July 16: Newly appointed finance minister Janardan Sharma is surrounded by many challenges as he assumes office.

The first problem for the finance minister is to finalize whether to continue the budget brought through an ordinance or to introduce a new budget. Similarly, he is responsible to ensure vaccination to all the citizens, increase capital expenditure, and provide relief to the citizens and businesses affected by the pandemic.

The former government led by KP Sharma Oli had introduced the budget through an ordinance after dissolving the parliament on May 22.

Constitutionally, the ordinance must be tabled and passed by the parliament within 60 days of house session. However, as the Supreme Court has questioned the legitimacy of the budget brought through the ordinance, the newly formed government does not seem willing to implement this budget. Even if this budget ordinance is tabled in the parliament, there is no convincing basis for passing it as the current government does not have a clear majority.

There is a strong possibility of it being scrapped. In this case, the government can bring a new supplementary budget. However, it is uncertain whether the parliament will pass such a new budget. As the main opposition party is stronger than the ruling coalition, the budget is likely to be opposed. There is a danger that the current government will find it difficult to pass the budget. It will be difficult for Finance Minister Sharma to keep the economy on track.

But economists and former finance ministers say a strong consensus is needed to overcome all these challenges.

According to analysts, the economic growth rate which contracted by 2.21 percent last year due to the Covid-19 epidemic is likely to remain around zero percent in the current fiscal year. Therefore, this government should prudently take appropriate steps to save the present economy and the lives of the citizens based on party consensus.

According to Bishwambher Pyakuryal, the pandemic has crippled the country's economy, prompting Finance Minister Sharma to issue a white paper on the state of the country's recent economy.

"As the previous government brought a large and populist budget, this budget should not be implemented as it is," he said.

Pyakurel said that the newly-appointed finance minister should rewrite the budget by re-prioritizing the situation by issuing a white paper. Pyakurel said that the government's plans and policies should be taken forward based on consensus after reaching a comprehensive understanding among the ruling parties.

He suggested the government increase the expenditure in the productive sector by minimizing the expenditure in the unproductive areas.

According to him, the NRB should not bring monetary policy based on the budget brought by the previous government. "If the monetary policy is introduced based on the current budget, the country will be in a big crisis," Pyakurel said.

Former Finance Minister Dr. Ram Sharan Mahat also suggests not to implement the budget as the previous government brought the budget by violating the rules. He argues that the new government should work on a new budget as the Supreme Court has already declared the budget brought by the Oli government through an ordinance as illegal. He said that he was confident the government would introduce a new budget.