The economic indicators available for the first nine months of the Fiscal Year 2078/79 show that the overall economic condition of the Nepalese economy is not satisfactory.
The macroeconomic situation, the current state of the economy, the prevention of covid and the problem need to be addressed. There is a need to advance the agenda of economic development and prosperity.
It has also become necessary and mandatory to identify and invest in projects with high and global relations. At the forefront of this are physical infrastructure plans and projects.
It is necessary to put the big and small hydropower projects in the second place. Another area of comparative advantage in Nepal is tourism.
Extensive investment in infrastructure is essential for its promotion. Tourism is the second most affected sector after Covid, although some progress has been made in this area recently.
The world is currently on the brink of the Fourth Industrial Revolution. It is inevitable that Nepal's industrialization should be developed in the same context.
In order to achieve this, the following priorities should be followed:
For the development and prosperity of the country, it is necessary to manage the multiple use of water resources. In which hydropower remains an important tool for economic growth and economic transformation.
At present the industry needs to supply uninterrupted electricity to the industry. Yes budget is expected to address undeclared load shedding.
It would be justifiable for the industries that consume more energy to reduce tariff proportionately and for export oriented industries to reduce the rate cost of energy.
It is necessary to provide electricity to the indigenous industries at the same export rate.
Commercialization of Agriculture:
No one should be worried about the need to radically improve the existing "ecosystem" in agriculture and increase production and productivity.
As about 65 percent of the people are directly or indirectly dependent on agriculture and the contribution of agriculture sector to the GDP is more than one third, it does not seem possible to develop the economy without the development of agriculture sector from Nepal's perspective.
Small farmers should be included in cooperatives and encouraged towards commercial farming. It seems that a conducive environment should be created for marketing of agricultural products, and the right to cultivate and produce, collect and sell herbs should be given to the community forest.
Similarly, markets and processing centers should be set up in every ward to process and sell the products produced in Nepal.
The current agricultural subsidy system should be improved as it is cumbersome. Tourism Development:
Nepal is also one of the potential countries in the world in terms of tourism development. Education and health should be linked with tourism. If the tourism sector can be developed, the country can make a leap in economic development.
New programs should be introduced to attract not only foreign tourists but also religious and domestic tourists.
In particular, priority should be given to infrastructure.
The investment conference held a few years ago has significantly communicated Nepal's investment potential at the international level. There is a need to attract foreign investors in industry, business, physical infrastructure, energy and services.
In order to attract foreign investment in the country, special priority should be given to the creation of investment friendly environment. Therefore, a clear program should be brought in the forthcoming budget.
The suggestions taken for the budget should create a conducive environment for Nepalis living abroad to invest in stocks to attract foreign investment, and attract NRNs to invest in the stock market.
Towards self-reliance: Nepal's economy is based on dependency. We are also dependent on imports for commodities with ample potential for production. For example, we are directly dependent on imports of agricultural commodities, energy, daily necessities and forest products.
Through the forthcoming budget 2079/80, a planned program should be brought to make Nepal self-reliant. For the rapid economic development of Nepal, it has become necessary and essential to start industrialization by sincerely following modern economic principles, building advanced capital-intensive manufacturing industries, establishing modern financial system or establishing modern institutions to support it.
Nepal cannot take more excuses for underdevelopment by blaming internal distortions, policy failures and land conditions.
Economic transformation requires supportive state mechanisms, sound development strategies and sound industrial policies.
It would not be an exaggeration to say that leadership and implementation is the main challenge today rather than the policy act.
Recently, some private sector manufacturers in Nepal, who import most of their raw materials and produce them in Nepal, and entrepreneurs based on Nepali raw materials are giving priority to the "Make in Nepal-Swadeshi" campaign with the aim of making the nation self-reliant.
It has been made public that such a proposal from the government is welcome coming from the private sector. The Government of Nepal is of the view that the private sector should be involved in this campaign.
The use of such items can be increased as the government has introduced incentive programs such as 50 percent rebate on electricity tariffs used by textile industries registered in value added tax and 5 percent interest subsidy on bank loans to encourage domestic production. But such clothes should be used by the police, Nepal Army and government employees to create a proper environment of value and quality. Industrial development:
Due to the rapid industrial development in India and China, the two neighboring countries with large economies in Nepal, Nepal has witnessed negligible development. Due to lack of development of industrial sector, more than 90 percent of daily necessities have to depend on imports.
Budget should be allocated with proper policy for the development of industrial sector. Due to energy crisis, flexible labor policy and lack of necessary investment friendly environment, industrial development has not been possible.
The private sector says that industrialization should be promoted by encouraging industries that add more than 30 percent value and help in import substitution.
Development of Physical Infrastructure:
The overall economic development of the country cannot be achieved without the development of necessary physical infrastructures. On the one hand, there is a need for construction of major roads and highways and on the other hand, it is necessary to pay special attention to the maintenance and upgrading of existing highways and roads.
Necessary projects like Nijgadh Expressway, Kathmandu Hetauda Tunnel Road and Postal Road in Kathmandu should be expedited.
Sufficient funds should be allocated for energy production and construction of transmission lines, drinking water, irrigation and roads.
The trade deficit in Nepal's economy, which is currently very weak in terms of production, continues to grow. Necessary budget should be allocated for research and study required for production and export of competitive goods.
Special monitoring should be done to make exports easy, simple and regular. The current export subsidy should be applied to the exports of all countries including India and the export subsidy should be 15 percent.
Exports made by business firms should be facilitated in the same way as exports made by industries. Although the laboratory building under construction has been constructed in the Regional Food Research Offices, it has not been able to come into operation due to lack of machinery and technical manpower.
Effective capital expenditure:
It is not a new thing to say that capital expenditure should be on time. In this regard, effective monitoring should be done by the National Planning Commission or the unit in the Prime Minister's Office and it seems to be more effective if the private sector is also involved in the monitoring. Therefore, the annual budget of capital expenditure has to be spent on time with monthly target. It seems that the customs duty on raw materials, which has always been demanded by the entrepreneurs, should be three tier less than the finished goods, and the provisions guaranteed by the Industrial Enterprises Act 2076 should not be deducted by another act.
It is okay for the Ministry of Finance to be a super ministry but the Ministry of Industry should also be given its role to play.
The country is currently facing an acute shortage of liquidity. There has been a demand in the sector to manage tax credits in imports like passbooks.
Arrangement should be made to take loan and sell the land beyond the limit by pledging it in the bank. As it is difficult for industries based on natural resources to exchange land, it is necessary to arrange long-term lease.
Regarding the implementation of Contribution Based Social Security Act 2074, the Bonus Act 2030 also needs to be amended.
Encouragement of private sector investment:
The private sector seems to be discouraged from increasing investment in the country due to the regular monitoring of revenue research and monitoring of internal revenue for some time now.
Special attention should be paid to create an environment of clean business-clean administration by trusting its industrialists.
It is suggested to increase the scope of personal income tax exemption slab. Although the government changes the budget structure every year, people understand that the budget is not effective. The policy direction to be followed by the budget
The government has an important role to play in formulating and implementing economic policies and programs for the economic growth of the country as well as for the rapid development of the economy. In the case of Nepal too, the economy has not been able to take the expected pace due to unsatisfactory implementation of policies and programs for formulating policies at various times.
The government has an important role to play in formulating and implementing economic policies and programs for the economic growth of the country as well as for the rapid development of the economy. In the case of Nepal too, the economy has not been able to pick up the expected pace due to unsatisfactory implementation of policies and programs for formulating policies at various times.
Since the economic growth rate targeted by the budget is not enough to achieve, it is imperative to make radical changes in governance, including various aspects of the law.
New arrangement related to revenue leakage control
Strict Act has been proposed to control revenue leakage. The private sector is of the view that the provision of imprisonment for even the crime committed by mistake should not give the impression that there is no environment for conducting business in Nepal.
After the preparation of the next five years, Nepal has got time to move from the least developed countries to the developing countries. The guidelines issued by the National Planning Commission have mentioned that the budget and programs should give priority to that context as well. According to the guidelines of the Planning Commission, "programs and budgets should be formulated giving priority to the revival of the socio-economic sector, creating productive employment and increasing productivity and productivity and ensuring an equitable distribution system." Supply chain
During the global pandemic in the supply chain, the supply chain in the world has been shattered, and today we are seeing in particular the issue of the supply chain shaking the world economy.
In the current situation, the finance minister has not been able to formulate an open and detailed budget. The problems created by the Covid-Russia-Ukraine war and the limited resources available to the budget have increased the likelihood of a budget shrink, and foreign aid is likely to decline.
Successful implementation of MCC will be a major challenge Therefore, it would not be an exaggeration to say that this time there is a situation of making budget by shrinking, not by opening the mind with open hands. While past budgets have focused on reducing fiscal deficits, most sectors are currently in deficit due to the Covid-19 and Phase III pandemics, and rising petrol prices.
Therefore, our economy is out of track with focused growth. The common man is suffering from a lack of liquidity. The government should inject liquidity into the system so that our country can move forward with a fast-moving economy based on consumption.
The budget should be extraordinary and unexpected and exciting so that it can be remembered as the budget of the decade. Covid 19 has changed the way the budget is presented. If you want to learn from neighboring countries, you have to present the current budget be paperless i.e digital.
Focused sector micro, small and medium enterprises, startups
The government should focus on small and medium enterprises, as Covid 19 and the oil price and supply chain have suffered so much that it is pointless to calculate. Small, medium and large enterprises, startups are a great source of employment.
Micro, small and medium enterprises, startups have to take very important steps. The government should simplify compliance so that taxes look like simple taxes and allow entrepreneurs to focus on their core business.
Currently the most important source of employment and a part of daily life. In the current scenario, e-commerce sector has become the third largest sector in our country.
It mainly depends on petrol and diesel costs, which in turn increases operating costs for the transport sector. Petrol and diesel prices are mainly subject to central taxes. MSMEs should be subsidized so that they can reap good results.
Singh has completed MBA PGDIM from Delhi School of Economics