Econ reforms necessary for growth: FM

KATHMANDU, APR 29 -

Finance Minister Ram Sharan Mahat has said second tier reforms have become necessary to help the country attain high economic growth and lead the nation to prosperity.

“It’s high time we focused on the agenda of economic growth, as the peace process has largely completed and only constitution making is remaining,” said Mahat at an interaction programme organised by Independent Business News here on Monday.

Legislative reforms, governance reforms and reforms in public enterprise would be core components of the second generation reforms, according to Mahat.

“In legislative reforms, the main focus will be given to regulating sectors that saw tremendous growth but also brought irregularities,” said Mahat.

Stating that weak regulatory framework encouraged irregularities in the financial sector, Mahat said the government would introduce new Bank and Financial Institution Act. The Nepal Rastra Bank (NRB) has already handed over a draft of the new NRB Act to enable the central bank to liquidate troubled BFIs. He said the vulnerability in the cooperative sector calls for better regulation.

Bringing new Electricity Act, Special Economic Zone Act and flexible Labour Act are other reform agendas that the Finance Minister said are necessary to create investment climate.

Economists highlighted the need for giving the biggest priority to reforms in the power sector as it has stood as major impediment for high economic growth. They also stressed on giving priority to inclusive growth amid criticism that earlier reforms measures favoured only the rich.

“Reform measures cannot succeed without the completion of power plants and transmission lines,” said Shankar Sharma, former vice-chairman of National Planning Commission (NPC). “Power is the first prerequisite for attracting investors, although it was not a big issue when the first generation reforms were initiated.”

NRB Govenor Yubaraj Khatiwada stressed on deep-rooted reforms, particularly to address problems related to legislation and governance. “The reform measures should be inclusive and employment oriented.”

Source: The Kathmandu Post