KATHMANDU, Dec 1 : Minister for Finance Bishnu Prasad Paudel has expressed worries about informal economy that is flourishing in the lead up to the Tarai unrest and subsequent economic blockade imposed by India.
Nepal's informal economy is 41 percent of GDP
Addressing a program organized by Society of Economic Journalists Nepal (Sejon) in the capital on Tuesday to mark its 18th Annual Day, Paudel warned that ‘black economy’ would be difficult to tame. “We have been seeing supply disruption due to undeclared economic blockade imposed by India and unrest in Tarai. This has given birth to an alarming situation of corruption in the society,” said Paudel. He, however, said that the government was committed to settle the present crisis through talks and negotiation with the agitating parties.
“The current economic blockade has also reinforced the need for a self-reliant economy. In sectors where we cannot be self-reliant, we should be dependant in a way that is favorable to us,” he added.Also speaking at the ceremony, Nepal Rastra Bank (NRB) Governor Chiranjibi Nepal said that the central bank was facing challenge in containing inflation within its target due to the ongoing crisis. “We have made a target of limiting inflation at single digit. However, it’s becoming increasingly difficult to meet the target due to inflationary pressure created by the informal economy that is getting bigger in recent months,” said Nepal. “A study conducted by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) some years ago showed that informal economy makes up for 40 percent of total economy. The present situation has increased its size.”
Similarly, FNCCI President Pashupati Murarka said that many industries and companies have already started laying off their workforce due to the economic crisis resulting from the present crisis. “Earlier, industrialists and businesspersons were more concerned about reopening their closed businesses. Now they preparing to permanently shut down their businesses or adapt to the current crisis,” he added.
Meanwhile, Sejon felicitated Krishna Acharya of Kantipur Daily and Nawaraj Chalise of News 24 Television with Sejon Award 2015. Finance Minister Paudel handed over cash prize of Rs 50,000 each and a certificate of appreciation to Acharya and Chalise.
