Every year, all finance ministers have the responsibility to meet the unlimited needs of the general public from limited resources in the budget. But with foreign aid declining for a decade, domestic spending increasing, and private sector investment being discouraged, especially after Covid, Finance Minister Swarnim Wagle had to coordinate this. 

There was an opportunity to end the mismatch seen in budget formulation and implementation for at least two decades by managing resources and spending. He missed it. Since the mid-term review will reduce the score again and it will not have much impact other than economic discipline, a debate focused only on this issue may not have much meaning. 

The main topic this time is whether the Gen-G movement, which has made good governance, employment, and self-employment its main demands, and the government formed on its foundation with an unprecedented two-thirds majority, has attempted short, medium, and long-term reforms. 

In a context where the need for a new phase of economic reform has been felt, the government had the basis to immediately make the market dynamic, achieve double-digit economic growth in the medium term, and establish itself as a civilized and high-level developing country by 2040. This is considered the basis because various studies have shown that problems will begin to appear in Nepal's remittance-dependent economy after 2040. 

For that, a program to bring the amount of Rs. 1.3 trillion that has been stuck in the banking sector for about two years to the outside market is urgently needed. The change in income tax rates and the increase in salaries of government and related employees are expected to flow money into the market. The government expects that the increase in the purchasing power of the general public, especially the middle class, will create demand in the market. 

If demand starts to increase as expected by the government, it is necessary to increase production at the same time. Otherwise, the import of foreign goods will increase, leading to an increase in the trade deficit. The budget has not been able to address the challenge of motivating the private sector to invest. 

Investment should be increased by removing the fear seen in the private sector. Entrepreneurs are discouraged due to the arrests being made on the private sector. The budget should have taken parental responsibility and motivated the private sector. 

The government had the opportunity to make the market dynamic, achieve double-digit economic growth and prepare the basis for becoming a developing country by 2040 when new economic reforms were needed. Second, to motivate the youth to invest, a program could have been introduced that would provide facilities such as business registration, cancellation, and tax payment through the Nagarik app. If the issues are not clearly covered in the budget, it will be difficult to implement, so simply mentioning online registration will not be enough. The system of renewal for entrepreneurs who pay taxes regularly could have been removed. The current limit for small entrepreneurs should be increased. Facilities such as concessional entrepreneurial loans could have been provided to the dependent families of youth who send remittances through banking channels while they are still employed, not after returning from foreign employment. These are just a few examples, the main issue is that the program could have been open to the youth in the cycle of business registration, access to credit, market management, and exports. A subsidy that does not cost the government money could also have been provided. 

The incentives and arrangements mentioned in the budget for new entrepreneurs and information technology are indirect. They are unlikely to immediately encourage investment. A clear framework for tax and capital incentives will be needed to attract and guide new entrepreneurs. The budget is silent on the provision of project-based loans. A clear policy will be needed on the sharing of risks arising from it.

The seven percent growth expected by the budget will not be possible with domestic investment alone. In the three decades since Nepal formally opened up to foreign investment, foreign investment has not touched even one percent of the gross domestic product. It is now only 0.2 percent. The provisions made in the budget on registration and refunds will encourage foreigners to inquire about Nepal, but more facilities are needed to bring in investment. Which should be more than India, Bangladesh, Cambodia, and Vietnam. 

There is a lack of new programs in the agriculture and tourism sectors that can immediately increase employment. Efforts have been made to make subsidies for agriculture scientific, but even if the issue of the agricultural ecosystem is included, government incentive plans will be necessary in the cycle from soil testing to exports. 

The issues of hill station construction, sports tourism, and MICE tourism, which can immediately benefit from tourism, have not been concretely included. 

A budget that has touched the middle class but has not been felt by the lower class is not in line with the open economy with social justice that Finance Minister Wagle calls for. If the private sector is not motivated, it will be more difficult to obtain revenue to be spent on social justice. In addition, if the budget, which is in a huge deficit, cannot meet current expenses with revenue as it is now, disappointment will increase next year.