Governments can only spend what they collect from taxes and what they can borrow, both of which come at a cost.
Deputy Prime Minister and Minister for Finance, Professor Biman Prasad, emphasized this in Parliament during his right of reply. He noted that creating a national budget is challenging, particularly when the Government has inherited a significant public debt that limits its ability to address long-neglected infrastructure and public services.
Professor Prasad highlighted that the task is even more difficult when inheriting an economy recovering from a major setback like COVID-19, which requires fiscal support to protect the fragile recovery.
He stressed the importance of Governments utilizing taxpayer resources effectively to achieve the highest returns.
“This involves making tough decisions and policy trade-offs, often choosing what is economically correct and fiscally responsible over short-term political considerations,” he said.
Professor Prasad pointed out that due to the Government’s critical role in providing essential public services, adequate funding is crucial.
“Otherwise, as we have seen over the past years, the Government lacked sufficient funds to fix hospitals, improve roads, address water issues, clean drainage systems, rescue deteriorating public assets, and pay civil servants adequately.”
He added, “In our two budgets, we have ensured that the Government is well-funded, not only to repair public infrastructure and services but also to control fiscal deficits and reduce public debt.”