Govt repeatedly takes suggestions to bail out economy but rarely implements them

KATHMANDU, Nov 22:While the country’s economy is reeling under the slowdown with widening negative balance in the state treasury, Prime Minister Pushpa Kamal Dahal on Tuesday organized an all party meeting to address the problems.

At a time when the government is being criticized for failing to implement effective policy measures to address the country’s ongoing economic problems, Prime Minister Dahal has sought to solve the problems by considering suggestions from various fronts of the civil society that involved politicians, private sector, and economists, among others.

In the meeting with the prime minister on Tuesday, the FNCCI forwarded a number of suggestions that stressed on boosting the confidence of the business community by increasing capital expenditure and creating an investment-friendly environment inside the country.

“The government needs to mobilize funds generated from domestic and external borrowings in development projects,” reads the suggestions forwarded by FNCCI President Chandra Dhakal.

Increasing domestic consumption of electricity and providing subsidies to production plants in electricity consumption are among the priorities of the umbrella organization of the private sector. In addition, facilitating students to study inside the country, expediting the construction of half completed highways and simplifying procedures for filing and getting VAT refund, were among other suggestions of the FNCCI.

The FNCCI has sought the intervention of Nepal Rastra Bank (NRB) to manage easy credit for the small and medium enterprises. The FNCCI has suggested the NRB to facilitate refinance loans for manufacturing, agriculture, tourism, infrastructure and information and communication technology.

Effective mobilization of remittance and creating more capital formation in rural areas, restructuring and rescheduling of the loans taken by business firms and implementing new measures to restrain the impacts of external shocks are among the recommendations made by the FNCCI.

Entrepreneurs however expressed their doubt on the government implementing the suggestions given by the private sector. Anjan Shrestha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said the private sector had given suggestions a number of times in the past to address the prevailing economic problems. “However, the suggestions were rarely taken for implementation,” he said.

Recently, the external indicators including the balance of payments and foreign currency reserves have improved. However, the government has been relying on excess borrowings even to meet its daily financial liabilities, mainly due to the pathetic revenue collection. In addition, banks have been piling up with excess loanable funds and they are unable to mobilize their deposits.

However, the government is neither committed to enforce effective measures to solve the underlying problems nor is it able to correct its practices. The government itself breaches the austerity measures that it announced to bring into practice a few months ago.

“We are hopeful that the government will be committed to enforce appropriate measures this time,” said FNCCI President Dhakal.