Social capability, to a larger extent, depends upon the rules and regulations of the Government. Mostly, we use this term in relation to incentive structures, whereby the Governments in consultation with the bureaucrats, frames incentives, let’s say for investment opportunities under taxation laws. Incentives, in the area of taxation, are prima facie understood as relaxation or benefits provided to the private or public players, either to encourage investments in that particular sector or to introduce revenue generating activities which in the long term may have significant impact on the economy. Such benefits are awarded keeping in mind the conditions that are required to be fulfilled before or during the course of executing such projects while establishing a certain time frame.
Nepal’s GDP will thrive only when economic activities are carried out on a large scale. One important component for any Government to understand is social capability. But often we see Government bodies floundering in policy making areas due to lack of concern for the growth of the economy. We see short term benefits outweigh the long term results. This alarming situation can be averted when the Government, in its entirety, follows the principle of “capacity to act and deliver”. Social capability does not mean to forecast tomorrow’s share price but to take measures to integrate the economy, introduce patient capitalistic planning and focus on the weak sectors of the economy.
We have observed that 80 per cent of the total allocable budget for FY 74-75 is being directed to physical infrastructure works. The government’s leitmotif here is to make roads accessible to all.
This will assist communities in introducing trading activities of which the ultimate beneficiaries would be locals living there. Gradually markets will develop and the economic activities will surge upwards. Therefore, the cost ratio to make roads will be nothing in comparison to the benefits derived from economic growth in the concentrated area.
Likewise NRB has introduced special loans to the agricultural sector at a nominal interest rate. This is because the apex bank thinks this will create huge employment and revenue generating activities.
Therefore, incentives require a go ahead with a proper institutional framework to monitor each activity. A little financial support might work wonders to Nepal’s economy.