A proposal by the finance minister, Bharat Mohan Adhikari, to present a full budget for fiscal year 2011/12 (July 16th-July 15th) to the constituent assembly in early May has been criticised by the UCPN (M). Previous proposals, supported by the Maoists, for a supplementary budget had been opposed by the main opposition party, the NC. Despite criticism from his party's coalition partner, and the fact that budgets are usually announced in June, Mr Adhikari said in early April that he would present a full budget on May 3rd. Whenever the next budget is presented-the UCPN (M) continues to oppose the earlier date on the grounds that the coalition has yet to agree a common programme of policies-the government must get a grip on fiscal policy. As a result of the political paralysis that beset the country after June 2010, the president, Ram Baran Yadav, enacted the budget for 2010/11 five months late, in November 2010-and then too without the assent of the legislature. Government ministries have faced considerable uncertainty owing to the fiscal confusion.

There has, however, been some sign of an improvement in the fiscal position in the past year or so. Including foreign grants, the government recorded a budget surplus of NRs12.3bn in the first seven months of 2010/11, compared with a surplus of NRs8.4bn in the year-earlier period. There was some improvement in revenue, with the government's four main sources of tax revenue all posting strong growth. Receipts from value-added tax (VAT) were up by 18.6% year on year, at NRs34.7bn. Income tax receipts stood at NRs21.2bn, representing a rise of 28%, while customs and excise receipts were up by 7.8% (to NRs20.7bn) and 17% (to NRs15.1bn) respectively. But the budget surplus also reflected underspending by official ministries. Of the NRs123.7bn in expenditure sanctioned for the seven-month period, the government spent only NRs108bn, representing a shortfall of NRs15.7bn-more than accounting for the budget surplus.