Economic Action Plan

In view of the current economic slump, ineffective revenue collection, increasing administrative costs and lacklustre performance of various development projects, the Ministry of Finance (MoF) has come up with an action plan to implement the policy priorities and common minimum programmes of the government. The action plan focuses on policies and programmes, landmark achievements, resources, time limitations, monitoring and evaluation indicators, among others.  With this new action plan, the MoF aims at making revenue collection more effective, systematising the revenue system, and maintaining professional neutrality in course of revising rates of revenue and checking the revenue leakage. In addition, the fresh initiative also includes formulating fiscal and monetary policies, making the required decisions for reducing expenditures and granting agreements for organisations to carry out management surveys for the construction of buildings. Leading the nation towards the path of economic growth and economic stability is the core objective of the action plan. The MoF wants to identify the projects that have remained incomplete and others in limbo, and manage resources on a need basis for their operation when they are proposed by the bodies concerned.

The action plan envisages launching a hedging service in order to manage fluctuations in foreign investment. Nepal is in dire need of promoting foreign direct investment (FDI) in the post-COVID situation in order to revive the economic sector. The nation could create new jobs and more investment opportunities only when there is an increased inflow of FDI in different potential manufacturing and service sectors. With this action plan, the MoF intends to make crucial reforms in the bodies under it on the basis of self-assessment reports and other documents concerning foreign exchange, revenue policies, government grants, non-amendment to bank loan policy, and elimination of investment for money-laundering and activities of terrorism. Besides, the comprehensive document aims to create a foundation for realising five-digit economic growth in the next five years. It also proposes enhancing coordination among the three-tier governments, reviewing the customs rates and moving ahead with restoring the closed government enterprises following a study.    

The action plan has been devised in line with the policy priorities and common minimum programmes set by the present seven-party coalition following the formation of the government headed by Prime Minister Pushpa Kamal Dahal Prachanda. This document is also concentrated on undertaking policy and structural reforms in the insurance sector besides revising laws related to securities and making the stock market more transparent and competitive. The share market had shown some signs of improvement immediately after the formation of the incumbent government. It, however, has failed to recover as expected. The paper also incorporates provisions in regard to operation of the commodity market and development of its infrastructure, assisting in the mobilisation of capital required for small and medium-scale enterprises and carrying out reforms in the financial sector.    

The action plan focusses on allocating adequate amounts of budget for transformative and national pride projects, non-transfer of the budget for other projects and non-amendment of programmes.  It wants the Inland Revenue Department and the Department of Customs to mobilise target revenue and carry out policy reforms accordingly to achieve the results.  As the private sector is considered as 'an engine of growth', the action plan need to deal with the existing economic issues by taking the private sector into confidence and enhancing exports. The set targets will be met if the action plan is implemented prudently.