Nepal could witness serious financial ramifications after its Parliament failed to approve its annual budget within the scheduled date.
Finance minister Janardan Sharma confirmed to reporters that the government would not be able to spend for a few days due to the fact that the appropriation bill tabled in the Parliament couldn't be passed on time.
But before we examine the possible consequences, let's first examine what it is and why this happened:
What is a Budget Holiday?
Budget Holiday means the Government of Nepal is unable to spend from the State treasury. This is probably the first time in Nepal that government expenditures are likely to be suspended. In the economic term, the condition is described as 'Budget Holiday'.
Why did this happen? In short: Politics.
The long answer? The former government led by CPN (UML) on 29 May had brought ordinance Budget for the current fiscal year and it was presented in the federal parliament on 19 July.
As per the provision, an ordinance has to be passed within 60 days. On the same basis, the Appropriation Bill should have been passed by Wednesday.
However, the UML led by KP Sharma Oli was ousted after the country's Supreme Court on 12 July ordered that Sher Bahadur Deuba be appointed president. Now, the UML, which is in the main Opposition, is refusing to endorse the Bill and has been obstructing the House since its commencement on 8 September.
The government had brought a Bill to replace the ordinance Budget on 10 September amidst protest from the Opposition. Though Speaker Sapkota on Monday organised an all-party (those in the HoR) meeting on Monday in a bid to patch up the issue, the meeting was inconclusive as the UML did not turn up.
So, what happens next?
It's a wait-and-watch approach. The next meeting of the House of Representatives has been scheduled for 20 September.
What did the finance minister say?
Informing about the possibility of a 'budget holiday', the finance minister said the budget would be passed through due parliamentary procedures. He said there would be no hurdles in the collection of revenue and it would go regularly.
"Though the government may not be able to spend for some days, the Appropriation Bill would be endorsed through a regular process," Janardan Sharma, the finance minister said.
With inputs from ANI