiaries have different demands and aspirations. But the government should concentrate on mega projects and not cut down the national budget into small pieces for insignificant works or for vested political interests. One example of budget misallocation was the attempt of last government to distribute a million rupee to each Member of Parliament before the Constituent Assembly election. This attempt was thwarted by the Supreme Court. Economists and development experts strongly criticized this move as it would increase fiscal irregularity, inflation and corruption. But the current Finance Minister has still vowed to continue with such distributions to MPs. It will be another serious mistake. 

    Again, we need to spend the budget for large infrastructure projects, which is essential for the country’s development. But there is great hesitancy to invest in such projects. In the last CA election all major parties promised to reduce load-shedding, increase road access to mountain and hilly districts, especially in the Mid-West, provide safe drinking water, among other promises. Since they won elections partly due to such planks, it’s time they delivered. 

    On electricity, we have to realize that only generation of hydroelectricity is meaningless until we have strong transmission highways from remote areas where dams are built to the urban industrial areas. For the construction of such transmission lines that pass through villages and forests, governmental protection is essential for mediation and settlement plans. While constructing such transmission lines we should plan for the next 50 years, for which we need high capacity 400 KV lines. Currently, our transmission lines are mostly 33KV; we even have 11KV lines. From the ongoing Chameliya and Trisuli 3A and 3B projects, we expect an additional 1,650 MW in the near future. 

    According to Nepal Electricity Board, we have short-term projects that are expected to generate 3,271 MW, midterm projects to generate 4,952 MW and long-term projects to generate 22,000 MW. Without powerful transmission lines the power generated from them cannot be properly distributed or exported. For such high capacity lines construction cost will be high. Hence, private-public partnership might be the way to go about it. 

    The government should stop financing run-of-the-river projects and give new licenses only to reservoir projects. We have only a single reservoir project at Kulekhani that generates 92 MW from its two dams. This project has reduced load-shedding by two-four hours in slack winter season. Our mountainous topography gives ample options for easy construction of such reservoirs. 

    The major hurdle on the path of development is lack of road access. Many districts in the Mid-West are not touched by road network. Many of the highly populated villages of Bajhang, Humla, Jumla, Dolpa, Mugu, Bajhang, Kalikot, Dailekh and Jajarkot districts either have no road access or only weather-dependant roads. The same is true of several hilly and mountain settlements of other development regions. If there are proper roads, the government has to worry less about education, health, and income outcomes. 

    Thus, on the eve of the new budget, Nepalis expect the government to lay out a plan for development of roads, reservoir-based hydroelectricity projects and high capacity transmission lines. 

    The author is a 
    VIKASH RAJ SATYAL, professor at the Department of Statistics, Amrit Science Campus vrsatyal@gmail.com