From frying pan into fire
- Passing Reconstruction Bill could give much-needed push to economy
Oct 7, 2015-The economic prospects of Nepal for this year, according to a released World Bank report—South Asia Economic Focus Fall 2015: Getting prices right—are rather dim. In July, the government set an ambitious target of achieving a six percent growth rate for the current fiscal year 2015-16. Two months later, it is yet to even pass the Reconstruction Bill. This has effectively put the Finance Minister’s plan to boost the economy by spending $91 billion—on reconstruction, infrastructure development and regional development—on hold.
could have serious repurcussions for the economy. So, on Tuesday, a worried Federation of Nepalese Chambers of Commerce and Industries (FNCCI) along with the Confederation of Nepalese Industries (CNI) and the Nepal Chamber of Commerce (NCC) submitted a memorandum to the government to resolve the crisis at the earliest.
The only silver lining amid this worrying state of affairs is the surge in remittances in the aftermath of the April and May earthquakes. Nepal’s fiscal surplus, due to its inability to spend the funds in public investment projects, is also likely to cushion the economy from any external shock for a while. But clearly, Nepal cannot rest on its laurels.
The first step towards resolving these problems would be to pass Reconstruction Bill as soon as possible. This is important to not only help the economy rebound through a boom in construction activities but also for the quake-affected people who are bracing for a harsh winter. Meanwhile, the government should also consider delegating more power to the District Disaster Management Committee (DDMC) so that it can begin work at the local level. The DDMC in Dhading employing the earthquake-affected people to demolish buildings is a commendable step in that direction. In the long run, the government must ponder on ways to increase its ability to spend the capital allocated to large projects. One way to do that would be to prepare programmes and release funds in time. Line ministries that fail to stick to schedule must be brought to account. Additionally, the authorities must seek to create more jobs in the country to reduce its unhealthy dependence on remittances. Needless to say the Reconstruction Bill lies at the heart of all this.
Published: 07-10-2015 07:59