National economy is reviving: Minister Mahat

KATHMANDU: Minister for Finance Dr Prakash Sharan Mahat said that the national economy is reviving following the continuous efforts of the government and it would reach a decisive mode very soon.

At an interaction with mediapersons in the Ministry of Finance today, Minister Mahat shared that the economic reform programmes incorporated in the annual policies and programs, annual budget and monetary policy of the current fiscal year had begun showing 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 for achieving 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 reduction of interest in the banks and financial institutions. Furthermore, the government is attempting to address the problems of debtors.

Minister Mahat said that the economic reform programmes 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 case of domestic economic scenarios, 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 making an effort to fix a ceiling to current expenditures and to promote capital expenditures. The first quarter of the current fiscal year recorded a rise in the 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 that the government has announced the Third Investment Summit on April 21 and 22. Prior, 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 so as to replace imports, said Minister Mahat.

“An atmosphere conducive for 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 in view 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 laws of Nepal would not be allowed. “The company that started operations 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.”