Tuesday, May 21, 2013

Private sector should lead economy responsibly

High ranking officials at the Finance Ministry, reiterating their commitment to a liberal market policy, have asked the private sector to lead the economy.
"The private sector, with its innovation and creativity, must lead the economy," said senior economic advisor to the ministry Dr Chiranjivi Nepal, during an interaction on 'Privatisation challenges and way forward', here today.
"Though successive governments in the past seemed confused, the incumbent government stands firm on a liberal market economy," he said, adding that the private sector — with responsibility and competency — should lead the economy as the public sector cannot run industries smoothly due to lack of ownership. "The government is only a facilitator."
"However, the private sector seems lost as it repeatedly approaches the government asking for something or the other," he added.
"The government does not need to run public enterprises and will hand them over to the private sector in a phasewise manner, if the private sector is responsible and accountable," said finance secretary Shanta Raj Subedi, on the occasion.
The government has privatised some public enterprises (PEs) but most of them are either not in existence or are performing poorly, he said, adding that the private sector still lacks a corporate culture and is basically family-run.
"The government had privatised the public enterprises with the hope that the private sector would operate them efficiently and contribute to employment generation, apart from contributing to the government coffer," he said, "But the private sector has — instead of diversifying business and becoming more competent — failed to smoothly operate the privatised entities, due to which the government has slowed down the privatisation process."
The government has formed a committee to take stock of privatisation and to chart a future course of action, Subedi said, informing that it is also planning to privatise PEs that are in profit, or to operate them in a Public-Private-Partnership (PPP) model.
Post-1990, the government under a liberal market economic policy, started privatising public enterprises but most of the privatised entities are on the verge of closure. From 1992 to 2008 some 30 enterprises were privatised.
"Among them only 11 enterprises are in operation," according to chief of the Privatisation Cell under the finance ministry Bashudev Sharma. "The rest have either been closed or liquidated or dissolved."
The government received a total of Rs 6.43 billion through privatisation of public enterprises. "Nearly Rs 100 million is still needed to solve employee and supplier related liabilities of the privatised enterprises."
However, the private sector has complained to the government that it did not receive assistance from the government as promised to run the enterprises they bought.

AMC on cards
KATHMANDU: Senior economic advisor to the finance ministry Dr Chiranjivi Nepal hinted that the government, in the budget for next fiscal year 2013-14, will introduce an Assets Management Company (AMC). "It has become a must to manage assets," he added.

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