A Rapid Assessment of National Budget 2014-15
The current budget is tabled against the backdrop of three major economic challenges – decelerated economic growth due to stagnant investment, consumption financing fiscal deficit failing to augment the multiplier effect to overcome supply side constraints like inadequate infrastructure and decelerated increase in social sector spending – amidst raging strife between the ruling party and the parties in opposition.
The seeds of the present challenges have been palpable and have been articulated in a number of publications of Unnayan Onneshan (UO). More specifically, the organisation’s pre-budget annual publication on the state of economy in Fiscal Year (FY) 2013-14 clearly identified the reasons for fall in Gross Domestic Product (GDP) below the average rate of the last decade (Unnayan Onneshan 2014). The old problems have also remained unabated over the years, while new ones have been added as time elapsed. In the post-budget assessment of FY 2013-14, the issues of decelerated growth, squeezed investment due to fiscal composition and deficit financing, and implications of contractionary monetary policy have also been warned.