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By P.R. Pradhan

The present political system cannot function, it has been confirmed. The country is passing through a serious financial crunch. Simply, when income is less than the expenditure, one should take loans to manage expenditure. If failed to manage the income-expenditure balance promptly, the loan burden will intensify and, finally, the economy will collapse. The same applies to the nation. Since the political change in 2006, the nation introduced a large constituent assembly. The assembly imposed expensive political system with seven provinces and 753 local bodies elected by the people and also provided salaries to the elected representatives. The elected representatives from the president and prime minister to the ward chiefs and ward members receive salaries and allowances from the government treasury. In this way, the country’s non-productive sector expenditure has increased enormously, whereas, the government revenue has declined. Therefore, the government is taking loans worth two billion rupees every month from home and abroad, yet, the government lacks funds for development sectors.

The economic survey conducted by the Nepal Rastra Bank, the customs department and other agencies explains that the government is helpless in meeting revenue targets. As industries closed, Nepal has turned into a consumer country. Even for agricultural products, Nepal is dependent on other countries. There is no effective policy to establish industries substituting imports. Furthermore, as the government revenue is relied on the customs duty on goods imported from foreign countries, the government has already fallen into a trade trap, it is because the government cannot generate revenue through customs duty if not imported goods from abroad.

Moreover, there is no environment for establishing new industries due to the heavy taxation and excise duties. Nepal is the country where the taxation rate is very high among South Asian countries.

Due to the lack of vision among the political leaders, an expensive political system has been imposed despite opposition from the financial experts. Not odd, foreigners wanted to destroy this beautiful Himalayan Kingdom by imposing a constitution written by foreigners serving their vested interests. The Indo-West theory is that they can intensify their domination if a country remains permanently poor. They believe they can exploit our natural resources, they can easily buy political leaders and bureaucrats if the country is poor. The same theory has been applied to Nepal by the Indo-West powers. Those, who claim that they had struggled hard in introducing the present constitution, are just the brokers of the foreign powers, now it is an open secret to all. The fact is that if we prolong the present constitution, surely, our economy will collapse following the collapse of this sovereign country. The political leaders discard this fact because they are involved in daylight loot of the government treasury. The political leaders have become comfortable with this system as they can manage their party cadres. On the other, the general public’s daily life has become very difficult. There are no employment opportunities within the country, therefore, youths are going abroad for dirty and risky jobs. They are sending their earnings to Nepal but the government is spending such earnings on importing goods from foreign countries, instead of utilizing such scarce foreign currencies in development projects giving return to the nation soon.    

The impact of such wrong policies is the present economic recession in the country. Deposits in the commercial banks have increased and the bank interest rates are continuously declining, still, there is no demand for loans. As the government is unable to spend money, demand declines in the market. Industrialists cut down their production due to which demands for bank loans have declined. Due to the wrong policy of the Nepal Rastra Bank and the government, the real estate market and also the share market faced a crisis. Along with the collapse of the real estate and share markets, the government also lost revenue. Accordingly, due to the decline in imports, the customs revenue declined. Such activities have contributed to prolonging the present economic recession and there is no scenario for overcoming the situation. The economy has already collapsed. To rescue the nation from the present crisis, we need to speak the truth that the present political system should be scrapped as soon as possible and introduce a sustainable political system by reducing non-productive sector expenditure and increasing development sector expenditure.