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The government can only spend by taxing and borrowing, neither of which is cheap.
Underscoring this point while exercising his right of reply in Parliament, Deputy Prime Minister and Finance Minister Professor Biman Prasad said formulating the national budget was not an easy task, especially when the government had inherited a huge public debt, which limited its ability to repair infrastructure and public services that had been neglected for years.
“It becomes much more difficult if you inherit an economy that is recovering from a major economic setback like COVID-19 and you need fiscal support to protect that fragile recovery,” he said.
He said it was therefore important that the government make the best use of taxpayers’ resources to get the highest return.
“It involves making tough decisions and policy trade-offs, most of the time choosing what is economically correct and fiscally responsible rather than for short-term political survival.”
Professor Prasad said it was important to adequately fund the government given its important role in providing basic public services.
“Otherwise, what we have seen over the past many years is that there is not enough money from government to repair our hospitals, improve our roads, fix our water supply, clean up our drainage systems, save our deteriorating public assets and pay our public servants well.”
“That is what we have done in both budgets. We have ensured that the government is adequately funded not only to repair public infrastructure and services but also to control the fiscal deficit and put public debt on a downward trend.”
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