Editorial: Austerity measures

The standard could slash a lot of unproductive expenses and free up funds for development and the prevention of COVID-19

With the national economy under severe strain due to the coronavirus pandemic, the government’s decision to adopt austerity measures in public spending is most welcome. The pandemic that started worldwide with the start of 2020 has affected every sector of the economy, in particular manufacturing, trade and tourism, putting hundreds of thousands of people out of work. Across the country, the coronavirus has infected 239,885 persons as of Saturday and killed 1,577 people. Although vaccines against the coronavirus are showing signs of promise, it is still uncertain when it will finally go away and life will return to normal. Thus, it is only right that austerity measures are put in place to control the coronavirus and revitalise the economy. If the public entities were to adhere to the Standard for Maintaining Austerity Measures in Public Expenditure, it could slash a lot of unproductive expenses and free up funds for development and the prevention and treatment of COVID-19.

It is common knowledge that considerable amount of government budget is spent on the purchase of office furniture, expensive vehicles and on foreign junkets and trainings by officials. Curtailing these expenses alone would save the country billions of rupees. The standard has also discontinued uniform expenses, dearness allowance, overtime expense, special allowance and food allowance for employees of public entities, except for health care professionals involved in the prevention and treatment of COVID-19. This is particularly desirable because public servants should not be seen to be enjoying extra benefits at a time when employees in the private sector, including teachers, have not received their salaries since the country first went into a lockdown in March, and are being laid off with nothing to depend on. The standard has also done away with the duplication of programmes run by the three tiers of government. All interactions by public entities are to be held online, not requiring a meeting hall. And the new standard has encouraged austerity in the purchase of office goods, stationery and use of water, fuel and electricity.

While the austerity measures introduced by the government are appreciable, we as citizens of the country would also be helping the country greatly by adopting a frugal lifestyle. With the wedding season in progress, the extravaganza with which such ceremonies are held is unflattering. Perhaps, the government could introduce rules and regulations to regulate such social gatherings and put a cap on the number of invitees, as had once been done decades back.

Also, it is not understandable why the government lifted the restriction on the import of liquor and luxury vehicles in October, which it had imposed in March fearing a depletion in foreign currency reserves.

The country in 2018-19 spent Rs 6.14 billion on the import of luxury cars and Rs 3.54 billion on import of alcoholic beverages. Also why is the private sector allowed to import billions of rupees worth of peas that Nepal does not consume? Austerity on all fronts would help the country direct resources to the intended priority sectors without having to depend much on outside assistance.

Rebuilding houses

Despite the seven-month nationwide lockdown due to the spread of the coronavirus, reconstruction of private houses and public buildings damaged in the 2015 earthquake continued unabated. According to the National Reconstruction Authority (RNA), as many as 46,870 private houses were rebuilt in the last four months of the current fiscal year. Reconstruction of 27 public schools and 12 heritage sites were also completed during the same period.

The RNA’s deadline to complete the reconstruction work has been extended by one more year till December 2021. But the reconstruction work should be completed within the seven months to come. The remaining five months will be spent to document the reconstruction activities. So far, the RNA has rebuilt iconic heritage sites, such as the Rani Pokhari and the Basantpur-based Gaddi Baithak. The 22-storey Dharahara is in the final stage of its completion. Out of the 1.57 million households eligible for a housing grant, 785,078 households have received the first tranche till date. The RNA has allowed the recipients to lay their claim for the final tranche within the next four months. The final evaluation by the NRA will show if the reconstruction work was satisfactory.