RAJENDRA KUMAR KHETAN, Chairperson of Khetan Group of industries and Nepal-Britain Chamber of Commerce and Industries, does not need any introduction in Nepal's industrial sector. Khetan, a young entrepreneur, was also a former member of the Constituent Assembly. Khetan spoke to New Spotlight on various issues related to the state of present economy. Excerpts:
How do you see the present state of economy after the announcement of the new budget and new monetary policy?
After a gap of many years, Nepal has had a budget presented by the government of non-political people. Since politicians, who have been elected from the people, have to fulfill many promises and commitments in preparing the budget, naturally the present government did not have that kind of constraint. Politicians are compelled to bring populist budget to make their slogan popular. However, the current budget is realistic, based on the reality of the country. This is more a technical budget. There are fewer issues to criticize.
What do you see in the budget?
In our country, we have practices to make budget as a fairy tale. I have been saying this for a long time. It should not be made a fairy tale. The development expenditure allocated in the budget cannot be spent without making local level institutions like VDCs and DDCs effective. Since the elections of local bodies have not been held almost for 16 years, there is a political vacuum. As long as there are no elected representatives, it is impossible to utilize the budget for development sector. If political parties make consensus on political agenda, why they fail to have similar consensus to carry out development programs effectively at the grass root level?
Do you think the budget addresses the current economic challenges, including unemployment?
No budget can address the unemployment or economic problems. Budget is just a document which shows how government allocates its annual expenditure in various sectors. The budget will show sources of money and detail out where such money goes. In other words, it explains the generation of revenues and foreign aid and way to spend them. It interprets how the budget money is spent and what the target areas are.
As a leading private sector entrepreneur, what do you want from the government?
The government needs to work as a facilitator for private sector. If the government's programs and plans remain private sector friendly, one can hope for many changes. However, the government should not create hurdles. The government’s job is to create a conducive environment as well as to create a secure situation. Only by shortening the political transition, Nepal can move ahead. Of course, this is the first time in three years that the finance minister presented the full budget. This is good but budget is not alone enough to achieve high economic growth.
How do you see the capability of private sector?
Private sector is capable in the country to generate employment. The role of private sector is yet to be effective. Even today, the revenue is coming from three main categories like agriculture, remittances and private sector.
Don't you think the government composed of non-political leaders may have introduced some new policies to streamline the economy?
We have to agree that the budget avoided populist slogans and it has presented realistic programs and plans. I have told you that the planning cannot be executed at local level without the involvement of locally elected representatives. Till the local elections are held, the government has to constitute political mechanisms to decide on the local development projects. If money is spent properly, it will also help the national economy to grow.
What is the cost of doing business in Nepal?
The cost of doing business in Nepal is much higher. The cost is higher in infrastructure and service delivery. The interest rate of bank is relatively higher. Due to prolonged political instability, there is confusion in the minds of people. Due to frequent general strike and bands, the cost of production is going high. Similarly, disruption of power supply is another major reason pushing Nepal back. In the economic development, there is still confusion about the public, private and community roles. We can solve all economic problems by addressing all these problems. Since this is not a political government, the government can introduce private sector friendly programs and budget. If this government removed constraints and difficulties, we can jump in.
As Nepal has been passing through a prolonged political instability, how do you see the prospects of economic development?
While analyzing the present political vacuum, what I can say is that many changes have been taking place for political change. Any political change needs to address contemporary economic challenges to make progress. If the government wants to strengthen the economic systems, it must address hassles, hurdles and constraints. This government can make a breakthrough. Instead of going for competitive industrialization, we need to follow economic policy with comparative economic advantages. For this, private sector needs to take a lead inviting government and political parties. We have to decide where the private sector has a role in achieving higher economic growth.