Economy will be revived in 'V shape' with everyone's efforts

Sun, Nov 1, 2020 10:19 AM on Featured, Economy, Interview, National,

When Mr Bishnu Prasad Poudel assumed the Finance Ministry's portfolio four years back, the general life of the people was disturbed by the Gorkha Earthquake of April 25, 2015. The undeclared border blockade imposed by India had further increased the trouble to the nation already in problem due to the devastating natural disaster. At that time, Poudel, as the Finance Minister, had brought the economy on good stead by overcoming all the problems at that time. He is again now at the helm of the Finance Ministry.

Now, Finance Minister Poudel faces another challenge created by another natural calamity: reviving the economy badly dented by the global coronavirus pandemic. He now has the responsibility of making the economy vibrant by keeping the security of the health of the citizens in priority. Poudel is known for his capacity to produce results during times of problem whether within the party or in the nation. He is the Secretariat Member of the ruling Nepal Communist Party (NCP).

Emphasis on six sectors

Finance Minister Bishnu Poudel has said he has emphasized on six major sectors for making the economy vibrant and for rescuing it from the adverse impact of COVID-19.

According to him, these six sectors are: effective implementation of the budget, increasing the capital expenditure, cut down on current expenditures, providing relief package to the poor section of the population affected by COVID-19, the stimulus package for the most-affected economic sectors and effective management of financial sources of the government for meeting the government's growing expenses.

The Finance Minister outlined his priorities in an interview he gave to RSS reporter Ramesh Lamsal.

These measures, he said, would infuse some dynamism to the economy in the present situation.

Finance Minister Poudel said COVID-19 has badly impacted the national economy, leading to a decrease in economic growth rate and increasing unemployment. This will also impact the declining poverty rate.

He expected the active participation of the political parties, the private sector, media persons, stakeholders and the general public in these priority areas.

"We have the experience of facing the earthquake and the blockade with determination. We have achieved significant results in the post-earthquake reconstruction through collaboration and coordination among all. The present situation is quite different. The effects of coronavirus pandemic are multi-dimensional. But we can face the challenges created by COVID-19 with the support and cooperation of all. I have already started my work with this confidence," the Finance Minister said.

Asked about the possibility of the country's economy affected by coronavirus pandemic re-emerging in 'V' shape as was stated in course of making preparations for the budget of the current fiscal year, Finance Minister Poudel said: "The COVID-19 is still prevalent and there is the need to work in preventing and controlling it and in the treatment of the infected people until a vaccine is developed. We are doing some works to keep the economy functioning even amidst the coronavirus pandemic. Concessional loans and re-financing have been implemented for providing relief to the affected enterprises. Now I urge all sectors to proceed ahead with the economic activities by following the health safety standards."

He expressed the belief that the economy will be revived in the 'V shape' and become functional when the infection declines and the programmes brought by the government are implemented, as COVID-19 has not largely affected the physical mechanisms of production.

Responding to the question what are his plans for the industries, businesses and the citizens losing employment due to the adverse impact of the pandemic, he said that the pandemic has affected all individuals and people of every section and sector. On the one hand, the people from the very poor section and communities need to be given relief for survival and the government has been working towards that. As he said, there is now a need for a rethink in this and moving ahead with a new way. The hardest-hit sectors would be provided with special support for their revival. The programmes incorporated in the budget and the monetary policy would be implemented in an effective manner. The government is with all individuals and entrepreneurs affected by COVID-19 pandemic.

In response to the question regarding the demand of the private sector that the government should come up with some more policies and programmes to address the coronavirus-affected economy, revive it and to achieve the goal of economic prosperity, Minister Poudel said he has taken the view and demand of the private sector in a positive light and was in the process of holding more consultations and discussions with the private sector on this matter.
"In the context of the private sector's paramount role in our economy, the government works for motivating the private sector. I also request the private sector to adopt new strategies in a new way in the present situation. The goal of economic prosperity would be achieved through mutual collaboration among the government, the private sector and other stakeholders. I am very clear on this," he added.

Plans to meet pressure on revenue

Asked about his plans to meet pressure on revenue as a result of a decrease in economic activities caused by the crisis, Finance Minister said: "Economic activities have been paralysed due to lockdown imposed to prevent and control COVID-19 pandemic and expected revenue has not been mobilised as a result. So there has been a drop in the revenue collection in the first three months in the current fiscal year as compared to the same period last fiscal year. Eighty-seven per cent of target revenue collection has taken place in the three months. Until October 29, revenue worth Rs 189 billion has been collected. Target goals in revenue collection could be reached when there is not a situation that lockdown is imposed again to control increasing infection cases. Revenue collection would ease when economic activities increase. I also focus on expanding the scope of revenue collection and on controlling revenue leakage."

Stress on economic discipline, austerity and transparency

Minister Poudel said expenditure has shot up due to the infection. There has been a pressure on revenue collection with a drop in economic activities. However, we will never compromise on health tests and treatment of the people when it comes to the infection. In this context, there should be a discipline, austerity and transparency in current expenditure.

According to the Minister, there has been a weakness in budget implementation and the implementation of capital expenditure. Work trend, long purchase process, behavioural hassles in big contract, the capability of government mechanism in project management and construction entrepreneurs have affected the matter when it comes to failure to increase capital expenditures.

He said he will focus on eradicating this. I will do works like encouraging the work of the ministries having big capital budget and monitoring and facilitating it. "I will appeal to all employees relating to development activities, construction entrepreneurs and other stakeholders in concluding work in time. I will ensure the release of an adequate budget for development projects. The Finance Ministry will ensure the protection of people’s lives. I make a special request to the concerned authority to effectively implement policies and programmes."

On the question that the size of economy and employments have not increased for lack of effective implementation programmes set by the government, that there have been problems in expenditure and how this could be corrected, he agreed that capital expenditure has not taken place as per target and this needed to be increased. "Employment opportunities would be created by making use of available physical infrastructures. But I have seen slim participation of Nepali people in running physical infrastructures. I appeal to construction entrepreneurs to provide jobs to unemployed people and ask unemployed people to increase their skills for jobs. I also appeal to them to participate in the Micro-Enterprise Development Programme, Prime Minister Employment Programme and skill development trainings and become self-employed by using concessional loans. The government is ready to help those unemployed people who are facing a lack of resources to make a living. I request the state government and local level to help in this regard."

Budhi Gandaki Hydropower Project development

In response to the question on forwarding the stalled Budhi Gandaki Hydropower Project, the Finance Minister said: "Tax had been imposed on the import of petroleum products for the Budhi Gandaki Hydropower Project in view of using country’s capital. So far, Rs 49.69 has been collected from it. Distribution of compensations to the affected local people is underway. Likewise, the detail project report and environmental study report have been prepared. We will consult stakeholders and reach a conclusion on how to move ahead with it in the present situation."

He further said the implementation of many projects except national pride ones has got a slow pace due to the various problems they are facing. This is a matter of serious concern that the implementation of development projects have got a slow pace despite having enough budgets. We will sort out problems facing these projects after holding discussions with concerned authorities and expedite them. We will work to increase the efficiency of construction employees and construction entrepreneurs and manage rewards and punishments to the organizations or people involved in the implementation of projects based on their performance.

Strengthening capacity to address barriers

On a query regarding the problem on a multi-year project, he said there are diverse challenges on the implementation of projects but strengthening capacity is a must to address the barriers. “I will take initiative to take ahead discussions to resolve the issues surfaced in regard to the implementation of megaprojects”, he added.

The Finance Minister also called for support from local, state and federal people’s representatives to monitor, facilitate and resolve problems in course of the execution of the projects.

He further noted that even the donor-funded projects have also witnessed sluggish progress and urged all stakeholders to pay attention to the implementation of projects.

Proper, economic and transparent use of tax-generated income

On a query on the private sector, he said tax revenue generated from the private sector is one of the main sources of financing required for the delivery of public services and expansion of physical infrastructures. “We are committed to making a proper, economic and transparent use of tax-generated income. Specifically we will focus our tax policy towards investment promotion and employment generation”.

He further noted that the government was not in favour of hurting the private sector and the budget has also reflected some specific arrangements for revitalizing economic sector.

Minister Poudel further said that the ministry would work in a way to increase economic growth rate, alleviate poverty and strike balanced development. He urged all to engage in economic promotion activities being sensitive to COVID-19 pandemic. “The state and local levels should adopt effective measures for the protection and promotion of COVID-19 affected enterprises and the safety of the citizens. I expect suggestions as to what the ministry of finance should do to that end”.

He asserted that the coronavirus pandemic could be overcome and the journey of prosperity would be accelerated if we all work together.