KATHMANDU, May 10: While the government is drafting the budget for next fiscal year, private sector and economists have recommended the government to bring in programs to lift the confidence of the private sector.
Speaking at a pre-budget discussion organized by the Society of Economic Journalists-Nepal on Thursday, the analysts pointed out the need for systemic reforms to improve capital expenditure by the government, transparency of the tax rates which are to be revised, reduction in bad debts of banks and reform measures to find alternative measures to increase revenue collection by the government.
Chandra Dhakal, president of the Federation of Nepalese Chambers of Commerce and Industry, said the government needs to maintain good coordination between fiscal and monetary policies along with facilitating the industries that provide job opportunities to a notable number of people.
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“The government has to focus on promoting a business-friendly environment while lifting up the aggregate demand and aggregate supply situation of the economy,” he said.
Rajesh Kumar Agrawal, president of the Confederation of Nepalese Industries, urged the government to enforce improved economic policies by giving priority to domestic production.
Economist Achyut Wagle underlined the issue of good governance and inadequate government revenue collection. “There are underlying problems in corporate governance, market governance, investment governance and government governance,” Wagle said.
Wagle stressed on the need to find new sources for the government for revenue generation. “If the government fails to do so now, the entire economy might fall into a serious financial crisis,” he added.
Due to the sluggish revenue collection and inability to check unproductive expenses of the government, the country has been facing an ever increasing burden of loans. In the past four years, the country’s per capita debt has doubled to over Rs 90,000, shows the records of the Public Debt Management Office.
Economist Biswash Gauchan said the budget should comply with the long-term plan implemented by the government. He sought the need for structural reforms in the bureaucratic system for the effective implementation of the budget.
Resham Thapa, head of the Central Department of Economics, TU, recommended the government not to endorse exorbitant size of budget. According to him, making the sub-national governments play an effective role in budget implementation could help drive the economy with notable changes.
