By Pushpa Raj Pradhan
Finance minister Yubraj Khatiwada has presented miserable picture of our economy. It is not a surprise that we all were aware about the down-trading economic indicators presented by the Nepal Rastra Bank. Our foreign trade was negative by many folds, remittance revenue was declining and more seriously, the balance of payment was seen negative. When balance of payment falls negative, it is an alarm on the economic health of any country. Khatiwada, in the economic white-print, has compiled all these negative things but he has failed to prescribe medicines to recover the economic health of the nation. Going through the white-paper, one can understand that our economy is seriously ill and needed to adopt emergency measures to rescue the economy. It seems,Khatiwada, by presenting such a gloomy picture of our economy, is trying to beg foreign aid without introducing emergency measures to rescue our economy.
Where went wrong?:
It is clear, the government has adopted the economic policy of encouraging customs revenue based on imports of the foreign products rather than encouraging excise revenue by encouraging local products. Each and every finance minister gives target to the customs offices. The concerned officers deployed in such offices encourage importers to meet the given target. In this way, our domestic products are discouraged whereas imported items have dominated the local market.
For example, revenue received from import of vehicles is the major source of income in the government treasure. Along with import of vehicles, we are encouraging import of petro-products. Today, we are importing petro-products equal to our total exports. Why the government is encouraging import of vehicles then, which is confusing for the student of economics. Sooner or later, we have to go for e-vehicles. Nepal is a highly potential country for generating hydropower. If we give concentration on hydropower projects and introduce electricity operating vehicles, it could contribute to reduce alarming level of pollution. Vehicle crowd in the streets has created hazard in many ways. We have the vehicles more than the capacity of our roads. If the government will give insensitive to the local industrialists, they will produce or assemble standard e-vehicles within the country; they would produce back-up batteries domestically. However, while doing so, the government will lose above 250 percent of customs duties from imports of vehicles both two-wheelers and four-wheelers, therefore, the government never encourage manufacturing or assembling of such vehicles within the country.
The government is collecting VAT plus road tax and other charges while importing petro-products. If the government will be ready to give up immediate income, we can reduce trade deficit in a significant manner. While doing so, the government has to change the mentality of dependence on import based revenue.
Accordingly, if the government will work at war-footing level in completing hydropower projects in pipeline, we can stop import of petro-products used by the local industries. If the government, instead of thinking export of electricity and supply electricity at subsidized rate to the industries, our products can compete in the international market contributing our exports indicator enormously.
Nepal, known as an agricultural country, is importing agro-products from abroad. This has happened because of the government negligence. If the government would have thought about establishing fertilizer factories, introducing advance agro-equipments and encouraged farmers with different facilities, this situation would never had come. Our fertile agro-land is being plotted by the land mafias for housing purpose. If the government would have stopped it on time, we could not have faced the present plight.
Nepal is naturally enormously gifted nation in many ways. We have good climate, enough water for irrigation and enough fertile land for cultivation but we have not been able to grasp these free resources. Besides, we have naturally gifted many touristic destinations but we have been failed to harness the tourism potentiality. Talking about tourism, we have only one international airport having only one runway. Why we have failed to construct another international airport, this is a burning question. More serous to state, the only international airport terminal is in a very vulnerable state, it is due to negligence and bad management. The aircraft flying to Kathmandu will have to remain on hold for minimum one hour to two hours. In such a situation, talking about tourism promotion is a big joke.
First of all, we have to overhaul each and every sector, including changing the present political system, which is unbearable burden or say white elephant for the nation.