Spend, Spend, Spend
With the end of the fiscal year around the corner, the government is sitting on a huge pile of cash that was supposed to have been spent on various development activities. This money belongs to the people and must be returned to them. Cash in the hands of the government is sterile. It is good only when it is spent. However, cash in the hands of the people is much more productive.
Failure to spend the resources collected by the government is one of the major reasons why the country’s economic growth rate is estimated to be lower in this year of people’s democracy (loktantra) than in the last year when there was autocratic Royal rule. This has tarnished the image of the government that came to power with such a strong mandate given by the people’s movement.
Blaming the disturbances caused by sundry groups of armed people cannot be a plausible excuse for a government that has been granted a carte blanche by the people’s movement. Yes there were disturbances in some areas. But what about the other areas? The government could easily transfer the budget from one area to another. A government that is allowed to change the Constitution on the slightest pretext at any moment, can also change the Finance Bill by following the same principle of exigency. In fact, the government followed this principle in financing so many non-budgeted expenditures, such as providing money to the ex-Maoist guerillas. But it simply refused to divert some of the budget from projects where the works could not be carried out due to disturbances to the ones where there were no disturbances.
Had this money been spent on any development construction, even though they were not budgeted for, the money would have gone to the poor as experience shows that among the different sectors of the economy, the construction sector is the one where the number of jobs created per million of rupees spent is the highest.
Equally important is the inflationary effect of the budgeted government expenditure. The private sector makes its plans matching the budgeted programmes and expenditure of the government. This fuels inflationary expectation which in normal circumstances gets offset when the government actually spends the budgeted amount and the income multiplier sets in making people actually better off overall. If the government fails to make the budgeted expenditure there will be inflation only. That is exactly what has happened.
Meanwhile, the government should also heed this warning: The proposed salary hike for the civil servants by 20 percent is a futile exercise. It is not sufficient enough to stop the civil servants from indulging in corruption to collect money to meet their minimum basic needs. Neither is it backed up by a plan to reform the civil service. The earlier proposed salary hike of 100 percent is more logical if that is accompanied by an arrangement that makes the civil servants really accountable, fast and professional. If the present government does not have guts to make such arrangements right now, it should have the guts to freeze the salary at the present level. You can't have it both ways.
