The economy that we call healthy is not in that natural health. There are problems. We have not been able to create a business environment. -Former Finance Minister Khatiwada
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Former Finance Minister Yubaraj Khatiwada has said that although the current economy has improved somewhat in terms of external indicators, it is still unhealthy in reality.
At a program organized on the occasion of the anniversary of Nepal Rastra Bank, Khatiwada said that although the external sector is currently balanced, inflation is under control and economic growth is around 2-3 percent, it is not that positive.
According to Khatiwada, the solution to the current problems is not possible with small monetary measures like 'physiotherapy', major structural reforms or 'surgery' are necessary. He says that if the government cannot create an investment-friendly environment, credit flow will not increase just by reducing interest rates.
'The health of the economy that we call is not the economy in natural health. There are gaps in the problem. We have not been able to create a business environment. Until we create an environment that encourages investors by creating a business environment and ensures that investments are safe, the small physiotherapy provided by the Rastra Bank will not work. Physiotherapy will not do much, surgery is needed. A major operation is needed,' says Khatiwada.
Stating that the investment environment has deteriorated due to arrests and insecurity of businessmen in the past, Khatiwada said that economic activity will not increase unless it is improved. According to Khatiwada, there is a big challenge to the quality of credit and its productive use.
Citing the example of economic growth limited to 2-4 percent even when credit increased by 25 percent in the past, he said that the effectiveness of credit is weak. According to him, working capital, TR loans, loans to the disadvantaged group and directed credit programs all need to be reviewed.
Khatiwada suggested that instead of dividing the directed credit program into small sections, the loan should be 'packaged' and distributed to productive sectors as a whole.
