Nepal | July 05, 2020

‘Bring innovative and executable budget’

Himalayan News Service
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Kathmandu, May 14

The Nepal Economic Association (NEA), an organisation of national economists, has suggested the Ministry of Finance (MoF) to bring an innovative and practical budget which can be implemented for sustainable economic growth.

In a recent pre-budget interaction titled ‘Nepal’s Forthcoming Budget: Priorities and Way Forward’, which was held with a view to provide suggestions to the MoF, economists laid emphasis on innovative and executable budget to address the underlying problems of Nepali economy and create ground to move forward to attain country’s aspiration of economic prosperity after the promulgation of the new constitution.

Following the government’s latest announcement of policies and programmes in the Parliament, NEA came up with some priorities to focus on for the overall economic revival in the wake of last year’s devastating earthquakes and border blockade.

As the state has sufficient resources, it has to develop mechanisms to spend those resources productively and in a timely manner. With less than one per cent economic growth currently, it is ridiculous to see that the state has billions of rupees lying in surplus in its coffers but economic activities are not being carried out properly, said Professor Bishwambher Pyakuryal, president of NEA.

“Now the question arises as to why we are not able to implement programmes, utilise money and invigorate economic activities. The existing system has failed to work in a productive way which needs timely overhauling,” he added.

Pyakuryal further said that the country has gone through difficult stages in maintaining macroeconomic stability over the last one year largely due to three fundamental reasons — undesirably low economic performance before the disaster; massive destruction of human and physical infrastructure by the devastating earthquake of April 25, 2015; and the four-month-long economic blockade in Nepal’s southern border which began in the fourth week of September last year.

“Despite the fact that macroeconomic fundamentals were satisfactory, the capacity constraints in the productive sectors followed by declining exports and non-performance in infrastructure development limited the economic potential in Nepal. The country is facing hyperinflation where general price level within the economy has increased rapidly and the Nepali rupee is losing real value,” Pyakuryal added.

He sought strong coordination between the Office of the Prime Minister and Council of Ministers, National Planning Commission, MoF and Nepal Rastra Bank to rescue the country from the cascading effects of the earthquake and blockade. “Monetary tightening as a macro policy undertaken by the central bank and government’s commodity-specific policies to contain price need to go together,” he stated.

As the earthquake has brought many challenges for the survival of the Nepalis, the upcoming budget should gear towards economic revival
focusing on productivity, implementing rules and regulations and mobilising government machineries effectively, as per NEA.

NEA’s Secretary General Gopal Prasad Tiwari and Executive Member Shiva Raj Adhikari jointly made a presentation on ‘Nepal’s Forthcoming Budget: Priorities and Way Forward’. In the presentation, they stressed that budget allocation as per the defined programmes focusing on reconstruction needs to be expedited with sound working mechanisms. Making the country self-reliant is difficult but it can be achieved with the expansion of linkages with the global economy, encouraging investors, focusing on agriculture with sufficient budget, and implementing the programmes effectively, they mentioned while presenting the paper.

Also speaking in the programme, Madan Kumar Dahal, a prominent economist, said that on the one hand, there is prolonged transition, dismal domestic investment, weak foreign investment and energy crisis. And on the other hand, there has been weak initiative in providing relief to earthquake victims, low efforts in reconstruction, increased corruption and black-marketing, as per him.

“In such a paradox, Nepal has plunged into an economic crisis which needs immediate revival with increased investment by attracting foreign investors and implementation of programmes effectively.”

Finance Minister Bishnu Prasad Paudel reiterated that the government is focusing on economic agenda rather than political issues. The initiatives taken by NEA in suggesting the government on budget formulation is commendable, which will be incorporated in the forthcoming budget, said Minister Paudel.

A version of this article appears in print on May 15, 2016 of The Himalayan Times.

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