"Government does not believe in regulation and control, it mediates"

Although he became the finance minister for 18 months 12 years ago, he did not have the experience of bringing a complete budget. They are getting that opportunity this time. As the economy is in extreme economic recession, infrastructure construction works are almost at a standstill. The state of government finances is critical. The private sector, which contributes more than 80 percent to national capital formation, is not confident enough to invest. Krishna Acharya of Kantipur with Yagya Banjade with the newly appointed Finance Minister Varshaman Pun on the future of the new alliance, action plan, economy reform plan, private sector morale increase, meter interest, cooperatives, microfinance problems, etc. A conversation with break :

After breaking the alliance with the Congress, how did the Maoists have to form a new alliance with the UML and other parties?

Prime Minister Pushpa Kamal Dahal has a strong desire to do something about good governance, economic development, social justice, etc. This situation has come about because the old alliance party could not tune in accordingly. In its background, the Chief Minister of Koshi Province, the election of the National Assembly and some issues raised in the Congress General Committee meeting have also played a role. This situation has arisen due to the debate within the Congress on the issue of secularism and non-alignment. It is not unusual to search for an alternative after the debate has started that tomorrow we will have an alliance or not, but from today we will not have an alliance.

It is not right to have a big party from the alliance and now to argue in a way that insults fellow travelers of the alliance. From the Maoist point of view, we also have a great contribution in the political change of the country. We have a history of accompanying peace processes. The irrelevant comments made while saying that we will finish the rest of the peace process together have accelerated the building of a new alliance. There is no desire, effort or any other reason for this. The recent developments have brought it to this point when the Prime Minister is not getting support and the team is not coming together according to his idea of ​​working instead of changing ministers. There was no pre-planning. A team with a little more consideration has been chosen so that quick delivery can be given as per the Prime Minister's thinking while working.

The prime minister had said that he would reorganize the cabinet. However, in the new cabinet, Congress members were removed, new parties were added, but no new faces were seen except for you in the Maoist context. Looking at it this way, did you break the alliance for the sake of bringing you into the cabinet? In particular, it seems that only Congress ministers are trying to be removed, isn't it?

is not the only reason why the alliance is broken. It is natural to say that there should be ministers from the Prime Minister's party or from the party whose rhythm and vision are compatible with the Prime Minister's party in the Ministry of Finance to balance the international relations for the benefit of the nation in the world and in order to balance the international relations for the benefit of the nation in the world. Such practice can be seen in the international world as well. Joint effort or contribution of the mentioned ministries is essential for good results. Rather than bringing in certain people and bringing the ministry under his control, the prime minister is trying to change the cabinet to increase delivery capacity.

It is said that it played an important role in breaking old alliances and making new ones. You were also mediating the talks between the Maoists and the UML president. How long has it been agreed to maintain the new alliance?

We are the parties created by CPN before. After the dissolution of the CPN, there was a great disappointment among the Nepali people. The constitution was made, one party formed the government with a majority, now the attention of the state is focused on economic development, it was expected that jobs will be created and economic development will take place. The then government tried. At that time, the CPN was disbanded. After that, if the old parties were able to meet the expectations of the citizens, the new parties would not have space in politics.

It is our conclusion that the disappointment spread among the people is due to us and we should self-examine the past and move forward with cooperation. We have left it open as to how far we will go in cooperation. We have not rushed to unite the party and continue the alliance for a long time. The first priority of the coalition is to assure the citizens that continuous service delivery is possible in the country. The chairman of the National Independent Party has also fully discussed the current issues of good governance and service delivery. The Prime Minister is confident that the country can be built by making use of the enthusiasm, zeal and energy of the ministers of the new party. We were together in other campaigns in the past with small parties like Jaspa and S.

In terms of sending ministers after the new alliance, UML does not seem to have sent any high-profile ministers. The question has also been raised from the perspective of whether the UML viewed the agreement of the alliance a little lightly on this issue?

is not like that. The ministers from UML are experienced. Raghuveer Mahaseth is an experienced leader who has previously worked in the Physical Ministry and is also an executive level leader in the party. Others are zealous and tested. There are friends who are expected to do something because they are new.

There was a lot of tussle in the allocation of the Ministry of Home Affairs, especially about giving/not giving to the National Independent Party, didn't it?

There was no tug-of-war in the distribution of ministries. There has been a general discussion whether to keep it with the Prime Minister. But there was no dispute. RSVP has come with new vigor and vigour. Experience is also required to work. We believe that we can deliver better when that happens.

RSVP leaders have publicly said that they will open dozens of corruption files including cantonment, circumcision, fake Bhutanese refugees. It is said that this became the main agenda even when forming a new alliance. What was your opinion on this?

The RSVP did not have any such agenda during the coalition building process. The new party did not even say that they are looking for all the old ones. The main thing is to do something new now. All is not well by prosecuting the old. You don't make yourself taller by looking down on someone. Even the friends of RSVP know this. We discourage old perversions. It is mentioned in our manifesto that we should investigate the assets of all those who have been in public office since 2004. It may also be in the manifesto of other parties. Gold is being investigated. A judicial investigation is also ongoing as the investigation has not been completed. We are ready for further research on any topic. But research should be within its scope. It didn't happen just by waving at ten. There are different bodies that look after each area. As a result, no body can be arbitrary. The Prime Minister is in a hurry to conduct such investigations.

It seems that some of the Chinese gang members in the gold smuggling case are also close to your family members. Some details of your involvement have been made public. Does the Ministry of Home Affairs have the freedom to investigate you? Can this government conduct an impartial investigation at that level?

As soon as this matter comes up, I have asked for an independent investigation. The Prime Minister has said in the House that even if he is a member of my family, the investigation will continue and no one will be spared. Even though the names of many people from the Prime Minister's own party came up, the investigation did not stop. Instead, when the names of other party members came up, the investigation did not proceed. If the name of any of my relatives or family members comes up in the investigation, I am ready to inform whom and where. No one should have the illusion that they can get away with being guilty in the current situation. Also, we ministers are sitting in a glass house, visible from everywhere. Now that people have a critical awareness, there is no situation to escape the guilty.

The Prime Minister has been saying that even though he wanted to deliver, he could not because of the Ministry of Finance. It seems that the Ministry of Finance has not been able to raise the hopes of the private sector, especially the government finance reforms. Now you have come to the place of work. He was in this ministry 12 years ago. Where do you start the improvement work?

Interestingly, I am the finance minister who has not been able to bring the budget even after working for 18 months. I brought two working budgets but could not bring a full budget. Inter-ministerial coordination in development work and ability to collect revenue has been tested. In terms of revenue collection, I am the second highest collector among the previous finance ministers. I know that I will be tested on the new budget, policies and programs, revenue policy.

The global recession of 2008 also affected Nepal in 2011. I have the experience of working to save the economy at that time. After the earthquake of 072, the impact of covid has started to tighten the economy which is in global trouble. I have come at a time when the Russia-Ukraine, Israel-Hamas wars have had a major impact on the world economy, and its impact has been seen on the Nepali economy. The goal of

revenue collection is much higher, but it is currently collected at around 10 percent, and it is believed that it can be increased to 20 percent immediately. Public finance also has a problem with capital expenditure. The government has been heavily criticized for not being able to pay its obligations in the past, not being able to pay enough to eat, and not even being able to cover simple expenses. Improvement works have started in these matters. After assuming office, I have done the first briefing with the Budget Division. Capital expenditure can be increased and liabilities created can be paid. The government budget is in a state where it can be said that the development ministry can spend it with confidence. Resources can be managed.

There are various rumors in banks and financial institutions. But the condition of financial institutions is good. It seems that people who take billions of loans but do not pay, and who should be blacklisted according to the law, are walking as big protestors. Such tendencies should and are discouraged. No one is allowed to take a loan from citizens' money and use it arbitrarily and walk around shouting that they don't have to pay the bank's money. In order to protect citizens' money, the government takes strict measures to discourage such activities. For borrowers who have taken loans from microfinance, cooperatives, etc., but are unable to pay due to circumstances, policy arrangements should be made easier. The work has started by making a law to solve the problem of fake meters. Payment problems of dairy farmers, businessmen will be solved soon.

It is being said that the government has not paid the builders who have cut checks after the work is completed. About 10.5 billion for corona insurance, about 9.5 billion for interest subsidy loan program, about 3 billion for agricultural insurance have not yet been paid. Now when do you understand that all this will pay off?

All obligations committed by the government are paid. Therefore, the obligation does not mean non-payment. The state is a continuation, so the obligations created by the previous governments have to be paid by this government. If the personal liability is transferred to the family or relatives, the liability created by one government does not mean that the other will not pay.

Prime Minister Dahal and outgoing Finance Minister Prakasharan Mahat have said that the economy is on the road to recovery. However, the private sector claims that the economy is in recession. What is the state of the economy?

The economy is under some pressure or stress. The economy has slowed down, but it is not in crisis. In a recession, there should be negative growth. Economic growth is around 3.5 percent for the first quarter. Various international donor agencies have predicted an economic growth of more than 3 percent in the financial year. This also confirms that the economy is not in recession. The next task is to increase the speed of the economy, for this we coordinate with the regulatory bodies. Actions will be taken against the development spending agencies if they make a mistake, not regretted in advance. The regulatory body of banks and financial institutions also did not unnecessarily tighten the policy.

As you have indicated, the private sector has also been accusing Nepal Rastra Bank of such policy strictures. The previous finance minister had also been raising these issues. Rashtra Bank is an autonomous body. Now, how will you facilitate such policies of Rashtra Bank, its responsibilities and operations?

Autonomous bodies are also not outside the principle of statehood. Apart from the constitutional bodies, all the bodies of the state remain under the executive. But these bodies are autonomous in their functioning. The political leadership should not interfere in the day-to-day operations and let them work independently. Akhitar, Rashtra Bank, Bima Samiti and other agencies will facilitate that sector and give everyone equal working opportunities. No one can be pakha and no one can be kakha. We coordinate so that you regulate your area according to the policy given by the Prime Minister and the government. We suggest, we inspire for implementation. Any regulatory body should not stop the government when it tries to work, or stop it when it tries to encourage the private sector. But the executive should make such policies so that the regulatory body can work autonomously.

Good theoretical analysis about regulatory bodies. When you understand that you can move forward with effective coordination with the Governor of the National Bank?

The governor is an executive (finance minister) appointed by the government. One of the functions of the Ministry of Finance is to operate the National Bank. In Rashtra Bank, the government sends four directors, three from outside and one as the Finance Secretary. No finance minister can say that the majority sent their people to the policy making place and the governor did not help. In the current structure, even if the governor wants to, he cannot do it on his own. The government formulates the financial policy and the National Bank formulates the monetary policy. The overall economy will be operated through the effective coordination of these two. As for the current governor, I have worked with him in the past when he was the deputy governor, when he was the chief executive officer of the board of investment. So there is no problem.

The situation of revenue collection is very poor. The revenue collection for 11 months of the current financial year is barely enough to cover current expenses. Capital expenditure and foreign aid and subsidies have also failed to meet the target. You have said that you will immediately increase the revenue by 20 percent. What magic do you have?

Imports have decreased compared to the past, market demand has decreased. Without panicking the market, there is room to raise revenue by increasing the scope without increasing tax rates. By streamlining tax administration, increasing market regulation and monitoring, and making tax policy compliance more effective, revenue will increase. Increasing tax literacy, making tax administration more agile, even if there is a small effort for reform by the leadership, it is possible to increase the revenue by 20 percent in the near future. A large part of the revenue received from customs was from vehicles. The increase in popularity of electric vehicles has resulted in a decrease in revenue. About 35 billion revenue has been reduced from the auto sector. Instead of

vehicles, other alternative areas of revenue will have to be found. There is also a trend of low digitization. We create an environment that makes billbiz the right way. If there is a problem in personnel administration, we will also improve it. We assure the industrialists that they should do business transparently, and the government will facilitate it. Capital expenditure has also been reduced. Unions increase their spending power. We encourage to increase the spending capacity of the state and local level. There is a situation where the association should facilitate the state and local levels in forest and land acquisition necessary for development. By doing this, the expenditure naturally increases, the market becomes active, the employment increases, and the purchasing power of the citizens increases. Overall it increases the revenue.

Although it is the second innings as the finance minister, he is getting the opportunity to bring the budget for the first time. There is a growing trend of making budgets on a whim and making heavy cuts through half-yearly reviews due to the inability to raise and spend resources. How are you streamlining the budgeting process so that you don't have to make drastic cuts within 6 months?

While passing the current budget, policies and programs last year, Prime Minister Dahal promised to include the suggestions from the discussions in the parliament in the budget. According to which, the government has already submitted the principles and priorities of the budget to the parliament three months ago by changing the schedule of the budget through Adhyadesh. So far, the topics discussed in the parliament could not be included in the budget. This is the reason why when their suggestions were not included in the budget, there was an uproar at the time of passing.

My plan is to make an inclusive budget by discussing the principles and priorities presented in the parliament and the suggestions and discussions with the stakeholders. Budgeting is participatory. Objective rather than mysterious and ambitious. This time the tax policy is also discussed in the parliament. Tax rates were changed only a day/two ago but policy and principles will be openly discussed. We bring the budget with an analysis of why taxes have been increased and decreased. A reasonable sized, objective and expendable budget comes in.

According to the new schedule, the principles and priorities of the upcoming budget have been submitted to the parliament. Meanwhile, a new alliance was formed, will you continue the old one or make a new one?

Since there is no change in the prime minister but only the change of ministers, the discussions proceed based on the principles and priorities that have been submitted to the parliament. However, through discussions with the new alliance partners, improvements can be made that are legally and practically compatible. On the other hand, the provincial and local levels have not been able to spend properly. We encourage them to do development work by giving them sufficient resources to enhance their capacity. 12 years ago, the budget was barely 5 billion, now it has reached more than 17 billion. But the budget spending structure has not changed. Therefore, before asking for good results, the necessary infrastructure and structure should also be given.

You have come to reform with the private sector. However, the poor morale of industrialists is not improved due to adverse conditions. This year, 55.32 percent of businessmen have postponed investment plans. How do you increase the confidence of the private sector?

First of all, we will amend the laws and regulations that make it difficult for the private sector to work. We are holding an investment conference in the near future. It is a mistake to think that foreign investors will come in when domestic investors are feeling insecure. Therefore, at the beginning, the morale of the domestic investors should be increased by reassuring them and encouraging them to invest more. We remove barriers to investment in law, practice, etc. The private sector also wants the continuation of the policy. When people change, the normal working style may change, but we do not allow the basic policy to change.

We will not allow big changes in matters such as domestic and foreign investment, tax policy etc. For example, in 2065, the government has arranged to give full income tax exemption for 10 years and 50 percent income tax exemption for the next five years in the hydropower sector. Because of the stable policy, private sector investment in hydropower has increased now. We have become self-sufficient in cement production due to the government's policy of providing roads to cement mines and electricity to industries. Information technology has come as a new field. We will encourage more such areas. Two-thirds of the people are engaged in agriculture. But the contribution of that sector to the economy is constantly decreasing. We are working on improvements in this area. Since the policy is made by including the suggestions of the private sector, the policy is not only of the government but also of the related sectors.

The complaint of the private sector is that the government arrested industrialists. They say that there should have been 'Soon and Thun' but the government adopted the policy of 'Thun and Sun'?

The beauty of democracy is that the state can imprison anyone who makes a mistake. No one is above the law. If a question is raised about someone, it should be answered. Even the private sector is not above the law. A person or an organization can make a mistake but not a whole community. The private sector has contributed to the state by doing industrial business. Even the private sector did not think that one industrialist was prosecuted. The state will first listen for a long time, then choose only if found guilty. The principle of criminal justice states that 'not one innocent should go free, but nine guilty should go free'. The government also works on this basis.

The study shows a 37 percent decline in overall market demand for industrial products. Why did this situation happen and what is the government's plan to improve it?

The Ministry of Finance will not play a direct role in increasing the market demand. However, we are sensitive to making the overall economy dynamic. As the economy improves, employment opportunities increase, as citizens' income increases, purchasing power increases and market demand automatically increases.

Due to problems in cooperatives and microfinance, the economic activity of citizens in the lower part of the economy has also been affected. Big banks have not reached that level. There was no balanced policy in these areas. Sometimes very strict and sometimes very loose policies were made. Now by solving the problem of this sector, the income of citizens can be improved.

What happens when you understand that the problems of meter-banking, cooperatives and microfinance will be solved soon?

We solve the distortions of these areas quickly and with options.

Nepal has met only less than half (about 45 percent) of the standards set by the Financial Action Task Force (FATF), an international organization that oversees money laundering and financial crime control. The law has not yet been passed. Even if the law is passed, if the implementation aspect is lacking, it seems certain that Nepal will be on the "grey list" right?

12 years ago I brought up the 'Grey List' from Sanghar. Now the same risk has increased again. To rise from that situation, the government has passed an act from the House of Representatives. The remaining work is in progress. Therefore, we will not let Nepal fall into the 'grey list'.

There has been no improvement in the stock market and real estate sector for a long time. What are the plans to improve these areas?

The Prime Minister and I are positive about the stock market. It has helped a lot in overall capital mobilization. I will do all the reforms needed to bring this market into shape. My priority is to take suggestions from the National Bank and other agencies, give instructions, and increase the morale of more than six million investors. Even though the interest rate is falling, the stock market has not been able to increase, it will be corrected by finding out whether there are any policy deficiencies.