Double digit
inflation and lower capital expenditure will stare at the face of to be new
finance minister.
The new
government – under Nepali Congress president Sushil Koirala – that is going to
be sworn in tomorrow will find it difficult to contain the inflation that
stands at 10.3 per cent in the fifth month – of the current fiscal year –
against the government's target of 7.5 per cent. Likewise, the former
bureaucrat-government has also failed to expedite the capital expenditure that
could have created employment in the rural areas and capital formation to
contribute to the economic growth.
However,
according to the latest data, around Rs 14 billion capital budget has only been
spent, which is less than 15 per cent.
However, the
economists opined that there is also stark need of redefining priority, bring
structural change and look at the policies why they are not working.
"There
is an urgent need of serious relook in the policy on why are they not
working," said senior economist Prof Dr Bishwhambher Pyakuryal.
"None
of the indicators look encouraging," he said, urging for an urgency in
structural change in the economy. "Linking agriculture with market,
boosting tourism competitiveness index, expanding the NTIS products and
services, managing over flow of liquidity in the market and foreign aid are
key."
The low
consumption capacity of the private sector has swollen the banks and financial
institutes vault that is not going to help expand economy, he added.
Likewise,
private sector thinks that the increased public investment in infrastructure
will help propel economy and create employment for youth, who are forced to go
abroad searching for jobs. "The government must regain confidence of the
youth," said Federation of Nepalese Chambers of Commerce and Industry
(FNCCI) president Suraj Vaidya.
If only the
government walks the talk and implement election manifesto, the private sector
will gain confidence, he said, adding that the solving energy crisis – that the
Nepali Congress had claimed to solve in three years – and expediting the
infrastructure projects could be good starter.
However, the
real test of Koirala would be what types of ministers – for the key ministries
like finance, industry, labour, tourism, and energy he chooses for his cabinet,
he added.
In its election manifesto,
the Nepali Congress had set an ambitious target of eight to 10 per cent
economic growth within four years and pledges like ending load-shedding within
three years and taking industrial growth rate to 12 per cent.
No comments:
Post a Comment