There is nothing wrong with having big ambitions, especially for a government with an unprecedented mandate. Yet in order to be credible in the public eye, such high ambitions have to be tempered by a healthy dose of realism. The government’s national goals must also be equitable. On Friday, Finance Minister Swarnim Wagle unveiled a budget of Rs2.12 trillion—the biggest in the country’s history. In doing so, he ignored the suggestion of the National Planning Commission that the annual outlay be under Rs1.89 trillion, given the country’s resource constraints and the state’s old inability to spend. The Balendra Shah government, nonetheless, brought a bloated budget that by and large catered to the middle class—in a move some opposition political leaders termed ‘vote-bank politics’. The income of civil servants has gone up by as much as 21 percent. Taxes on individual annual incomes of up to Rs1 million have been capped at 1 percent. While these measures will bring cheer to the middle class, they will only add to the financial burdens of those in the lower rungs of the income ladder. These groups will see little or no benefit from tax reductions while they will have to bear the disproportionate hike in prices of daily essentials, house rent and travel—all expected after the hike in salary of civil servants.

The government seems to have given little consideration to the concerns of the poor. For instance, the surcharge on the use of electricity above 50 units will hit the farmers around the country who increasingly rely on electric pumps and farm equipment. In another sign, the government says it will aim for 7 percent annual growth while trying to limit inflation to 6 percent. As the current average annual inflation is only around 3.5 percent, the government seemingly expects goods prices to go up as a result of its new financial outlay—and is okay with it. The business sector seems happier. Excise duties have been waived off on 360 import items, and other taxes have been consolidated. Yet these pro-business policies will only bear fruit if Nepal can boost its industrial capacity and its goods are competitive with those produced by neighbouring countries. Otherwise, the waiving of excise duties will only boost imports, further widening the trade deficit. It will hamper job creation in the country as well.

A budget is also a political document that hews closely to the beliefs of those running the government even as it tries to accommodate the concerns of a wide section of society—and thus there is no such thing as a perfect budget. Moreover, the new budget has some laudable provisions, for instance on allowing more foreign investment in IT and on the establishment of a fintech marketplace, both vital measures to give impetus to the flagging economy. The business sector, which creates over 80 percent of all jobs, seems buoyed. Yet there will also be a question mark over why the lowest rungs of society have been so blatantly overlooked.