Thursday, June 20, 2013

Not apt to seek remittance for development: Finance Minister

It is not a suitable proposition to ask for remittance to be spent on development, according to finance minister Shankar Koirala.
Addressing an interaction on 'Nepal's budget for fiscal year 2013-14,' organised jointly by Nepal Economic Association (NEA) and the Finance Ministry here, today, he said that it would be unfair to ask the poor for their hard earned remittance to be spent on development, whereas rich people spend 80 per cent of their income on luxury items. Some of the intellectuals have been asking the government to spend remittance on infrastructure development, but the minister criticised the idea.
"However, remittance has to be channelled to the productive sectors," he added.
Likewise, the Constituent Assembly (CA) election on November 19 will also bring some momentum in the economy, he added. "The incumbent government will hand over a dynamic economy to the elected government."
The budget will as expected bridge the gap between the private sector and government and help create an investment friendly environment as it has focused on a liberal market economy, the finance minister claimed.
Presenting a paper, Prof Dr Madan Kumar Dahal suggested the government
to target five to six per cent economic growth. "Nepal is the slowest growing economy in South Asia," he said, recommending a slew of suggestions for the budget that could help propel economic growth.
"The budget should reform the tax system, public expenditure, legislature, and institutions," he said, adding that the government should abandon the policy of running businesses and establishing industries.
"Nepal is suffering from high cost, poor infrastructure, fragile industrial relations, and increasing risks with uncertainties," Dahal added.
It will take effort and time to promote exports, so the budget should focus on import substitution, which is possible, suggested Prof Dr Govind Nepal, on the occasion.
Since the country is following a model of debt-led growth, the productivity of foreign aid must be higher, and the share of external and internal borrowing should not increase further, the experts suggested.

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