Delayed budget puts Nepal on brink of financial crisis: Officials

Last Updated: Friday, October 29, 2010 - 00:01

Kathmandu: Nepal`s constitutional deadlock has delayed the annual budget and put the country on the brink of a financial crisis, officials said Thursday.

Nearly four months after the 22-party coalition led by Prime Minister Madhav Kumar Nepal collapsed, 13 rounds of elections in Parliament have so far failed to elect a new leader.

The annual budget, which was supposed to be endorsed by 601-member Constituent Assembly in mid-July, has been delayed due to the political stalemate over the election of a prime minister.

The Parliament approved an interim budget to allow the caretaker government to run day-to-day activities for four months and pay civil servants, but that expires on November 16.

The finance ministry officials have warned that the country would face a severe financial crisis if the budget is not passed in the next three weeks.

According to the ministry, the budget currently available in state coffers is not sufficient even for the essential services until mid-November, myrepublic online, the website of the Republica newspaper, reported Thursday.

In a desperate effort to prevent the looming financial crisis, House Speaker Subash Nembang has asked the deadlocked political parties to take initiatives to prevent the country from sliding into a financial crisis.

"Parties are yet to hold serious talks to endorse the budget, though we are running out of time," Nembang was quoted as saying in the report.

Even as there is an agreement in principle that the caretaker government should not table the budget, presently there is little possibility of new government in the near future.

Nepalese parties have been unable to elect a new leader despite a series of polls since June 30, when Nepal stood down under intense pressure from the Maoists.

According to sources, Maoists exhibited flexibility on the budget issue and said they were ready to hold talks with the ruling parties to sort out the issues.

But the Maoist party has now toughened its stance after the government stated that it would also table its programmes and polices along with the budget, the report said.

"This is a caretaker government and it doesn?t have any right to table the budget with programs and policies,? underlined Maoist Spokesperson Dinanath Sharma.

According to sources, Prime Minister Nepal told the Speaker that the government wants to table programmes and policies along with the budget, and that has complicated the matter.

In the event of the budget being further delayed beyond mid-November, the government will run out of money, unable to pay police and school teachers and forcing hospitals to close, sources warned. It could also impact the running of Nepal`s diplomatic missions abroad.

On Tuesday, for an unprecedented 13th time in a row Nepali Congress leader Ram Chandra Poudyal, the sole candidate for the post of prime minister, was unable to garner a majority support.

Political analysts have warned that a delay in forming a new government could also derail the 2006 peace process.

"There will be chaos. All the government`s plans and policies will be affected," an expert said.

PTI



First Published: Friday, October 29, 2010 - 00:01

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