The Maoist Budget of Rs 236 Billion: Bold but Not Beautiful

In their first ever budget speech, the Maoists promise to build the infrastructures and propel the economic growth that they mercilessly destroyed and pushed back in the name of revolution during the decade-long insurgency

By Prem Khanal
the Kathmandu Post

The first fiscal-year budget of the Democratic Republic of Nepal unveiled yesterday by the Maoists-led government was extraordinarily ambitious both in mobilization of resources and in expenditures.

The budget for fiscal year 2008/09, which vows to start building a solid platform for putting the economy onto a double-digit growth track in two years, proposes to spend Rs 236 billion – almost Rs 647 million per day. However, experts say that the budget, which plans to raise expenditure by 45 percent in a single year, lacks concrete plans for improving the poor capacity for implementation of development projects, a key factor in the low absorption of allocated budgetary amounts.

Similar is the story on the resource mobilization front. The budget plans to raise the revenue growth rate to 32 percent from last year’s 21 percent and mobilize Rs 141.7 billion. According to a highly placed government source, the premise of the targeted growth is that a massive soon-to-be-launched campaign to plug existing revenue leakages will be fruitful. The budget has also proposed to restrict the sale of liquor from ordinary groceries and has fixed sales hours and age limits for consumers.

Presenting the budget for fiscal year 2008/09, Finance Minister Dr. Baburam Bhattarai, whose party has a revolutionary history, offered a number of new grassroots-centric programmes, probably to reward core supporters who voted the Maoists to power. These programmes prompt public-private partnership for large projects and cooperatives for rural projects.

“At a time when there is an urgent need to lure huge investments from the private sector; the budget seems more inclined towards government agencies and cooperatives,” said Binod Kumar Choudhary, president of the Confederation of Nepalese Industries.

The budget has proposed to constitute Local Literacy Volunteers in each ward of each Village Development Committees through the recruitment of a total of 35,000 youths, and the cost of the program has been estimated at one billion rupees.

In an indication of a reversal of the country’s long-running privatization policy, the budget has allocated Rs 300 million to bring closed state-owned enterprises back into operation under public-private partnership. In order to ensure a conducive industrial environment, the budget has also assured uninterrupted power supply to the industrial sector, but remains silent on how such arrangements are to be implemented.

The budget also proposed to raise the monthly salaries of government employees by a flat amount of Rs 2,000, much less than what the employees have demanded.

In line with the country’s desperate need to establish road connectivity with the rural sector and kick-start development there, the budget has announced a whopping 77 percent increment in investment in the transport sector to almost 14 billion rupees. However, there is huge mismatch between the nature of the projects and the budgets allocated. For instance the budget has allocated just Rs 150 million for the construction of an east-west electric railway in the Terai. Similarly, the earmarking of Rs 125 million for construction of north-south highways is another example.

The budget has also proposed to provide a bank guarantee for the purchase of two large aircraft for ailing Nepal Airlines Corporation, something that has long been demanded by tourism entrepreneurs.

The establishment of a high-level power sector development board under the chairmanship of the prime minister to achieve the Maoist target of producing 10,000 MW of hydropower in the next 10 years is another feature of the budget.

With Rs 38.98 billion earmarked for it, the education sector continues to be the largest absorber of budgetary resources. Free of cost education up to grade 8, gradual reduction and eventual phasing out of tuition fees for grades 8 to 10 to, and launching of a national campaign for the promotion of vocational education are some of the major programs of the budget.

Likewise, the health budget has also witnessed an impressive rise of 54 percent to Rs 15.5 billion while the budget for the drinking water sector also increased, to Rs 7.96 billion.

In order to promote self-employment among youths, a fund of Rs 500 million has been created along with other arrangements, and non-collateral loans of up to Rs 200,000 at concession rates have been provided for. The budget includes a range of measures against bank defaulters and also vows to take action against those who have defaulted bank loans amounting to less than Rs 500 million.

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28 thoughts on “The Maoist Budget of Rs 236 Billion: Bold but Not Beautiful”

  1. we are in great path of following Zimbawe. This fucking budget is nothing but hollow promises. this will create only inflation. And this bahunist FM has no money for culture of Newars which has been followed since time immeroial ? this is cultural genorcide of Newars. This is the beginning of the end of this terrorist government which is led by fucking bahuns. We will fight and destroy this government. nobody rules nepal without ruling Kathmandu. Newars must unite and fight againts these fucking government but first we must start with eliminating collaborator of this government from our own communit.

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  2. Budget is beautiful but challenging.mark departing the old traditonal budget.catchy and populist slogan. lets see.donot critics at the moment. it tooks a time to implement.let it be successful.i hope Dr.Bhattarai is successful in increaing the national economy and economic growth.

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  3. do have not gone through the whole budget …………. ………….. so i would not be able to comment…………… ………………but still think it is not much different from previous………………………. ………………… …………………

    there are some danger sign in this budget just like maoist party…………… like they have used new terms for the past terms like they have changed “develop your own village” ……………… looks like they want to hijack people, or just opportunist…………….. ………….. there is a huge increment in education……………… they better invest most of that education budget to practical/technical education……………………………………….. ………….and why are they imposing task to all private schools. ……….. it would have been better if they have imposed different tax to different fee structure like 10% to 1500-2500 fee , 45% to above 2500 per month……………. ………………. …. not all parents sending to private are rich…. ………………

    last time the govt. asked for public advice for budget but this time they didnot why……………. ……….. govt. has power so utilize in a right way……. like democratically controlling and directing the private investment to certain feasible industries………………… ……………. what is govt. trying to do by trying to make nepal independent in evey industry………. it is not possble and if try to do so billions of investment will be wasted………. so invest heavely in those industries where nepal can compete with the world……… ……………………………………………………………….
    to develop far west invest in infrastructure that would help in tourism, fruits, herbs etc……….. may be govt. should select few districts and invest…………….. …………. to develop tourism in far west, national parks in terai, janakpur……… give allounce to govt. official about 20000 in evey five years to visit those places as tourist…….. they should show VAT bill etc…………………….. .do something…………………………….. even if maoist are the wrong outfit to run govt. ………..we can not waste 2 and a half years…………….. do something………………….. what ever you do. do it for longerterm….. do not invest just to show………. like kaamchalou kam………. if you want to develop roads make 3/4lane at least. not one lane…… if you want to build school invest crores not lakhs.

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  4. At this point of time I dont comment on this budget. But one thing it has done is———— left some hope for poor Nepali to think about future.. In the past budget used to be too much stereotype. As a result of which people had no hope on government. The result of which was the success of Maoist itself…

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  5. Its too much ambitious.. In the past the biggest problem of planners used to be—- how to spend the budgeted amount.. Now its up to Mr. Bhattarai how he is going to make this budget work…. All the economists seems to be quite spectacle regarding this budget. Now he have to prove them all wrong………………..

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  6. Both Baburam and the President are only there for Peace.
    Paying the conflicting parties off and doing what any government would or could have done with the HYPE of NEW….
    There is nothing new about nothing so far. Country is recovering from a much more longer than 10 years civil war very uncivilized war and results of the most incredible solutions will not help destroyed families ever forget their pains and suffering. Twenty years at least for real healing. Baburam and Prachandra are agents of peace and reconstruction in a resentful environment of very very poor people. Money from Saoudi Arabia is not going to return dignity . It is a bit like Germany they were unable to mourn. Until the dead are collectively mourned there is no healing. That is according to me why all are crazy about money. Money cannot compensate stolen identity and disturbed, destroyed lives.
    A maoist government with the best solutions will not be loved by the victims of maoism. This is good for democracy but if it is good for Nepal?

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  7. Ambitious…no big changes to the poor…no guarantee of job and enterprise building model developed… totally ignoring the future concept of federal system…

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  8. We will start to see the ill effect of this budget by next year. Everything will be expensive and our money will be worth less than toilet paper which will make it useful to wipe out our ass and flush it than to buy toilet paper. What is our stupid econmist thinking ? there is no way any plan is going to be implemented and only aim or this budget is to fiannce YCL by giving them contracts on local level. there is nothing new for people only sorrow and misery. Just wait year to see my prediction coming true. Yes, in way Terrorist Baburam may be right we might be jumping like Kangaroo because of pain in our ass by not having enough food and job. HA HA HA !!!!!!!

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  9. newars made a fuss they got on bbc. This is bad policies all street gangs go for cultural nonsens like toruturing animals calling it sacrifice. Newars are buddhist how can they kill?
    Giving in to pressure is not the way.
    that is the root of all problems in nepal that is how military overtook that is how the war became that is how we are all penniless because of bad behaviour extortion and pressures go burn tyres and shoot all again today? How Nepal can be a good place and how to rid of this government as soon as possible.

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  10. Alu Bhanta,

    Too much money flow in the market… No significant improvement in production… No work…………….. These all lead to inflation (may be hyperinflation).

    Anarchy.

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  11. When the roman empire went down they were also fond of Festivals and Circuses. Games, like marx said religion is opium to the people. Sex or football anything to deviate the attention from what is going on an organized chaos.

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  12. this is just bakamfuse guff of the maoists. there is no solid ground to prove their projected target. jungle bata aayeka aba jungli byabahar (features) haru bhayeka haru.

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  13. this is just bakamfuse guff of the maoists. there is no solid ground to prove their projected target. jungle bata aayeka aba jungli byabahar (features) haru bhayeka haru.

    their first form of reform can be seen through the indrajatra festival where they have cut the budget of the festival. how have they projected the future of nepal?

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  14. this is just bakamfuse guff of the maoists. there is no solid ground to prove their projected target. jungle bata aayeka aba jungli byabahar (features) haru bhayeka haru.

    their first form of reform can be seen through the indrajatra festival where they have cut the budget of the festival. how have they projected the future of nepal?

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  15. these terroist did not have any budget for jatra .which we are celebrating for 300 yrs.they still have terroist think in their mind.nepal is democratic country we can,t bear these basterd any more.we will eliminate these maiost soon.

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  16. I read the budget. It is quite ambious. It tried to distribute the resources in all sectors in the economy.

    This is the first budget after the abolition of the monarchy. In the last Congress lead Government also the budget had allocated in all sector. However, due to overhead cost expending in army and police the whole development budget was moved to unproductive sector and so the country could not progress.

    In my view the army strength must come down less than 15,000. This time the strength of the army is more than 100,000. Army and police strength must come down. Unlelss the Government does not decrease in the strength of the forces, it would not possible to develop the economy of the country.

    I am very much positive of the budget.

    In the Congress all the party leaders were rich after assuming the power. The CPN/UML party leaders also all rich after coming in power.

    The people have to see if the leaders of the party remains poor or in the same economy position then I have a firm belive that the country would change its face. But if the leaders built houses or accumulate the wealth or if the leaders ill and goes for treatment in foreign country then the economy of the country will collapse. The people has to see the behavour of the Maoist leaders.

    before assuming the state power more than 15,000 people were killed in the state civil war. The leaders must think that the power houses were finished now because of their blood in the conflicts. In any aspect the leaders must think the value of their blood who were killed in the state fighting. Then country can develop.

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  17. this budget makes new things like address clearly to make 10000 mega watt hidro power projects in 10 years ,has short mid and long time vision but it gives panic to nepali investers raising capital gain tax from 10 to 15 % which is not good move to child capital market.has well vision on infrasture development roads construction and constructing another air port and survaying east west train first than othere expenditure..and also gives emphasis on the
    Karnali which is good side of ..

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  18. Just a thought that came into my mind and FYI this is not my idea but Dr. Bhattarai himself who said this while answering question about his highly ambitious Budget.

    “Dr. Bhattarai answered the criticism of his high budget this year as being necessary. He stated, “I know the budget is ambitious. But people also thought that bringing down the Monarchy was ambitious. People said it was a dream. But we accomplished it in twelve years. So, it is fine if my budget is ambitious. There will be no development without ambition.””

    So may be there is something that we are not seeing here as, I could not agree less with Dr Bhattarai.
    And if some one had said, that there would be no Monarchy in Nepal and Paras would be living an Exhile life in Singapore a year ago I would have laughed flat right out. So who knows may be his ambitious plan does work out and we will have 10000 MW of Hydro Power in next decade or so. We blog freely at blog.nayanepalnews.com

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