Himal Press 
KATHMANDU: Stakeholders have said that the weak implementation of the annual budget has demoralized the private sector and negatively impacted the national economy.
Speaking at a public-private dialogue on ‘Budget and Industrial Development’ organized by the Confederation of Nepalese Industries (CNI) in collaboration with the Society of Economic Journalists-Nepal (SEJON) on Friday, they said that the failure to implement ambitious plans outlined in the budget on time has led to reduced capital expenditure, obstacles in industrial expansion and limited success in job creation.
Dr Prakash Kumar Shrestha, a member of the National Planning Commission (NPC), said the structure and administrative capacity for budget implementation are extremely weak. “Our institutions are very fragile. Even looking at the NPC, its scope, role and structure have been shrinking,” he said. “Institutional capacity is essential for development, and we are weak in this area.”
Pointing out issues with human resources, Shrestha said that frequent transfers have hindered the capacity development of employees as well as decision-making abilities.
Likewise, CNI President Rajesh Kumar Agrawal said that although budgets has set ambitious targets, the implementation aspect has remained weak. “We have all experienced that budgets set significant goals but fall short in execution,” he said, adding that effective budget implementation is crucial for increasing capital expenditure, driving policy reforms and making a positive impact on the economy.
Krishna Bahadur Raut, secretary of the Ministry of Industry, Commerce and Supplies, however, claimed that political changes do not affect budget implementation. He added that the government has made significant legal and policy reforms to foster an investment and business-friendly environment. Raut added that amendments to laws related to intellectual property and mining are in progress.
Former Secretary Krishna Gyawali said budget implementation has always remained problematic in Nepal. “Weak coordination between agencies and different government tiers has affected budget execution,” he said
Also speaking on the occasion, SEJON President Sujan Oli presented the status of budget implementation for the second quarter of the current fiscal year. “The lack of full ownership of the budget after changes in government appears to have affected implementation,” he said. “Of the 63 points related to the economic sector, only 12.7% have been fully implemented by the second quarter, while 27% remain completely unimplemented.”
