By P.R. Pradhan

The National Planning Commission has dropped thousands of infrastructural projects included in the projects of national glory. While preparing the budget for the new fiscal year, the Finance Ministry is facing a fund crisis on the allotment of the budget for the projects of national glory. Development sector investment or say infrastructural development is vital for Nepal like a less-developed country. The compulsion is that we should reduce non-productive sector, or say, general sector expenditure and increase capital expenditure to give the right direction to our economy. The trend of the Nepali economy is heading towards a negative direction as our budget is dominated by inclining general sector expenditure and declining development sector expenditure.

For years, we have been continuously writing and saying that the government is heading towards the wrong direction as the general sector expenditure has dominated the capital expenditure. Since the adoption of the federal structure and the introduction of an excessive number of local bodies and provinces, around 40 thousand political employees have been added to the list of receiving salaries and allowances from the government treasury. Besides, the government’s social security expenditure has also inclined to a higher extent. If not corrected such negative things on time, very soon, the nation will be bankrupt.

Reducing the number of local bodies, removing the provincial structures, removing district coordinating committees, removing the national assembly, removing the proportional election system, and reducing the size of the federal parliament are the immediate tasks to be done by the members of parliament through an amendment in the constitution. Furthermore, ending the practice of unnecessary commissions and committees and trimming the civil service by introducing e-governance in government offices could also be the way to cut down non-productive sector expenditures.    

Corruption and commission practices have to be controlled through a strong mechanism. The Nepal Army Welfare Fund should be utilized for opening new industries to be run by former NA employees. The Bhagbanda practices in civil service, and education sectors, including schools and universities should be ended. Similarly, the appointment of judges in courts, and promotion in the Nepal Police and Armed Police personnel and constitutional bodies should not be made through Bhagbanda but through meritocracy. The political intervention in the government undertakings should be ended.

As the global order is changing course, the practice of providing financial grants by donor nations is declining, and our leaders in the government need to do good homework to make the economy self-reliant. The free market economy has failed and now the practice of protecting national industries has been introduced. In such a situation, Nepal should reduce its imports and make efforts for a self-reliant economy. Overnight we cannot change the existing policies and overnight we cannot run industries substituting imports. Even though, we should develop plans to establish different industries, perhaps, on a public-private partnership model.

We should not reject projects related to infrastructural development such as roads, railways, and operating air services among others. Even by taking loans from international financial institutions and foreign countries, we should focus on developing infrastructural projects. To end the load-shedding crisis, we should develop Budhigandaki multiple project; to meet the demand for smooth air service, we need to construct an international airport in Nijgadh. Nepal Airlines should be empowered with the necessary aircraft needed for the operation in the domestic and international sectors.

Now, we have very less options. Either to become a failed state or to rescue the economy by controlling corruption, increasing development sector expenditure and industrializing the country along with introducing scientific farming. We are walking towards the wrong path by practising deindustrialization. We have enormous opportunities as we have two immediate huge neighbors. If we supply livestock to China, we can make enough profit. There is a big market in China, which should be explored. Attracting foreign direct investment by giving discounts and introducing investment-friendly taxation are the immediate works that the government should do without delay.   

The main problem with our economy is the adoption of federalism which is very expensive and Nepal’s revenue sources cannot meet the expenditure. Giving excessive priority to the present politics has resulted in the present economic crisis. Now, we need to focus on economic development by introducing a sustainable political system giving space to all the political actors.