Kathmandu, Nov. 21
Prime Minister Pushpa Kamal Dahal Prachanda said that
the economy is still under pressure and there is a need for greater and
cooperation among the stakeholders to find solution.
"Although some indicators of the economy are
positive, the economy is not free from pressure. It is necessary to have more
intensive discussions to resolve the problems of the economy," he said at
a high-level discussion with political parties, private sector and other
stakeholders.
He informed that the government is thinking about the
current state of Nepal's economy and possible ways to move forward with
pragmatic solutions.
According to PM Prachanda, although several indicators
of the economy have been positive since last year, the economy has not yet
reached a point where it is free from pressure. "Therefore, it is
necessary for us to come to a proper conclusion with serious discussion. If we
do not face it together, the crisis will deepen," he said while adding
there is no need to worry much as the government is serious in managing the
crisis with the cooperation from the private sector and other entities.
The Prime Minister said that although problems related
to cooperatives, microfinance, bank interest rate, businessmen's loans have
arisen in the past due to various reasons, some people are trying to gain
political advantage by showing this problem. He said that efforts are being
made to spread mistrust and chaos in the society.
Speaking on the occasion, Finance Minister Dr. Prakash
sharan Mahat, said that the government will not listen to those who say they
will not pay back the loans they have taken.
He asserted that the government will work proactively in
the areas of promoting hydropower, agriculture, tourism, IT, and small
industries and businesses with a long-term thinking vision.
"We discussed about facilitating businesses that
are in trouble. But demands of those who are not ready to pay back their loan
will not be heard. Debt must be paid. The government is ready to give some time
to facilitate those who are in difficulties," said FM Dr. Mahat.
Governor of the Nepal Rastra Bank, Maha Prasad
Adhikari had presented the current status of economy and said that the external
sector has become strong while the financial system in the country has enough
liquidity. Most of the participants were optimistic that the country's economy
will become more dynamic in the days to come.
President of the Federation of Nepalese Chambers of
Commerce and Industry (FNCCI), Chandra Prasad Dhakal, said that despite about
Rs. 500 billion liquidity in the country's financial system, record high inflow
of remittance and tourists, and year-long positive balance of payment status,
the government is under pressure due to the current account deficit, poor
revenue collection and pathetic use of development budget.
Likewise, the inflation rate has not gone down from 7
per cent in the past 20 months, industries like cement and iron bars are
running below 30 per cent of their capacity, small and medium entrepreneurs
have been shutting down their businesses, and youth involved in agriculture and
small businesses have been leaving the country, he said.
The private sector is also facing the challenges like
the contraction in demand and many have been seeking way out from their
businesses.
Dhakal said that these impacts were the result of
apprehension of high economic expansion in the aftermath of COVID-19 pandemic
and both the government and Nepal Rastra Bank opted to reduce the expenditures
and financial facilities.
He urged the government to support the private sector
in building the confidence by increasing the capital expenditure and creating
investment friendly environment. He also suggested to increase the utilisation
of the fund that the government raised through domestic borrowing.
"When we have reached the point from where we
need to expedite the efforts to bring the economy back to the track, anarchical
activities have begun to happen. It must be curbed at any cost as it could
potentially harm the foreign investment as well as the tourists," said
Dhakal.
The private sector entrepreneurs have also said that
the government and central bank should work to facilitate the cottage, small
and medium industries. Likewise, the central bank should find ways to bring
down the interest rates on fixed deposits. Business sectors like agriculture,
tourism infrastructure and ICT need refinancing and concession in taxes.
Likewise, President of the Independent Power Producers
Association of Nepal (IPPAN), Ganesh Karki, said that all hydroelectricity
projects should have the opportunity of Power Purchase Agreement (PPA).
He also said that if the country has to achieve the
national target of 28,000 megawatts of electricity in the next decade, the
government should do the PPA with all the projects and some policies related to
land and forests should be scrapped.
According to him about Rs. 4.6 trillion is needed to
achieve the target of 28,000 MW so there should be a single-digit interest
rates for the loans mobilised to energy sector while foreign direct investment
should also be attracted.
No comments:
Post a Comment