Govt plans measures to revitalize economy « Khabarhub
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Govt plans measures to revitalize economy

22 November 2023  

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KATHMANDU: Prime Minister (PM) Pushpa Kamal Dahal ‘Prachanda’ has been engaging in a comprehensive discussion on the country’s current economic state, and to address the challenges dogging the country.

On Monday and Tuesday, Prime Minister Dahal dedicated eight hours to deliberate on potential reforms, holding consultations with the private sector, political parties, and experts, among others.

While external indicators such as Foreign Exchange Reserves, Reserve Adequacy, Current Account, and Balance Sheet are positive, internal indicators are also showing improvement.

However, Prime Minister Dahal underscored that economic issues persist due to dissatisfaction within the private sector and the prevailing psychological panic among the general public.

Emphasizing the need for a comprehensive dialogue, he urged all stakeholders to contribute to finding effective solutions for the economic challenges at hand.

This discussion has brought to the forefront four key issues, including the speculation surrounding loan waivers, the role of the government in addressing grievances within the private sector, challenges in the financial sector stemming from inadequate regulation, and the government’s broader interest in the overall economy.

Prime Minister Dahal also acknowledged an economic slowdown due to low government spending and has directed ministers and secretaries of ministries with substantial capital budgets to earnestly increase capital expenditure.

Prime Minister Dahal, Finance Minister Dr. Prakash Sharan Mahat and Governor of Nepal Rastra Bank Maha Prasad Adhikari collectively conveyed a clear message that there is no possibility of forgiving or discounting previously taken bank loans.

They have advised the public not to succumb to such unfounded rumors.

Additionally, the government has pledged to take appropriate measures in other areas.

According to sources, efforts will be made by the Nepal Rastra Bank to assist businesses and the private sector facing difficulties in repaying loans.

The Prime Minister’s Office, in a statement, indicated that Nepal Rastra Bank will facilitate individuals who have invested but are struggling to repay loans taken from banks and financial institutions.

Furthermore, a review of the bank rate through Nepal Rastra Bank will be conducted concerning interest-related matters.

Meanwhile, acknowledging issues in the cooperative sector arising from a lack of regulation, Prime Minister Dahal stated that the initiation of a process to establish a specialized organization dedicated to regulation.

Plans include creating a cooperative fund to safeguard savings and loans within the cooperative sector.

The establishment of this specialized organization to bring cooperatives under regulatory oversight is slated to be completed within six months.

In a similar vein, the Prime Minister also addressed the facilitation of loan repayments taken from microfinance institutions, detailing plans for the process.

Similarly, while experiencing an annual increase of 20 to 22 percent, revenue witnessed a decline last year and has not met expected growth this year.

The current revenue growth rate stands at a mere three percent. To address this, there are plans to enhance the revenue structure based on recommendations from a recently established commission aimed at improving the tax system, which has recently commenced its operations.

Prime Minister Dahal also announced a prioritized focus on major infrastructure projects.

His announcement highlighted a commitment to advancing significant projects such as Budhigandaki, Nijgadh Airport, Karnali Chisapani, Upper Arun, and the construction of three cricket stadiums in the country.

Additionally, he also assured that efforts will be made to promptly resolve issues arising from the implementation of ongoing contract extensions following purchase agreements.

Despite multiple government deadline extensions for various projects, delays persist for diverse reasons, hindering the construction industry’s operations.

The government has pledged to address outstanding obligations promptly, acknowledging a pending payment of approximately four billion rupees to builders.

Prime Minister Dahal also acknowledged an economic slowdown due to low government spending and has directed ministers and secretaries of ministries with substantial capital budgets to earnestly increase capital expenditure.

Publish Date : 22 November 2023 08:09 AM

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