Finance Minister Dr. Ram Sharan Mahat Monday clarified that the budget was allocated to the royal palace as per consensus among the leaders of the ruling eight party alliance.

Responding to the questions of parliamentarians in the discussion session of the interim parliament Monday, Dr Mahat said, “I have allocated the budget to the royal palace as per the status of the king in the interim constitution, and it is purely based on discussion with senior leaders.”

Earlier, majority of the parliamentarians taking part in the budget discussion session in the parliament had criticized the government for allocating budget to the palace.

“The budget was not allocated to the palace through the backdoor, as some may believe,” he said, “I have not hidden anything. This was done as per the request that the palace should not appear under a separate head in the budget.” The government has allocated Rs 125 million to the Royal Palace for the fiscal year 2007/08.

Finance Minister Mahat tried to justify the budget allocated for the palace, saying that the Narayanhiti Palace was a ‘national property’ and the budget was allocated for its ‘maintenance’. Dr Mahat also informed the parliament that the budget allocated to the palace was taxable.

Denying claims by parliamentarians that the budget was ambitious and inflated, Minister Mahat said the 2007/08 budget was inclusive and its main focus was constituent assembly elections and development.

He also said that the government would encourage private sector investment by developing market sources.

The parliament also passed the Appropriation Bill 2007-08 and the Advance and Expenditure Bill 2007-08 unanimously Monday.