Improve the economy by looking at the calendar every day

Due to the failure to collect revenue as per the target, the government finances are continuously in deficit. The reorganized Council of Ministers is committed to correcting the shortcomings of government finances by effectively intervening in the budget system. It is not possible to say how the implementation will be.

As of Sunday, the total income of the government is only 6 trillion 54 billion rupees. This is 44.47 percent of the annual target, which is 2 trillion 13 billion rupees less than the target until February. The government had set a target of revenue collection of 8 trillion 64 billion rupees by February. According to the Ministry of Finance, the reduction in imports has affected the collection of customs duties, value added tax and excise duty. The statement of the government is not new. The question is why those problems that came to the notice at the beginning of the financial year were not resolved for eight months.

So far, the total expenditure of the government is 7 trillion 75 billion 42 crores. This is 44.28 percent of the annual target. The target is to spend 17 trillion 51 billion this year. So far, current expenditure is 5 trillion 73 billion, capital expenditure is 76 billion 71 billion, and finance management is 1 trillion 25 billion rupees. Thus, while general expenditure is 50 percent, capital expenditure is only 25 percent.

While the external indicators of the economy are strengthening, the internal economy is lagging. Remittance inflow continues to increase, even though the research and development situation is in surplus, industries and businesses have not been able to run at full capacity, infrastructure construction work is almost at a standstill, there is no demand for loans, and the morale of the private sector is weak. Despite favorable conditions in the financial system, including adequate liquidity and falling interest rates, the expected improvement in government finances has not been seen. The problem is that the government has wasted significant time by teaching the data that the external sector has improved. While external indicators have improved due to the policies of other countries rather than government initiatives.

Due to the control over the speed of credit disbursement, the large number of young people migrating and not being able to increase public expenditure, the demand in the market has not increased. The private sector has not been able to expand investment due to the lack of overall demand. Because of this, the economy has not become sustainable. Although the government has been claiming that initiatives have been taken to increase revenue, keep general expenditure within desired limits, increase capital expenditure, enhance allocation efficiency and the capacity of implementation mechanism, its effect has not been seen anywhere.

The government introduced various programs in the budget of the current financial year to improve government finances. It included a large number of projects and programs including improvement in resource allocation, detailed feasibility studies, land acquisition, etc., and inclusion of projects that can be implemented after completion of preparation in the annual budget and program. Most of these policies have not been implemented, and the effectiveness of those that have been implemented is very low.

The government's existing policy of bringing in foreign capital and technology and deploying it in economic development has not been effective. This is confirmed by the continuous decline in foreign direct investment and the domestic investors also not expanding their investment. A survey showed that even now about 56 percent of businessmen have postponed their investment plans. There is an urgent need to expand domestic and foreign investment by creating an investment-friendly environment. For this, public administration should be made professional, efficient and result-oriented. The government should encourage industrialists and businessmen to expand investment. Since private sector investment will not increase unless fair profits are ensured, the government itself should initially increase investment to encourage them. For this, the government can mobilize foreign grants and assistance, and can increase investment in infrastructure construction by taking an 'overdraft' from Nepal Rastra Bank.

The improving external sector has given the government ample opportunity to invest in infrastructure development. The newly appointed finance minister should show a strong will to use that opportunity. Even so, general expenses are increasing every year. More than 70 percent of the total budget has to be allocated just to manage salary allowances, social security, financial transfer, administrative expenses and increasing debt repayment obligations. This has put pressure on resource management for development.

It seems that the government has failed in the task of making the public expenditure effective through the proper utilization of resources, the government should also pay the remaining obligations to increase the capital expenditure, and the monitoring of large development projects should be intensified. There should be continuous dialogue with the private sector, coordination between intergovernmental bodies. The government does not have enough time for this. Only by looking at the calendar every day and evaluating progress can meaningful improvement be made.