Kathmandu, April 2

Former finance minister and leader of opposition party Nepali Congress, Ram Sharan Mahat has criticised the white paper recently presented by Finance Minister Yubaraj Khatiwada as ‘misleading' and ‘an attempt to defame the past governments'.

“By presenting a white paper at the Parliament last week, in which he painted a bleak economic scenario, Finance Minister Khatiwada intends to take full credit for economic recovery in the future,” Mahat claimed.

Mahat has alleged that Khatiwada was extremely selective in choosing the data to show the dismal condition of the economy. “He has compared some of the figures at different time intervals, like some of the data have been compared over five-year period, some over 10 years and some over 20 years,” said Mahat, adding, “Figures should be presented in a balanced and scientific manner.”

A white paper should be a snapshot of the economy, in which both positive and negative aspects of the economy need to be highlighted, said Mahat. “However, the finance minister is overly focused on gloomy part of the economy, while overlooking the positive aspects.”

Also dismissing Finance Minister Khatiwada's dire warning that the state coffers were nearly empty, Mahat said, “Our treasury surplus in today's date stands at Rs 271 billion, but the finance minister, in the white paper, had given the impression that the state is broke.”

The former finance minister has also criticised the trade statistics presented in the white paper, which showed that the country's import surged by 41 folds in the last 25 years, but failed to mention that the revenue has soared by 62 folds over the same period of time. “The white paper has said that the country's revenue is largely import-based as 47 per cent of the revenue is collected from the customs sources, but it has not stated the positive aspects like how the income tax has been contributing 23 to 24 per cent to the revenue.”

Mahat further said that the policies adopted by the past governments to keep the fiscal discipline in prudent order have supported to sustain the country's economy despite the country suffering from long insurgency and transition.

Stressing that the economic situation is not as bad as portrayed by the finance minister through white paper, Mahat said, “Public expenditure is just 110 per cent of the revenue, which is very sound and it means the government has enough fiscal space as the government has used internal borrowing, foreign debt and grant as the source for budget financing.”

Former finance minister also criticised Khatiwada for declaring in the white paper that the privatisation drive was unsuccessful. “In fact, the privatisation of public enterprises was carried out based on the law endorsed by the parliament and the CPN-UML leaders and lawmakers were also represented in the privatisation committee,” said Mahat, adding, “Different modalities were applied in privatisation - some were privatised through competitive bidding, in some cases certain stakes were sold to the public as shares at competitive prices - everything was based on what the committee recommended.”

Terming the unveiling of the white paper as a ‘political stunt' of the leftist forces, Mahat said, “Nepali Congress never criticised the move of CPN-UML government for purchasing share of private jute mill in Biratnagar from Indian investors, and the firm wound up becoming a huge liability for government.”

On a positive note, former finance minister Mahat praised the commitment expressed by Khatiwada to stop fiscal anarchy.

Mahat also warned that the country could face challenging times ahead if the central government fails to become leaner and engage only in policy-making and implementing national-level projects.

“The responsibility of service delivery has been handed over to the lower layers of administration, but the central government seems keen on holding onto power and capturing around 60 per cent of the budget,” Mahat asserted.