The govt must bring policy-level changes to attract investments in the agriculture sector
Soon after Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel assumed office on December 25, the secondary share market bounced back to the pre-pandemic level, hoping that he would fix the problems seen in the national economy. He has given assurances to the business community that he would create an enabling condition to do business so that more jobs would be created within the country and help the battered economy return to normalcy as the country's foreign reserves exchange was improving to a satisfactory level due to increased flow of remittances and foreign tourists, two major sectors which contribute to augmenting foreign exchange reserves. He has also decided to extend the loan payment period by one more year, giving solace to the business community, which was hit hard by the COVID-19 pandemic that shut many manufacturing companies and brought the tourism sector to a standstill for more than two years. While addressing an interaction on "Economy: The Way Forward" organised by Nepal Chamber of Commerce, Minister Poudel said that although Nepal had faced huge economic problems in the past as well, the economy had not shrunk to the extent the country was witnessing this time. He said the reasons behind the economic shrinkage were being studied and that his ministry was looking for a reliable solution to the problems.
Poudel admitted that low spending of the capital expenditure and revenue mobilisation were the main reasons behind the worrying scenario of the national economy. Revenue mobilisation, which largely relies on the import tax, came to a grinding halt after the government imposed a ban on the import of luxury goods to save the hard-earned foreign currency for essential goods, such as food, medicines and fuel. The government's revenue will not increase unless it widens the tax net, makes its administration more effective, maintains fiscal discipline, and brings a balance in the fiscal and monetary policies. Other economists also suggested implementing the hedging system in a bid to bring in foreign investments in the productive sectors.
The country's economy will not be sustainable unless the government focuses on promoting domestic products that can be exported after meeting the domestic needs. It is the right time to identify the sectors of competitive advantage and goods that can be sold in the international market. The agriculture sector is one of the options in which the government should encourage large-scale farming through the mobilisation of small savings of individuals. For the agriculture sector to grow from the existing subsistence to commercialisation, private firms should be allowed to hold more land than the current land-holding ceiling with strings attached that such land shall not be used for purposes other than agriculture. For this, the government must bring policy-level changes, just like in the energy sector, to attract huge investment in the agriculture sector. The existing practice of providing small-scale agriculture loans to the small-scale farmers has not made much impact on agriculture growth. The small-scale farmers can also be encouraged to shift to large-scale farming by pooling their fragmented farmlands for producing a specific crop with financial and technical support from the government.
Medicine shortage
Jajarkot district in Karnali Province is said to be facing an acute shortage of essential medicines for the past one month. Service-seekers complain that dispensaries of the health posts do not have medicines prescribed by the physicians in stock. The private pharmacies too do not have them, causing extreme frustration among the people. The province faces extreme poverty, disease and illiteracy perennially, and its neglect by the centre only adds to the woes of the locals. Even if there is a shortage of other goods, food and medicines should be readily available to the people. People often walk for hours or days to reach the nearest food depot or a health post, and when they have to return empty-handed without food or medicine, it causes anguish.
Following the November 20 elections, a new government has taken shape, with a young minister at the helm of the Ministry of Health, who has vowed to correct the anomalies seen in the sector. The chief minister of Karnali Province has also been appointed, and his government should tend to the medicine and human resource shortage in the districts at the earliest. This is the least they can do as elected representatives of the people.
A version of this article appears in the print on January 20, 2023, of The Himalayan Times.
