Finance Minister Dr Ram Saran Mahat, while drawing his point home on the transfer of allocations towards the end of the fiscal year to the indiscriminate projects from the ones mentioned in the FY 2013/14 budget, revealed that there are not 'any' ongoing project of substantive size so that funds could be funnelled to them. On the moral grounds, this statement from Mahat is unpalatable. Because he is the only person who has headed the country's budget and planning for twelve out of twenty four years since restoration of democracy in the country, first as the National Planning Commission vice-chair and then minster for half a dozen times.Thus, he should also be held responsible for not incubating enough projects of national significance that have absorption capacity of virtually any amount of funds that may be diverted in wee circumstances, like in the event of low level of overall capital expenditure in the economy. Equally irresponsible were those who were at the helm of the Ministry of Finance before Mahat's current term in office.
It is indeed a precarious situation -- a clear mismatch between the demand and supply of financial resources on the one hand and similar demand and supply dynamics of the development projects in the country. In absence of institutions like elected local bodies that articulate the demands for development of the common masses, demand for resources have also substantially gone down.
There are other unattended areas in the economy that are either causing excessive 'bleeding 'or/and constricting growth for years. For example, petroleum import that exceeds the amount of our total exports, whopping Rs 250 billion trade deficit in a single year and continuous financing to loss-making State Owned Enterprises (SOEs) from the tax-payer's money to project the jobs of a few hundred unproductive employees.
In addition to all these odds, rapidly eroding institutionalcapacities and, more importantly, rampant imperviousness of the political leadership towards these grave economic maladies are to blame why the relative peace of eight years since 2006 peace accord also couldn't ameliorate the acuteeconomic hardships of the people.The much expected departure in the economic affairs of the country, particularly after the dawn of peace is yet to happen. As credentials have it, Mahat is perhaps the best finance minister to transpire this much needed departure in terms of policy reforms, resource mobilization, productivity and trade enhancement and employment generation. But Mahat, given his outline of principles of the next budget presented recently in the parliament, seems unprepared to depart from a sluggish, low and sub-five percent growth rate.
Not only there is absolute dearth of ongoing publicly financed projects as claimed by Mahat, private investment - both domestic and foreign - is also at its lowest. The contribution of the manufacturing to GDP has gone to worse from bad in recent years. It is one of the major reasons of widening export-import gap. The remittance fuelled consumption would have been a good catalyst for manufacturing growth. But lack of proper ambience for investment caused largely due to political indifference bleakens the manufacturing scenario of the economy. Even the policy of putting the private sector at the driving seat of economic development, incidentally credited as Mahat's brainchild in 1992, doesn't seem to be the case now.
In view of the multifaceted problems, marginal improvements in blatantly failed economic policies, plans and implementing strategies are not likely to fundamentally alter the situation. It needs a real departure and if Mahat alone is unable to take such a risk, the major political parties must act together. Mahat can be the initiator of the consensus process for economic revival.