Finance Minister Janardan Sharma on Tuesday said that there would be an amendment to the budget presented by the previous KP Sharma Oli government for the current fiscal year 2021-22. The Oli government had introduced the budget on May 29 through an ordinance since the House of Representatives had been dissolved on May 21.

While presenting a white paper titled ‘Information on Current Economic Situation of Nepal’ on the state of the economy at the House of Representatives, Sharma said that he would table a replacement bill based on the common minimum programme of the ruling parties, the policies and priorities of the current government.

“We will introduce some necessary measures to address the challenges caused by the Covid-19 pandemic,” said Sharma.

The confusion over whether the Sher Bahadur Deuba government, formed on July 13, would continue with the budget introduced by the Oli government or it would bring a new one has been cleared now.

The ordinance was presented at the House on July 18, the day the first meeting of the House was convened after it was restored by the Supreme Court on July 12.

As per Clause 98 of the House of Representatives Regulations, a replacement bill can be tabled at the House with the same provision of the ordinance or amended provisions.

Roj Nath Pande, spokesperson for the Federal Parliament Secretariat, said as per the regulations, a replacement bill could be introduced with the same or amended provisions.

Experts say it was expected that the Deuba government would revise the budget, as it would not have continued with the one presented by the Oli government with so many programmes suiting the CPN-UML. Also, according to experts, the size of the budget presented by then finance minister Bishnu Paudel was too big.

“The budget size needs to be reduced so that the revenue would be enough to sustain the recurrent expenditure,” said Rameshore Khanal, a former finance secretary. “With the country set to be hit by the third Covid-19 wave, I don’t see an environment for spending the large amount of the capital budget.”

In the white paper, Minister Sharma says that the federal government collected Rs829 billion in revenues in 2020-21 which is not sufficient even to meet the recurrent expenditure.

Through the replacement bill, according to Khanal, the government should reduce the budget size so that revenue could meet at least the recurrent expenditure.

Khanal said that funds allocated for underprepared projects, which were included in the budget eying the elections, also need to be removed.

“As capital-generating economic activities are unlikely to take off amid pandemic, the size of internal loans should also be reduced,” said Khanal. Internal loans are usually raised to invest in capital-generating economic activities.

The budget introduced by the Oli government has sought to raise Rs250 billion in internal loans.

Amid strong protests from the opposition parties, the erstwhile Oli government had introduced a Rs1.64 trillion budget through an ordinance.

The budget had also faced criticism for its excessive focus on attracting voters, as the Oli government had announced elections for November.

Even the Supreme Court observed that the presentation of the budget by the Oli government after dissolving the House was inappropriate and against the representative governance system.

“It is not appropriate to dissolve the House just a week ahead of the date of budget presentation and to introduce policies and annual programmes by a caretaker government instead of introducing expenditure arrangements for just compulsory liabilities of the government,” said the court.

“If such non-parliamentary practices are continued, they lead to the tendency of avoiding Parliament, devaluing constitutional provisions and exercising discretionary powers.”

Many may agree that the budget needs to be revised, but questions have been raised about the need of the white paper presented by Sharma, the finance minister of the Deuba government.

Sharma’s white paper comes just two and a half months after the previous government unveiled the status of the country’s economy through the Economic Survey-2020-21.

The white paper is loaded with data, mostly attempting to vilify the Oli government. It carries economic data since the fiscal year 2017-18 when the Oli-led government was formed.

Sharma has tried to present a bleak picture of the economy during Oli’s reign, saying how the economic situation deteriorated ever since Oli came to power in February 2018.

One example is the gross saving of the country against the gross domestic product (GDP). The white paper says gross saving of the country against the GDP came down to 6.6 percent in 2020-21 from 13 percent in 2017-18.

Likewise, the white paper says the country’s economic foundation has remained weak due to limited contribution of the industrial sector (manufacturing) in the GDP despite the sector being the key engine of economic prosperity.

“Currently, the contribution of the industrial sector to the GDP stands at 5.1 percent,” said Sharma. “This indicates that the economic foundation of the country is weak.”

The white paper, however, fails to mention the contribution of the manufacturing sector before the Oli government was formed. The contribution of the sector to the economy, as a matter of fact, has remained more or less the same over the last decade.

Pushpa Raj Kadel, former vice-chairperson of the National Planning Commission under the Oli government, accused Finance Minister Sharma of picking data selectively to discredit the Oli government.

“In order to support its narrative, the white paper has incorporated the data of fiscal year 2000-01 regarding the trade deficit,” he said.

As per the white paper, the ratio of export and import that year was 48 percent, which came down to 9.2 percent in the last fiscal year 2020-21.

Experts, however, say the trend of discrediting others started when Oli was in power.

After the formation of the Oli government in February 2018, Yubaraj Khatiwada, then finance minister, had presented his white paper.

Khatiwada had said the economy during the previous government, led by Deuba, was in a shambles. He had blamed the Deuba government for fiscal indiscipline, leaving the state coffers “virtually empty”.

“The government’s budget balance saw a deficit of Rs200 billion this fiscal year and there is no clear source of financing development projects,” Khatiwada had said. “This is because the Sher Bahadur Deuba-led government failed to maintain fiscal and financial discipline.”

On Tuesday, Sharma followed suit. Through his white paper, he blamed the Oli government for leaving the economy in disarray.

Stating that when Khatiwada presented the white paper, the country was facing a cumulative budget deficit of Rs48 billion, Sharma said the deficit reached Rs216 billion as of fiscal year 2019-20 when Oli was in power.

“Despite expected savings of Rs73 billion in the last fiscal year 2020-21, the country will see a budget deficit of Rs143 billion,” said Sharma.

According to Khanal, the former finance secretary, that the budget size needs to be reduced is a given but there was no need to come up with the white paper.

“The Economic Survey has presented a clear picture of the country’s economic situation,” said Khanal. “This is just continuing with the bad tradition of discrediting other governments.”