Himalayan News Service

Kathmandu, July 1:

Former finance ministers, experts and business sector people have expressed grave concerns about the deteriorating performance of the economy as the GDP growth remains less than two per cent at the close of the current fiscal year, due primarily to the on-going conflict and weak development budget spending. Former finance minister Dr Ram Sharan Mahat today said that the government has no capacity to implement budget, as the environment is becoming very tricky day by day. Government’s representation and impact on the economic sectors across the country is very much limited, due to the lack of a democratic environment, said Dr Mahat at a programme held at the Reporters Club today. Of the total Rs 32 billion allocated for the development sector this year, less than Rs 16 billion has been spent which is very ‘negligible’, said Dr Mahat stressing that the GDP growth rate lower than two per cent this year is the lowest in 15 years. He also raised serious concerns over the increasing rate of security expenses. At the same programme, Dr Shankar Sharma, vice chairman of the National Planning Commission (NPC) mentioned that development expenses have increased by four per cent in this current fiscal year.

However, Dr Sharma said that the non-agriculture sector has been hit hard by conflict. He also disclosed that the government has not been able to utilise development expenses in over 13 districts of the country. Talking about the forthcoming budget, Dr Sharma said that budget size might be more than Rs 100 billion to maintain economic imbalances and sustained economic development. “Announcing budget in this critical time does not hold any meaning as all sectors are totally dominated by politics,” said Binod K Chaudhary, president of Confederation of Nepalese Industries (CNI). He said that development expenses have gone down to nine billion rupees, which is a bad sign. Chandi Raj Dhakal, first vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) asked the government to bring about a realistic budget. He said that the tax net needs to be increased instead of tax rates. He also demanded the government to remove taxes on agro products. Kiran Sakha, president of Garment Association of Nepal (GAN), said that the first priority of the government should be to give incentives to readymade garments by reforming customs and VAT administration.