Thursday, December 22, 2011

Finance Minister paints rosy picture of economy

Finance Minister Barsha Man Pun, though, painted a rosy picture of the economy, though people have not got any respite from price hike; electricity tariff is increasing from January 15 and petroleum products prices are rising in a couple of days, making a deep hole in their pocket.
Neither the government has been able to create employment, nor has it been able to spend on development activities, but finance minister claimed that the economic indicators are positive and the country is sailing smoothly.
He, however, accepted that the government has not been able to crack whip on inflation and provide any 'visible relief' to the people, as promised.
The government is committed to give relief to the people, he reiterated, adding "but increasing electricity tariff and petroleum products prices was a compulsion.”
"The government has to take risk to save the country," Pun tried to justify. "There has been no hike in the electricity tariff and Nepal Electricity Authority (NEA) is incurring losses. Similarly, Nepal Oil Corporation (NOC) is also incurring huge losses forcing the government to hike the price. The government cannot always pump capital in NOC.”
The increasing hours of power outage has made the economy less competitive and the government is looking for solution to the power crisis and is soon deciding on either installing 100 MW Diesel Plant or increasing power import from India, he added.
But the rise in electricity tariff by 20 per cent and petroleum products will increase the cost of operation of industries, transportation and make goods dearer but people's purchasing power has not increased.
Pun showed his dissatisfaction over the low capital expenditure. "We have been able to spend Rs 5.29 billion on the development activities by the end of fifth month of the current fiscal year," he said, adding that it is, though 12 per cent increment compared to the last fiscal year, the development spending is 'too low'. The government has earmarked Rs 72.61 billion for development activities in the budget for the current fiscal year.
"The government has spent Rs 84.51 billion by the end of fifth month," he said, adding, "Of the total, Rs 71.91 billion has been spent on recurrent expenditure, spending on regular salaries and administrative activities."
The lower capital spending has resulted in lesser employment creation. Similarly, the government's ambitious plan to create employment to 50,000 youths in a year through Youth Self-Employment programme has also failed.
"The government has been able to help 1,800 youths in the last four years under the programme against the government's target of 50,000 in a year," Pun said, blaming the bureaucratic hurdles for the failure. "But we are having talks with the banks and financial institutions and youth wings of the political parties to make conducive environment to create more employment through risk free loan of Rs 200,000 under Youth Self-Employment programme that is expected to discourage search for greener pasture abroad by unemployed youths," he promised.
In the fourth month of current fiscal year, some 156,721 Nepalis have already landed in the Gulf and Malaysia for employment, according to the Department of Foreign Employment.
The programme was supposed to be scrapped according to the political consensus last month as it was criticised to be a party funding mechanism.But he said that the programme will be expanded through Federation of Nepalese Chambers of Commerce and Industry (FNCCI) district chapters and government banks, as they are also showing interest to participate in the programme actively. "The government banks have promised to help the programme by creating a separate desk to lend for youths, urban and rural," Pun said, adding that Agriculture Development Bank Ltd has asked for Rs 2 billion.

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