'Federalism may be financially unsustainable'

Kathmandu, Feb. 19: Experts Sunday warned that the federalism might not be financially sustainable as it was the most expensive governance system.

Speaking at the launching ceremony of Gajendra Budhathoki's book, 'Samakalin Nepali Arthatantra', they said that if due consideration was not given to the management of fiscal federalism, it would create problems in the long run.

"Federalism should be financially viable and sustainable but with the kind of resources that we have at present, it seems quite problematic in terms of management," said former Finance Minister Dr. Ram Sharan Mahat.

He said that the state authority was eroding while the country was running short of development-oriented politics.

"Lack of political stability made the government weak and economic malpractices increased which resulted in the suffering of common consumers," said Dr. Mahat.

Economist Prof. Dr. Bishwambhar Pyakuryal questioned whether the economic progress that Nepal had in the past three decades was natural or the result of economic liberalization adopted in the early 1990s.

He said that management of federalism would be a new problem for the country.

Former Finance Minister Bharat Mohan Adhikari said that economic liberalization should not shrink the welfare role of the state.

"The government should focus on creating employment to minimize the gap between the rich and poor," he remarked.

Economist and former member of the National Planning Commission Dr. Chandra Mani Adhikari said that the book had updated information on various areas of Nepalese economy.

Budhathoki is chief of the Editorial Department at Karobar daily and this is his second book where he has questioned the sustainability of the progress that Nepal achieved in the last three decades of liberalization.

The book was jointly launched by Adhikari, Dr. Pyakuryal and president of Society of Economic Journalists of Nepal (SEJON) Gokarna Awasthi.

It includes brief history of modern Nepal, various dimensions of development and economy.

The book is published by Sangri-La Books and is priced at Rs. 350.