The erosion of NRB's autonomy could lead to the appointment of a new governor with change of govt

The suspension of Nepal Rastra Bank Governor Mahaprasad Adhikari by the government on Friday could not have come at a more inopportune moment, coming as it does when the central bank and the Ministry of Finance should have been putting their heads together to tackle the looming financial crisis in the country. A Cabinet meeting on Friday had decided to investigate Governor Adhikari by forming an inquiry committee to probe allegations that he had leaked sensitive government information to the media and had not executed his duties satisfactorily.

The government has every right to do what it has done as the governor, deputy governor and director can be removed under the NRB Act for failing to carry out their responsibilities effectively. But did the suspension come due to differences between Finance Minister Janardan Sharma and Adhikari as it is said that the two did not see eye to eye on many issues, with the former accusing the latter for the country's economic downturn and liquidity crunch.

For the country's poor economic indicators, one might question, whose performance has been more lackadaisical – that of the finance minister or the NRB governor? Prime Minister Sher Bahadur Deuba is said to have been unhappy with the performance of his finance minister, who hails from the CPN-Maoist Centre, for his failure to take steps to put the economy in order. It's no secret that the country's economy has been badly battered over the last two years due to the coronavirus pandemic, decreasing remittances, falling foreign direct investment and now the war in Ukraine into its second month, which has pushed the price of oil and raw materials to record levels. Moreover, tourism which used to contribute about 7 per cent before the pandemic remains sluggish. With depleting foreign exchange reserves, there is growing concern that Nepal could very well face a crisis as in Sri Lanka in the near future.

Although Minister Sharma has brushed aside such apprehensions, citing the country does not have a huge foreign debt like Sri Lanka's, yet one cannot ignore the tremendous pressure on the balance of payments due to the gnawing gap between exports and imports, something he as finance minister has failed to bridge.

The manner in which the incumbent government has been suspending people in high posts over flimsy excuses does not auger well for the functioning of democracy or stability in the country. Earlier on March 13, an impeachment motion was brought against Chief Justice Cholendra Shumsher Rana on charges of corruption and inability to carry out his duties satisfactorily.

But their suspensions look more like personal or political retribution for not towing the government line. This, however, is not the first time that an NRB governor has been suspended over differences with the finance minister. Regardless of what charges have been labelled against NRB governor Adhikari by the government, if he has been suspended largely because he was appointed to the post by erstwhile Prime Minister KP Sharma Oli in April 2020, then this sets a very bad precedent. The erosion of NRB's autonomy could lead to the appointment of a new governor with every change of government as for all other posts.

Strict poll rules

In a bid to make the May 13 local level election free, fair and impartial, the Election Commission (EC) has issued a number of fiats, empowering the returning officials to even deny the voting right to those who visit the polling station under the influence of alcohol. The returning officer can order the security personnel to arrest those people who carry batons, spears, khukuris, rifles, pistols and other home-made weapons. The returning officials can also issue a public notice imposing a total ban on the sale and distribution of liquor in a given area with the start of the silence period until the voting is over.

While these measures taken by the EC are a welcome move, it has, however, landed into controversy by requiring an incumbent candidate to put in his or her papers before filing the nomination. The EC's circular also says that the decision of the counting official will be final should any controversy arise during vote counting. The representative of a candidate should have the right to challenge the decision of the vote counting official. As the local level poll is being held in a single phase, holding the poll in a peaceful manner will be a daunting task for the EC.

A version of this article appears in the print on April 11, 2022, of The Himalayan Times.