A way to improve a depressed economy

This is also confirmed by looking at the external sector balance of about 20/25 years ago. Strengthening the external sector means that even though imports and exports are increasing, the trade deficit will be reduced, the growth of exports will be faster than that of imports, thereby reducing the trade deficit and based on that, the overall current account deficit will be reduced and the current account balance will be in surplus.

Since two years, exports have decreased by 40 percent and imports by 22/23 percent. Many businesses, especially agriculture and industrial production, are based on imported raw materials, machinery and capital goods. Certificates for such goods are not opened, there is no internal demand, trade is reduced, the import of petroleum products is reduced, the transportation will be reduced, due to this, the demand for petroleum will be reduced and the signs of recession are now in the external sector.

If we forget that people who go to work abroad send some money and some foreign currency is brought in from tourism, now the external sector is not good in any way. Because the condition of foreign investment, government subsidies and loans is critical. The service sector is in loss when it should be in profit. Nepalese spend three times more than the foreign tourists in Nepal. Now we are no longer afraid that US dollars will not be enough to buy essential materials including medicines. The government has called it a strong external sector. However, this is not a sure thing. Unless exports of goods increase and imports increase, the overall trade deficit will not decrease due to increased exports. A decrease in trade and an external balance is not a sustainable improvement in the economy.

The state of government finances is very weak. Even now, the government has reduced the size of the budget by a large amount through the semi-annual review. As far as I know, this is the first time a review has seen such a budget cut. Although it is called an amendment, it is actually a budget reduction. The language of the government is amendment, but what the parliament will understand is that the budget allocated by us was cut within 6 months.

Based on the half-yearly review of the current financial year, when the budget for the next year is submitted on May 15, the revised estimate is going to decrease significantly. Revenue estimates are not forthcoming. Only in the case of an average revenue increase of 15 percent in the remaining period, the revenue can increase from 960 billion to reach the target. However, it is not seen that the revenue mobilization will increase by 15 percent when the imports are reduced. Now the target of revenue collection has decreased from 14 trillion 22 billion to 12 trillion 2 billion, now in the revised estimate it will further decrease to below 11 trillion. However, the government may put a little more in the revised estimate to hide the shame. Thus, when 3.5 billion revenue is reduced, 3.5 billion development projects are affected. The conflict between the Finance Minister and the Prime Minister begins here. The project had to be cut after the revenue decreased. Resources are ensured and budgets are allocated to what is not needed. Thus, the overall government financial system is damadol.

Although there are some structural reasons for this situation, there are many administrative reasons. How was random staff reshuffling in the revenue group? How was the customs administration put to shame? How did the balance between the police and customs personnel in the border administration (region) deteriorate? How has the economy as a whole been made opaque, informal and illegal? Now it needs to be accounted for. During this period, the import of some goods was stopped, the customs rate was increased, and the value added tax (VAT) was imposed, but the revenue did not rise even though the business was informal and uncontrolled. This is not a structural issue. It is a matter of weakness in the government's revenue administration. People who understand the revenue are not in the personnel administration, this situation has come about because the minister has not been able to proceed with the work with a clear vision. It would have been a satisfactory place even if other areas had improved and only the revenue had deteriorated.

The government has now raised about one and a half billion domestic debt. Even to collect such internal debt, the revenue and internal resources have to run to meet the current expenditure. If the next one billion is not raised before the third quarter, there is fear that the money given to the state and local levels will not be enough. Therefore, going into the third quarter, the government should again cut spending, stop payments. The government has not been able to pay the builders. The government says it is only 5 billion, businessmen say it is 50 billion, but in reality how much is left to be paid? Interest subsidy, subsidy for agricultural insurance fee, health insurance, other sectors which are said to be subsidized by the government have not been paid. Due to this subsidy issue, there has been a problem in determining the minimum price of goods. Farmers have started pouring milk on the road.

Customs rates should be adjusted to protect even if it is a little bit. When these things are not done, the balance between the government's expenditure and revenue is getting worse. Now some big donor agencies have external aid commitments, it should be mobilized quickly. However, now the relationship between the government, especially the Ministry of Finance, is very weak. Those in the government should not understand the principles, recognition, lending method, decision-making process of donor agencies and do as I say. Foreign aid is about 'negotiation'. There is a 'give and take' in it. MCC who closed the deal with a blind eye did not say that now the debt is too much and they need not a loan but a grant from the World Bank, ADB and other agencies. Donor agencies don't just give grants. Disputing about taking grants, choosing to take loans, taking MCC and not taking BRI raise doubts.

Recently, there has been a problem in moving forward with projects based on foreign aid mentioned in the budget. Donor agencies do not believe and the government does not have a matching fund. As a result, 40 percent of the budget has been spent. It should have been around 54/55 percent by now. The revenue should have been raised by that much. The expenditure should have been 55 percent but it is only 40 percent. Once spending was reduced, there was no room for deflation through public finance. It did not go through government finance either.

High interest rates caused a lot of commotion in the financial system in the past. Right now interest rates are close to single digits, there is enough liquidity but the demand for loans has not increased. Why do businessmen not want to invest? In order to keep the economy running, land auctions were opened, partially some land may have been bought and sold but its positive effect was not seen in the economy. Is the way to improve the economy only real estate, stock market? Why could not increase production? Why did not increase the production of many grain crops other than rice in the agricultural sector? What is the status of industrial production? Industries related to construction are running at one-third capacity.

The condition of the import substitution industry is also weak. There is a situation where the industries are not running at their capacity, even though some hotels are running, there is no increase in value added. On the whole, due to the problems in the industrial and service sectors, the credit flow has not been able to flow from the banking sector. However, now hydropower loans have flowed from the banking sector. Looking at the data, if the investment in hydropower is removed, the average bank loan has increased by only 3 percent in two years. Average inflation during the same period is 7 percent. This shows that credit has contracted in real terms. Normally, businessmen had to take a loan of 107 rupees to sustain their old business, now they are taking only 103 rupees. This has reduced the business by around Rs. It also shows that the financial system is in recession. Even if the interest rates are reduced, working capital loans and small loans are relaxed, the business world is not convinced. There is a ambivalence among businessmen that we are safe by investing in the economy.

Here is the economic and psychological problem. The problem of financial aspect comes sometimes but the psychological panic has not gone away since two years. Why did this happen? The government will not do anything about the activities of distributing uninterrupted licenses in favor of some traders, fixing tax rates in favor of some, imposing administrative bodies in favor of others and threatening industrialists from the so-called entrepreneurs? Psychologically, the government should be able to give everyone the impression that they have the same vision. That is why the credit of the banking sector cannot increase now. The overall banking sector is sound in terms of capital. But the non-performing loan is down, it is certain to increase till next June if current guidance remains. Therefore, there is a need to keep more provision for non-performing loans, some have to increase the risk burden, and the capital fund will be under pressure, that is the reason why the banking system is reluctant to invest more. As a matter of fact, the banking system is 'overheated', so now the banks have slowed down the credit expansion. It seems that the economy will remain in recession for some time due to such activities of the bank.

problem

Some improvements have to be balanced. What are our priorities on issues related to climate change and issues related to hunger or poverty? The effects of climate change will affect the next generation, but before then people are dying of starvation here. In such a situation, the government should address hunger first. First you have to eat rice and then live in a clean environment. Whether our tax system goes towards feeding food or clean air to starving citizens should be considered.

The government made the tax rate very low because we produce electricity and its consumption is done by electric vehicles. Now the government is taking notice. The government spread so much noise in the field of electric vehicles, which does not cost even 200 megawatts of electricity, due to which on the one hand the revenue was reduced, a lot of foreign currency was withdrawn and traffic jams on the roads increased. However, the country's pollution has not decreased significantly. We have said to go to zero carbon by 2045. Accordingly, a step-by-step plan could be developed. The result of hurrying is now visible.

Similarly, the practice of blindly verifying sources has increased. How much will the next year's development expenses be after ensuring resources of more than 6 billion? Although 6 billion resources are assured for three years, the capital expenditure is only 2 billion. After having already committed, what will the Minister of Finance bring a new program? Our budgeting system has this problem. This is also a problem created by the government itself.

Liability for social security is another problem. If a government increased the amount of social security to be popular, it can be criticized, but reducing the age of 70 to 68 should not have imposed such a heavy burden. Now it is heard that the opening of the health center is over. Let's also manage manpower in this area. Reducing health infrastructure but increasing the burden of social security did not make anyone unable to speak. Health care is the best social protection. Why didn't we go this way? Why the health insurance? Why are employment and grant programs confused? Even though some good programs are kept in confusion, people have negative thoughts about development programs.

There is also a problem with coordination between government agencies. Working in a coalition government is not so easy. However, a common point can be found. For the first time in the history of Nepal, I am witnessing a situation where the disputes between the prime minister, finance minister and other ministers of the coalition government are so heated. This situation has arisen when those in government are not supposed to work towards a common minimum point.

solutions

The government should be able to spend the resources it has. It is said that 5 percent of the portfolio of donor agencies has been spent this year. While the portfolio is more than 5 billion. More than 2 billion can be spent this year. Therefore, more external resources had to be mobilized. It happens when the government takes overdrafts within its borders along with internal debt. At present, the government can take an overdraft of around 40/50 billion rupees. With that amount, the government can pay the rest of the liabilities, including builders' money, agricultural insurance subsidy, subsidized interest on subsidized loans. When the government promotes the construction work, the business of construction materials increases. Production and employment increase. The economy can become viable.

Now monetary policy has given space. Everyone knows that bad loans are on the rise. If the risk of bad loans increases, then the risk of the loan should be increased. As a result, the lending capacity of the bank decreases. Therefore, the National Bank should open the way for the credit flow in the banks without going on the path of increasing the capital fund. It is also possible that the tight monetary policy will be continued, but sometimes the diamond should be broken. Bad debts are to make a strong arrangement to do not make a lot of long, but if the banks cannot invest in the capital cells, the number of banks cannot invest in it. & Nbsp;

NRB should be taken place to flow up to the loan to money in the bank by mid-Julyan. Although 11 percent of credit expansion expansion of expansion expansion has dropped, only 3 percent has flowed. Therefore, it should be made policy arrangements to increase credit. The government should be able to address the direct activities of the banking system, business, any of the banking system, or sect, should be able to address directly. The government had to move forward to reduce the risk of capital escape by creating intimidation.

should be able to increase foreign investment and to make a lot of legal refor. At the winter convention, more law should be used in building a law rather than the budget. & Nbsp;

overall, all must work hard. The recession of the economy cannot be eliminated by the molest of the private sector. Although the government had increased the cost, it had to break it slowly or increased the morale of the private sector, and it was to be released by increasing the morale of the private sector.

- Khithawada is the Emergency Minister.

(राजनीति मात्र होइन, उद्योग, व्यवसाय, कृषि, शिक्षा, स्वास्थ्य, पर्यटन, बैंकिङ, सिनेमा, साहित्य सर्वत्र अहिले निराशा छ । देशले यो निराशाको भारी लामो समय बोक्न सक्दैन । सजीव विश्वास प्रवर्द्धन गर्न कान्तिपुरले सुरु गरेको छ विचार शृंखला– 'Export When Various Experts will be written by different experts, constantly preposition, constantly.)