January 19: Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel has admitted that the country’s economy is under crisis.
He said that the ministry is working to identify the problems faced by the national economy and will prepare concrete plan and programmes after identifying the problems.
Speaking at an interaction on ‘Economy: The Way Forward’ organized by Nepal Chamber of Commerce on Wednesday, Minister Poudel said that we faced the challenge of Indian blockade and Covid-19 but now we are in trouble.
“Nepal’s economy braved difficult situations line the mega earthquakes, border blockade and Covid-19. We did not face much trouble during the economic blockade or earthquake, but question arises how we reached this disappointing stage of economy now?” he questioned.
DPM Poudel said that the country’s economy faced much more crisis after onset of Russia-Ukraine war. He further said that the government is studying the reasons behind the economic downfall.
“The problems are therefore being analysed closely,” said the finance minister.
He made it clear that the government can resolve the economic crisis only after proper identification of the problems.
According to him, the government is facing worrying state of capital expenditure and revenue mobilization. The government is making necessary plans to address these problems by widening the tax net and making the tax administration effective. The government is committed to maintaining fiscal discipline, he added.
DPM Poudel said that increasing the capital expenditure is the current need and the government will encourage spending in productive sector.
On the occasion, former finance minister Dr Yubraj Khatiwada said that the government needs to do a lot to prevent Nepal’s economy from crumbling.
He suggested the government that it brought to track the economy along with balance in fiscal policy and monetary policy. “There is no point in rejoicing the increase of foreign currency reserve by reducing the goods that help create capital in the country. Initiatives are essential to scale up the domestic products,” Dr Khatiwada suggested.
The former finance minister also recommended that the government effectively implemented the hedging system to bring in foreign investment.
Moreover, former vice chairperson of the National Planning Commission, Dr Swarnim Wagle, expressed concerns that the country was heavily dependent on remittance.
At the programme, Nepal Chamber of Commerce President Rajendra Malla demanded concrete actions from the government to resolve economic problems.