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March 2016 Economy and Policy

Published on: 2016-03-24 14:36:06     4327 times read    4  Comments

--By Shashi Ranjan

When suddenly there is a general strike called by any political party, people say that there is nothing left in Nepal to develop as all politicians and bureaucrats are corrupt. But nobody gives an objective analysis based on historical and present facts. 

Have we ever thought of why many small nations similar to Nepal have developed a lot with few resources? Look at Dubai, Singapore, Switzerland. They have gone beyond our imagination and there is no looking back for them. 

What do we really need to do to be a developed country?
This question keeps nagging on my mind and I think many other people may feel similarly. Here are some points that come to my mind as probable solutions. Here, I put forward a few points for the development of our country. 

1. We need a VISIONARY LEADER who has a clear vision to see Nepal as a DEVELOPED NATION. He should not only have a vision but should also make sure that the vision is fully implemented and it is regularly monitored. 

2. Restructuring Nepal Planning Commission (NPC)
    It should be a very strong and proactive institution that should have complete authority to plan the development activities in a way that addresses the needs of the citizens of Nepal. The planning commission should include a full-time Chairman (not the prime minister who is ex-officio chairman at present) and representatives (not ministers) from various ministries. 

3. Set up a Quarterly Monitoring Committee (QMC)
    Quarterly Monitoring Committee will focus on evaluating the inflation, trends in export & import, evaluating monitory policy, etc. The focus should be on individual products as how to increase exports and decrease imports, production and consumption analysis and make our current manufacturing and service sectors effective. It will also look into the sick units and the existing running units of the government of Nepal. The committee should include a Chairman and representatives from various sectors like Nepal Rastra Bank, Finance Ministry, Chambers of Commerce, etc. 

4. National Statistical Department (NSD)
    The National Statistical Department should be formed to collect data about the actual state of affairs of the country. This department should focus on actual import and export of goods and services, manufacturing, electricity production, agriculture outputs, etc., on all aspects of the nation on an individual basis and should be shared to the respective ministries and departments for effective evaluation and policy making. Though we have a Central Bureau of Statistics, it is not performing as expected. 

5. Restructuring Policies
    Policies in the field of manufacturing, education, health and related sectors need to be restructured giving more emphasis on domestic components. A contract manufacturing system should be initiated. Job creation in our country needs to be emphasised. Changing a few policies in all the sectors can give a big boost to the economy.  

6. Infrastructure Development Fund
    We need to set up an Infrastructure Development Fund in which funds will be collected offering high interest rates to the contributors who should be entitled to tax exemption of the amount that he/she provides to this fund. This fund should collect money only from people and institutions of our own country. It will be similar to a government bond or Treasury Bill but this will be tax free and offer higher interest rates for the investor. 

7. Savings Fund for individuals 
    We should give special incentives to people to save. For example, individual income up to Rs 1 million per year should be made tax free. Similarly, tax exemptions should be given on money spent in health insurance, insurance of personal homes, money invested in government funds, life insurance, etc. This will help in individual savings and people will try investing in good policies of companies and the government and that, too, in Nepal itself. 

    Moreover, the Finance Ministry should evaluate what would happen if income tax on individuals is abolished. Most likely, tax collection from other sources will increase and that will be much more than what is collected as income tax. Service tax, entertainment tax, VAT and other taxes can be reviewed to increase tax collection. 

8. Abolish Licensing System
    Though it is said that that Nepal has no licensing system, the most important areas are still subject to license. It should be completely abolished. Procedures should be made simple for doing business, investing funds or getting Foreign Direct Investment in every sector. Getting a license and renewing it every year or two is very problematic. 

9. Budgeting the entire Nation’s Requirement for Development
    A Committee should first jot down the actual requirements of the nation to become fully developed. The accompanying table gives an illustration. 

The Budget should be spread over 10-20 years of planning with urgent development being the first priority and so on. This will average our overall requirement to 2-4 Lakh Crores per year. 

Funding 
For raising the funds required for such a plan, we need to invite the private sector as well as the international community who can support us for a long term basis and at a lower interest rate. World Bank, Asian Development Bank, China, U.S, U.K, India and many countries can do so. 

An International summit can be held for this purpose. We could emulate the Indian slogan and have our own MAKE IN NEPAL policy to attract investments.

The author is Director of Ranjan Enterprises, Birgunj and can be reached at motushashi@gmail.com


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ram

great plan I appreciate.

saugat devkota

do you help me if I started mission develop Nepal?

David Regmi

nepal really want great leaders. very good article

narayan khadka

why nepal is so poor thats main reason is lack of good policy .all of the world nepal is the one having 601 politice member. nepal having only maximum 30000000 population

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