President Bidhya Devi Bhandari presented Nepal government’s annual policy and programmes on 15 May 2020 in front of the combined house of the parliament. Though an annual drill, this year’s policy and programmes were much awaited as it would shed some light into the kind of mechanisms that the government would adopt to combat COVID-19’s risks. Although the present scenario has many challenges, difficult scenarios as such bring an immense potential to disrupt the ongoings and bring about a bold departure in the existing practices. The present scenario was also an opportunity to break the cynical trap that our policymakers have gotten into, along with directing the nation towards a new trajectory.
How does the first glance to this year’s annual policy and programmes look like?
On paper, the policy and programmes look exceptional. However, the implementation is set to be the key challenge. There are lots of positives about the plan, nevertheless, it still lacks the key formula to make it a solution for the current challenge. A longer version this time, the positive part is that the government has clearly mentioned that the nation’s priority is health, education, employment and economic revival. Additionally, they have mentioned that making Nepal a “COVID-19 pandemic free-nation” is the first priority. However, there isn’t a firm plan to address how it will be done, which can become a big issue. Even though there are mentions about the pandemic in a lot of places, the policy and programmes fail to integrate all areas to bring disruptions into conventional policy making, due to which manoeuvring the national economy can become a challenge. The plan looks more like a revised-version of the yearly plans of various ministries and institutions fitted with COVID-19.
The government has also prioritized other areas which have distorted the actual priorities. There is a long list of programs which is sure to bring confusions onto the spotlight and create unnecessary and unrealistic burdens for the budget. While these plans might speak all stakeholder’s voices, it stays away from taking the risk to address the current situation.
Even though the plan is an annual one, there is less differentiation between what is to be done this year and what is to be done in the longer-term. The plan also overlooks the past implementation bottlenecks and aims for high economic growth with the target of “Prosperous Nepal, Happy Nepali”; an area which could have been avoided for this year. Some programs are said to be continuing, which raises questions over their implementation. Programs like establishing information technology lab and adopting high speed internet service in all public secondary schools and campuses just seem unrealistic, that too to be done this year.
Having said all, the plan hasn’t totally disregarded past experiences. Certain things like aiming to make the “Prime Minister Employment Program” more productive is a move that should be welcomed. Along with this, the President’s bold statement mentioning Limpiyadhura, Lipulekh and Kalapani to be a part of Nepal is one that would gain the admiration of all.
What to expect from the budget?
While the policy and programmes lack prioritization, the budget can do more than needed to fulfil the gap. However, since the policy and programmes direct budget making process, the current version of it might be difficult to do justice to. In the current fiscal year, the government had targeted an ambitious growth rate of 8.5%. Ever since the COVID-19 pandemic swept economic activities, things haven’t been looking well. Thus, the Central Bureau of Statistic revised the projections to a mere 2.27%. With a situation as such, the budget has a very big responsibility to help rescue an ailing economy and bring control to the state of disarray.
A valiant approach needs to be taken while making the budget, or else following the same path as the policy and programmes might aggravate the whole situation. The main challenge for the government will become prioritization. Having many programs poses a risk of dilution of priorities, which might spread the budget too thin. Due to this, the necessary areas might not get the required resources.
As there will be a big narrowing of the government’s revenues, generating enough resources to keep the policy and programmes going will be a big challenge. With the enlisted programs in the government’s document, the budget size becomes a big concern as a bigger budget might just be elusive. As the COVID-19 pandemic is a global issue, the grants that Nepal used to get might dry up as our bilateral partners are facing problems with their economies as well. The other option that we have will be to go for foreign loans.
The government, in their plan, has mentioned that internal revenue will be the main source for public resources, which I find to be concerning. As internal revenue is generally collected from taxes, there might be a possibility of overburdening citizens and businesses with higher taxes. If this is done than this might work backwards and depress the citizens and businesses. The plan also mentions about attracting additional foreign investment in large infrastructural projects and productive areas. Keeping in mind our track record, aiming to attract foreign investments during the current pandemic might make for an unrealistic ambition.
What needs to be done and the way forward
With narrowing resources, the government needs to adopt austerity. The current pandemic has created a great opportunity for the government to take unpopular decisions to cut down several unnecessary costs, wasteful expenditures and downsize various government institutions, which they would not have been able to do in a normal situation. Being ambivalent with regards to the current situation is normal, however, bold departures are to be made from conventional policy making.
The government needs to allocate greater resources for sectors which pose greater risks to the COVID-19. Sectors like health and agriculture along with various industries need to be supported. The government also needs to bring a halt to programs which cannot be completed this year, and focus on programs that can be completed. There are several projects in the pipeline such as the Upper Tamakoshi Hydro Power project, Melamchi Drinking Water project, and Bhairahawa International Airport project which have gone on for a very long time. These projects need to be emphasized and completed. Once they start running, they can generate additional revenue for the government. The budget needs to prioritize, and health, education, agriculture and employment should be at the heart of the prioritization.
Furthermore, the government should keep the people at the heart of their planning. The Government’s plan should speak for all the people of Nepal, including the people outside Nepal for foreign employment and people stuck at border points. Over 500,000 Nepalis want to return to Nepal amidst the COVID-19 pandemic[i]. As they return, they’ll require employment. While the government has mentioned to make agriculture and agricultural entrepreneurship business as the main area of employment, everyone might not be up for it. So, all of it needs to be looked at from different dimensions and the government must be wary about anything that is possible.
[i] Mahara, Jayasingh. “The number of Nepalis who want to come from abroad reaches 5 lakh 88 thousand.” ekantipur, 11 May, 2020. Retrieved from ekantipur: https://ekantipur.com/news/2020/05/11/158920882052283964.html
This article is based on the Government’s Policy and Programmes for FY 2020/21.
Ishan Bista is an MPA candidate with a concentration in Economic and Financial Policy at Cornell University. He previously graduated with a BBA degree from Kathmandu College of Management, Siam University with a major in Marketing and Branding. His keen interest and aspirations lie in the area of public policy and economics. He previously worked as a research fellow for Nepal Economic Forum.