October 16: Newly-appointed Finance Minister Bishnu Poudel took charge of the finance ministry on Thursday (October 15), weeks after outgoing finance minister Yuba Raj Khatiwada resigned from his post. In his first day at office, Minister Poudel decided to take a loan of Rs 200 million from the World Bank to prevent the spread of coronavirus.
This is the second innings of Poudel as finance minister. He had taken charge of the finance ministry on November 5, 2015 when the country was facing Madhes agitation and was also struggling in the aftermath of the devastating earthquakes and the subsequent economic blockade imposed by India.
He is once again heading the finance ministry with the responsibility of bringing the ailing economy that has been badly affected by coronavirus back on track. Poudel’s chief responsibility is to revitalize the economy by taking the donor agencies and the private sector in confidence. Other challenges that he has to face includes improvement of capital expenditure and revenue collection and to uplift the private sector’s morale that suffered a major setback during his predecessor Khatiwada’s tenure.
Although Poudel said he would start working right away to meet the challenges, the road ahead does not seem to be that easy.
Although the government had set a target of collecting revenue worth Rs 1011 billion in the current fiscal year, it has been able to collect only 162 billion in the first three months. The government had announced a budget of Rs 1474 billion for the current fiscal year and has already spent Rs 188 billion. It is quite clear that the government’s expenditure is more than its income.
The Oli-led government had allocated Rs 352 billion for development works in the current fiscal year to achieve its dream of “Happy Nepalis, Prosperous Nepal”. However, it has been able to spend only Rs 11.63 billion of the development budget. The government has failed to spend the development budget owing to the coronavirus crisis while the contractors are not willing to return back to work due to the spread of the disease.
Economists say that the newly appointed finance minister faces an uphill battle to bring the economy back on track because the government is expected to get only limited support from donor agencies as the pandemic has caused widespread problem across the globe.
Former finance minister Ram Sharam Mahat says that the new finance minister must be careful to cut down unnecessary expenses of the government. He says that the government must implement the suggestions given by the Review Commission in this regard.
Meanwhile, former vice chairman of the National Planning Commission Jagdish Chandra Pokharel suggested that the finance minister must adopt a policy to provide relief to those who have lost their jobs due to the lockdown and also for those who are living below the poverty line.