Remedy for the economy
Except for the finance minister, other economic experts believe that the nation’s economy is in bad shape. Even Prime Minister Pushpakamal Dahal hosted a meeting by inviting economic experts and business entrepreneurs to find ways to rescue the economy. Despite establishing a new record in receiving remittance revenue, all other indicators have gone negative. The government is unable to meet the revenue target and the job of the finance minister has become to seek soft loans from international financial institutions. Due to the negligence of the governments formed after 1990, the nation has turned into a consumer country and the major source of the government revenue has become the customs revenue on imports. Due to the slump in the market economy, the imports have also declined and due to the failure of receiving the targeted revenue through imports, the government is unable to pay trillions of rupees worth dues. Many of the construction companies have not been able to get their payments worth trillions of rupees. When the construction companies failed to receive payment, they were unable to pay back dues to different construction materials manufacturing and supplying companies. Similarly, manufacturing companies have not been able to run their factories at full capacity due to the decline in market demand.
The government is collecting domestic loans from the first month of the new fiscal year. This trend continues in the fourth month of the new fiscal year just to manage funds and pay back the dues of the previous fiscal year.
The economy is under massive pressure from the introduction of expensive federalism with seven provinces and 753 local governments. In the past five years, in the process of managing funding to run the federal structures, the government’s debt burden has become double and the process of the government taking further loans is continuing. It won’t be a surprise if the present debt amount doubles within another five years. Taking debt for investment in infrastructural projects is a positive practice but taking debt for managing the general sector or say nonproductive sector expenditure is a bad practice.
Federalism has not only introduced seven provinces and 753 local governments but also introduced a huge federal parliament having three categories of MPs – directly elected members, members elected through proportional election and the upper house members. Besides, those in the government are given free hands for appointing huge teams of advisors, experts, and aides, among others. Such a practice has given a free hand to those in power to appoint their family members and nearer and dearer in confidential key posts. In conclusion, the present system is the main disease and there is a need to conduct a major operation to remove the disease.