On/Off the Record

By P.R. Pradhan How is the economic health of the country that has been made clear from the whitepaper presented recently by finance Minister Janardan Sharma! So far, of late, it has become a tradition for unveiling such a whitepaper on the economic situation. When the Nepali Congress-led government was succeeded by the UML government led by K.P. Sharma Oli, the then finance minister Yubraj Khatiwada had unveiled a whitepaper explaining the economic scenario of the country. Khatiwada blamed the previous government led by the Nepali Congress for bringing down the country to a state of economic bankruptcy. When the Oli-led government failed and an alliance government has been formed under the leadership of Prime Minister Sher Bahadur Deuba, Finance Minister Janardan Sharma Prabhakar unveiled a whitepaper on the economic scenario. Sharma blamed the Oli led government for spending the government coffer in the non-productive sector creating an investment crisis in future in the development sector. Due to the wrong economic policy, the economy was heading towards a negative path, Sharma explained by producing economic indicators. Sharma explained that the previous government had collected Rs 829 billion in revenues in 2020-21 which is not sufficient even to meet the recurrent expenditure. Sharma presented a bleak picture of the economy during Oli’s rule. The whitepaper has explained that the gross saving of the country against the GDP came down to 6.6 percent in 2020-21 from 13 percent in 2017-18. The country’s economic foundation has remained weak due to the limited contribution of the industrial sector in the GDP, Sharma said. The ratio of exports and imports that year was 48 percent, which came down to 9.2 percent in the last fiscal year 2020-21, the whitepaper states. Anyway, the economic health of the country is not good. The whitepapers either presented by Khatiwada or by Sharma, speak a lot about the downfall of the economy, a mirror of a nation's prosperity. Downgrading of the domestic products; widening gap between imports and exports; excessive domination of imports on the country’s exports; a surprising incline on the government’s general expenditure; allotment of a very nominal amount in the development sector and that too, the government unable to spend above 60 percent; alarming level of incline on domestic and foreign debt speaks a lot about the off-track economy. In the past three years only, the government has added 250 billion rupees as debt. There are no other ways except taking further debts to meet the government expenditure. Therefore, the debt amount is surely going to incline further. Today, each citizen is carrying a debt burden worth 56 thousand 842 rupees, which is going to incline in the days to come. If the debt is utilized in the productive sector or for the construction of the infrastructural projects, it may help for the recovery of the economic sector in the long run but the government is found spending the debt for salary and allowances of the government employees and also the political employees (people’s representatives), which is known as a non-productive expenditure. None of the governments, either the outgoing Oli government or the present Deuba led government, are able to reduce the general expenditure of the government. It is because we have introduced an expensive political system with seven provinces. In the present system, there are seven chief ministers, seven provincial chiefs, seven opposition parties’ leaders, seven provincial council chiefs, 70 ministers, 70 secretaries and 550 provincial council members. Besides, the size of our federal parliament is also very large compared to the size of the country and its population. All of the people's representatives are receiving monthly salary and allowances, besides additional expenditure for their security, vehicles, office assistants, among others. Moreover, we have 753 local bodies. They too are found spending a large amount of the government fund in non-productive sectors, such as the appointment of advisors, security personnel, taking allowances on their own wish, etc. Although the political leaders supporting federalism cannot speak that the country economy is on the wrong path due to the introduction of the federal structure, the reality cannot be hidden. The revenue generated by the government is not enough to meet the general expenditure. Therefore, we have no other options except to take a domestic and foreign loan to manage funds for the development project. It is sad to note that when the government needs money, it is found managing the fund for the general sector from the budget allotted for development projects by changing the title. We, who are consuming petro-products, are paying additional tax for the construction of the Budhigandaki project. The government doesn't make public how much fund has been generated for the project. It makes clear that the government is misusing the fund. Although Minister Sharma projected total economic failure of the Oli government, later, when Sharma will quit, his successor will also present the same economic scenario as there is not going to be a miracle in the economy. Rather, there is a serious threat of collapse of our economy as we have not been able to control imports and we have not been able to reduce our debt amount. If such a trend will continue further, in the days to come, Nepal may face a critical economic stage of the debt trap. The only medicine to avoid such a worst situation is to scrap the present costly political system without any delay.