Focus On Economic Transformation

This may be an off-season to talk about the election manifestoes of political parties and their devoted promises. But, promises are the exclusively human way of predicting and directing the future course of action. With the mission 2084 BS heating up, it calls for little retrospection.

In its 10-year vision and mission statement, the CPN-UML had vowed to achieve US$ 5,000 per capita income of average Nepalis by 2084 BS. The party made the commitment before 2074 BS. The pledge created much optimism and encouragement among the people. Likewise, the Nepali Congress, in its election manifesto, had also promised to expand the size of the economy up to Rs. 10 trillion and to reduce poverty to three per cent. 

Similarly, the big three political players of Nepal had separately or jointly envisioned the construction of 5,000-km railway line and more than 50,000-km blacktopped road that would link with the national network and also underscore the construction of around 1,000-km four-six lane fast track road. Modern tram and metro train services in the inner Ring Road of Kathmandu were other cheering promises. But those pledges have yet to materialise.

Visionary plans in need

It is said that ‘a common man always remains busy making a living’. Then, who would follow up on such inspiring and visionary plans? With a prolonged period of waiting to pick up a substantial change in the living standard of a common man, today people start realising that without continuous evocative public pressure on the government instead of growth, it is falling apart. At present, if we are to accept the public opinion published in any media then a big mass has already stood sturdily against the weak governance, irregularities and corruption.

Today people are restless to see and experience the comfort of basic infrastructure on the ground.  If we talk about the railways, most of the committed projects, be it East-West electric railway or Kathmandu-Raxual railway, are just limited to the feasibility study with bewilderment in choosing either a broad gauge or standard gauge railway track. 

Today Nepal's annual blacktopping of road record is not satisfactory. It is just around 1,000-km/year or so. Hence, when to meet the manifesto target of 50,000 km? Despite such a target, in this day and age, Nepal is relatively doing much better in its hydropower production. If all goes well, the country is close to meet half of the target. Whereas, as of today, total installed capacity of producing over 2,684-MW of electricity has reached and been recorded.

As of now, Gross Domestic Product (GDP) per capita income has reached US$1,399 with very little increment compared to previous years. Satisfactory GDP per capita growths provide fascinating insight into people's influence and capacity.  If we analyse the increment trend of the recent past, no light can be seen at the end of the tunnel when it comes to achieving such targets within the remaining four years. Does our budget characterise any attributing factors for growth marathon to support such ambitious election promises?  

A national budget of Rs. 1.751 trillion was announced for fiscal year 2080/81 (2023/24). Out of this budget, around 65.20 per cent has been allocated for recurrent expenditure.  Equally, 17.55 per cent has been set aside for financial management and only 17.25 per cent has been earmarked for capital expenditure. 

If we look into the tendency of capital expenditure of the preceding fiscal year, it is plainly on the tapering trend. In the fiscal year 2078/79, just 22.7 per cent of the total budget was allotted for capital expenditure while it went down 21.2 per cent in the fiscal year 2079/80 BS. Tall promises and commitments in the area of infrastructure development and economic growth are mounting whereas a tool to fulfill such promises appears to be eroding. 

This time around, indisputably, we have been missing the opportunities to meet the target of expanding the economy to Rs. 10 trillion given our growth rate and major GDP attributing factors. So, it is beyond the imagination to increase the per capita income to US$ 5,000 from today's $1399 by 2084 BS.

Antidote 

It is necessary to create more jobs, form capital through developing quality infrastructure and boosting tourism and improve revenue collection with liberal tax ceiling. It is equally essential to expand tax net, control corruption, promote industrialisation, transform the agriculture sector with priority for organic farming, expand market hydroelectricity (at home and abroad), and establish neighbourhood receptive industries. 

We need to make genuine reforms in our economic policies and structures to attain speedy growth. Besides, dissolution and transformation of dysfunctional and redundant political and bureaucratic structures could be the curative approach to creating a ray of hope among the people.

(The author is a former senior engineer of Nepali Army. pthapa.ktm@gmail.com)