National economy is showing signs of recovery, FinMin claims

KATHMANDU, DECEMBER 13: Minister for Finance, Dr. Prakash Sharan Mahat, claimed that the national economy is showing signs of recovery with the continuous efforts of the government in this regard. At an interaction with media persons in the Ministry of Finance today, he shared that the economic reform programmes incorporated in the annual policies and programmes, annual budget and monetary policy of the current fiscal year have started to yield positive results.

Mahat said, “When I took up the office, many economic indicators were not so positive. Some problems certainly emanated due to the strict policies adopted to manage the effects of the easy monetary policy adopted during the COVID-19 pandemic. But overall, the economic indicators are becoming positive. The share market has picked up a positive rhythm and transaction of real estate is on the rise.”

The Minister, however, admitted that it would take some more time to achieve growth in production and employment. “The economy will take a decisive form and the basis for it is being built,” he expressed his confidence. According to him, some decisions were made regarding monetary policy after continuous decisions between his Ministry and Nepal Rastra Bank which led to a reduction of interest in the banks and financial institutions.

Furthermore, the government is attempting to address the problems of debtors. Also, Mahat said that the economic reform program followed by the monetary policy had slowly begun showing the results. “Various procedures have been devised to implement monetary policy while some are in the process of formulation. The process of awarding contracts is also progressing rapidly which is expected to increase capital flow in the market. Our policies and priorities in the sector of foreign assistance have been changed.” “We have expressed our intention to seek support for those projects capable of yielding expected results and donor agencies have responded to it positively,” he said. According to the Minister, the government is internally preparing to introduce more programmes for economic reforms in the budget for the upcoming fiscal year. Stating that no economy was free from challenges in the world, he said, in the case of the domestic economy, the problems were accumulative and instant solutions were not possible.

“However, we hope they will be addressed gradually. We are not content with our current achievements but are committed to ensuring that the economy is moving in a positive direction.” According to the Minister, the government is effortful to fix a ceiling to the current expenditures and to promote the capital expenditures. The first quarter of the current fiscal year recorded a rise in revenue collections. The revenue collection increased by 7.57 percent in the first three months of the current fiscal year. Specifically, customs revenue saw a significant increase of 13 percent, VAT rose by 7.19 percent, and income tax recorded a 12 percent increase during this period.

The government is dedicated to intensifying economic and budget system reform programs and establishing high-level coordination between the government and private sectors. He added the government is working to reflect positive indicators of the economy in consumption and investment, to promote fiscal responsibility in government spending, remove obstacles in government investment, ensure housing for Jajarkot earthquake survivors, create more jobs at home and achieve the expected economic growth. It may be noted the government has announced the Third Investment Summit on the upcoming April 21 and 22. Priory, some policy and legal reforms would be carried forward for the event.

The government is at work to make the Summit comparatively beneficial and ensure the involvement of investors in the potential areas to replace imports, said Minister Mahat. “An atmosphere conducive to investments will be built while making and implementing policies and laws related to economic reforms in the long term. The government has adopted a policy of attracting domestic and foreign investments while keeping because of the development of hydropower, the commercialization of tourism and agriculture and the creation of abundant opportunities in the information technology sector,” he said.

On the Ncell share sale and purchase, the Minister said any activities beyond the periphery of the laws of Nepal would not be allowed. “The company that started operation abiding by the law of the country cannot detach itself from following the law. The regulating bodies should seriously look into the issue. We will collect taxes from the Ncell as per laws.”

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