New issues to inject vitality into economy, growth

By Ajay Chhetri, Kathmandu, May 26:  Through the policy and programme for the upcoming fiscal year (FY) 2022/023, the government has expressed its motive to drive the nation in a new path in order for injecting vitality into the weakening economy.

The government has introduced some new policies and programmes to bolster the economy. It has focused to enhance the leverage of economic growth by opening wider space to the private sector for commercialization of economic activities, estimation of efficiency before mobilization of public expenditure, and harnessing the potential of green energy for economic growth in addition to supporting the backward communities.

Policy to consolidate the domestic economy

In the wake of rising stress in the external sector of the economy, the policy and programme has emphasized the consolidation of the domestic economy and import substitutions. A new campaign to this effect has been rolled out - a decade of Nepali Production and Consumption enhancement- and to promote this there will be an exemption in taxes and waivers in customs duties. Further, special programmes will be initiated to increase the production of rice, maize, potato, onion, apple, and walnut to substitute its imports.

The government has also pledged a special programme to attract foreign investment in the tourism industry which is one of the main sources of foreign currency and employment.

New Policy and Programme to support Agriculture

Agriculture remains the priority sector to trigger economic growth and employment generation. To flourish this, formulation of a "New Agriculture Policy” in the near future is promised. In addition, the private sector will get involvement in chemical and quarantine tests.

There will be an exemption in electricity tariff which is used for irrigation.

New Policy and Programme to tap Energy

The document has focused widely to tap the potential of the energy sector specifically hydroelectricity. To expedite the power generation, transmission, and distribution, the participation of the private sector is considered pivotal. It has perceived the participation of the private sector in the trade of electricity as vital. Besides, the private sector will get participation in the construction of charging stations.

To enhance the consumption of electricity and displace the LPG, it has an aim to provide exemption on electric tariff.

To support the backward community and rural population, the government is to provide electricity to all the local levels and free installation of electric meter for the backward communities.

Policy to ramp up capital Expenditure

To expedite capital expenditure and implementation of development projects, a separate rule will be formulated based on the guideline of the project management system.

Policy and Programme to attract foreign investment

The Policy and Programme has paid heed to convey a positive message to the foreign investor. It has promised to delegate more authority to a one-stop service center and transform it into a technology-friendly system. It will set up programme to attract more investment in tourism, production, and infrastructure development.

Policy shift for public enterprise, taxation and restructuring of existing programmes

The government has come up with a policy for enhancing the efficiency of public enterprise.

Public enterprises which become financial burdens will have to either improve, merge, or get liquidated.  

The most interesting thing is that the document has aimed at imposing a tax on social media.

Restructuring and reprioritization of the Prime Minister Agriculture Modernization Program based on medium-term review has also been put forward in the policy and programme.