The government has said that it will not be able to release salaries of parliamentarians and Maoists combatants after mid-November, if the parliament fails to approve budget for running fiscal year soon.
Finance Minister Surendra Pandey told myrepublica that one-third of the proposed recurrent budget, which the government is authorized to spend until the budget is endorsed by the parliament, is fast depleting due to rise is various unplanned financial liabilities.
The normal activities of parliament has been in stalemate for the last five months, as a result of prolonged political dispute among major political players over the President´s decision to nullify the then government´s decision to sack the then army chief.
The main opposition UCPN (Maoist) that has been obstructing the regular parliamentary business, however, allowed the government to present budget for current fiscal year, totaling Rs 285 billion.
The financial liabilities, particularly under the recurrent head, have increased remarkably after the budget was tabled in the parliament. As a result, available recurrent budget is fast shrinking, Pandey said.
According to informal sources, the total demand for non-budgetary expenditure has touched a record Rs 12 billion within the first three months of the running fiscal year.
As per the Interim Constitution, the government is authorized to spend one-third of the proposed budget once it is tabled in the parliament. This means that the government can spend up to Rs 95 billion before the budget is approved.
"The government is compelled to curtail expenses for headings that absorb huge chunk of expenditure like salaries and allowances for parliamentarians and Maoists combatants," he said.
As per the law, the government can spend up to Rs 53 billion for recurrent expenditures whereas annual salary and allowances of over 400,000 government employees sum up to Rs 60 billion.
Pandey also said that impacts have already started emerging as the government could not clear salaries for a garrison of Nepal Army, which is mainly engaged in support activities for the army personnel, due to lack of adequate funds. The Minister also said he has already informed Maoists leader and former finance minister Dr Baburam Bhattarai about the looming financial impacts of the lingering political deadlock.
Pandey, however, said the expenditure earmarked for development activities have not been affected yet and added that the real expenditure have been less than expected due to various problems.
"As of yet, the government is committed to the funds allocated for development activities. However, if the development activities speed up, the available fund might be used up by end of 2009, he said.
Ministry of Finance has already stopped sanctioning salaries of benefits to the Prime Minister and Ministers.
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