The Auditor General’s startling revelation on foreign debt claiming that each Nepali owes Rs 13,000 to the world is shocking, to say the very least. Nepal’s foreign debt has crossed the Rs 324 billion mark which when calculated on the basis of the current population of 23 million plus works out to be a whopping Rs 13,000 per head. This is indeed a staggering sum given Nepal’s per capita income of $311. With the current growth rate of two per cent it would be virtually impossible to repay the huge debt. There are over 7,000 tax assessment files pending for the last 40 years, which, if cleared, can still collect Rs 520 million. Then there are 14 sick state-owned enterprises that are downright liabilities to the tax-paying citizenry. The expenditure rise has been traced to the allocations for royal palace members that shot up to Rs 680 million from Rs 120 million.

A favourable political environment is always conducive to economic recovery and debt repayment. The government should encourage fiscal discipline and generate more resources by providing continuity to the free market policy. The Maoists pledge to support the same cause is quite encouraging. Now that the royal expenditure and defence outlay have been drastically slashed, the money thus saved can also be channelised to repay the debt. The people no more expect financial irregularities, unproductive foreign junkets and embezzlement of public and donor funds. Through private-public resource mobilisation and domestic along with foreign investment, more employment and other opportunities can be created within the country itself. Only an honest approach can bail the country out of the current financial crisis.