Kathmandu, January 8: The High-Level Economic Sector Reform Suggestion Commission, formed with the objective of making the country’s economy dynamic in line with the changing times and moving it forward on the right path, has presented its interim report to Deputy Prime Minister and Minister for Finance Bishnu Prasad Poudel.
The commission, chaired by former Finance Secretary Rameshwor Khanal, presented a report to Minister Poudel this afternoon, including suggestions on what the government should do in the immediate and long-term to improve the economy.
“We have made suggestions in two sections regarding the work to be done immediately and within three years for economic reform,” Chairman Khanal told RSS after submitting the report. “We have recommended the work to be done by the government by mid-Magh to review the current economic situation, identify the causes of the problems, and diagnose them.”
Informing that suggestions have been made regarding legal reforms to be made to resolve problems in the business sector, he said, “We have submitted a draft stating that a new law is necessary. Policy issues including the need to repeal two or three laws and change the structure of some organizations have been included in the report.”
He said that the report mentions urgent issues to be addressed to get the economy moving, emphasizes the need to pay government liabilities and arrears, facilitate real debtors in the troubled financial sector, and formulate laws to regulate commercial lending.
Similarly, suggestions have been made to address the issues of problematic cooperatives, increase current capital expenditure, reconstruct physical infrastructure damaged by disasters including the Jajarkot earthquake, promptly distribute compensation for land acquisition by the government for development projects or for which the process has been finalized, and facilitate Indian tourists arriving by land.
It has been suggested that priority be given to payments for projects completed without new contracts in the current fiscal year, and liabilities created by multi-year contracts should be included in the next year’s budget only if the budget is available.
It has been suggested to review the interest subsidy program for concessional loans, taking into account the availability of resources based on the impact of subsidies provided by the government in various sectors on production and employment. It is suggested to increase the premium of health insurance and increase the pay ratio. Since the business that was in a problematic situation before the Corona epidemic is currently in trouble, if there is a situation of improvement in the future, the commission has mentioned in the report that it will issue a law to establish an asset management company in public-private partnership, providing an opportunity to reschedule loans for one year according to the nature of the industry, and in the context of the sluggish real estate market and the increasing non-banking assets of banks.
The report emphasizes that to solve the problems of cooperatives, legal provisions should be made so that the scope of work of savings and credit cooperatives does not exceed the geographical area of ​​one local level, cooperatives should be prohibited from making companies or any organized organizations members, only natural persons can be members, savings and credit cooperatives should be legally made to have a single loan limit like in financial institutions, and for the time being, the total loan investment to a single person from one or more than one bank should not exceed ten percent of the total share capital of the institution.
The commission has suggested that in order to increase capital expenditure for the remaining period of the current fiscal year, regular monitoring of all projects with an allocation of more than Rs 100 million should be carried out and a team with authority should be mobilized to resolve problems on the spot.
The Council of Ministers meeting on September 21 had formed the commission, which includes National Planning Commission member Dr. Prakash Kumar Shrestha, Tribhuvan University Central Department of Economics Head Prof. Dr. Ram Prasad Gyawali, economist Dr. Biswas Gauchan, and Policy Research Institute senior researcher Dr. Kalpana Khanal.
