Call for timely publication of Pre Budget Statement

Freedom Forum – an organization pitching for budget transparency and accountability in Nepal – has called for the government to timely publish the pre-budget statement and allow the environment for wider public debate on the key budget document.

In a memorandum handed to Finance Minister Dr Prakash Sharan Mahat recently, the organization asked the government to open up avenues for public and parliamentary debate on budget formulation by introducing pre-budget statements.

The Constitution has mandated the government to unveil the budget proposal in the federal parliament of Nepal on May 29 (Jestha 15). According to the international best practice and standards, the pre-budget statement should be produced and made publicly available at least a month before presentation of the budget at parliament.

Pre Budget Statement is a key budget document that the government is required to produce in the formative stage of the budget formulation process every year.

Main objectives of the publication of and discussion on the pre-budget statement are to make the government’s economic policy all-acceptable to the larger possible extent, create an environment for the parliament as the apex body for enacting budget and general public to provide meaningful inputs and deliberations in course of budget formulation process and promote participatory budget making practice.

"Timely bringing pre-budget statement and holding wider multi-stakeholders' debate on budget principles and priorities based on PBS is likely to be missing this year", Forum's Executive Chief Taranath Dahal said, adding, "It is crucial because pre-budget statement is an entry point for citizen engagement in budget process".

It may be noted that the Constitution and Fiscal Procedure and Financial Accountability Act-2076 BS have provided adequate spaces for promoting citizen engagement in fiscal governance, including public financial management.

"There has been a practice of presenting budget principles and priorities as a PBS in the parliament some weeks before the executive budget proposal is unveiled. Nevertheless, the pre-budget statement has not reflected government’s fiscal goal and source of revenue for attaining targets, strategies, economic indicators, summary of current fiscal year’s revenue and expenditure, key changes in budget priorities and its impacts on economy with data – the key features to determine budget principles and priorities", the memorandum mentioned.

It is noted that discussion on budget principles and priorities based on pre-budget statements lacking such features would in no way promote fiscal governance and parliamentary oversight and citizen engagement in the budget process.

According to the studies carried out by credible international organizations, including International Budget Partnership (IBP), one of the reasons behind weak budget transparency in Nepal was – lack of practice to timely produce and publish pre-budget statements.

The pre-budget discussion and consultation merely based on political documents without data and facts do not arguably impact budget and overall fiscal policy, the memorandum stated.