Major Political Parties Prioritize Economic Agendas Over Political Issues in Election Manifestos

Kathmandu. Major political parties this time have prioritized agendas of economic prosperity and financial good governance over political issues. The parties have adopted such policies in the manifestos they published for the House of Representatives election scheduled for the upcoming Falgun 21.

Especially, parties have put forward their own models for expanding banking access, managing loan interest rates, and reforming the stock market. They have committed to bringing banking access to every neighborhood and adopting a stable policy in the stock market.

The five major parties—CPN-UML, Nepali Congress, CPN (Maoist Centre), Rastriya Swatantra Party (RSP), and Ujyalo Nepal Party—have adopted nearly similar agendas in the financial sector.

UML has announced plans to transition the banking sector to digital currency and emphasized the development of the capital market. Reviewing the manifestos of political parties, everyone has a common refrain of making the financial sector digital.

However, there are differences in the modality of implementation among all political parties. While other slogans are populist and ambitious, they have not put forward very ambitious plans for the development of the financial sector. CPN (Maoist Centre) has announced plans to bring banking access outside the control of large business houses. However, this does not seem feasible in the context of Nepal.

For the development of the Nepali capital market, almost all political parties have committed to adopting a stable tax policy in the stock market in the coming days. They have announced plans to address the problems seen in cooperatives, loan sharks, and microfinance by developing and expanding the stock market and ensuring banking access for all Nepalis.

• RSP: Restructuring SEBON and Tightening Grip on Insider Trading

RSP has put forward the most aggressive agenda for structural reform in the capital market. It has promised to restructure the Securities Board of Nepal (SEBON), the regulatory body of the stock market.

RSP's manifesto states, 'Regulatory reforms will be carried out to make the capital market transparent and secure. State-of-the-art monitoring systems will be implemented to prevent insider trading and abnormal manipulation.'

It has put forward a novel agenda to develop a separate mechanism for raising capital for small and medium enterprises and to legislate alternative financial instruments like crowdfunding.

If RSP leads the government after the election, it has promised to bring the entire non-banking financial sector under the direct supervision system of Nepal Rastra Bank by displacing the uncontrolled and lax regulation of the cooperative and microfinance sectors.

The manifesto mentions a commitment to bring cooperatives and microfinance institutions with transactions exceeding NPR 500 million under the strict regulatory purview of the central bank. Furthermore, it states that cooperatives will be brought under the standards similar to 'D' class financial institutions, and a high-powered 'second-tier regulator' will be formed for the systematic operation of smaller institutions.

RSP has also declared its intention to end the duplication in loan disbursement and the 'debt trap' in cooperatives and microfinance. To achieve this, it mentions developing a system to link cooperatives with the Credit Information Bureau to ensure that loans are disbursed only based on actual capacity.

RSP claims to completely end exorbitant interest rates and unfair service charges by implementing an automatic system where interest rates are linked to the 'base rate' allowing only a small percentage as premium. Additionally, RSP plans to shift cooperatives and microfinance away from unproductive real estate sectors and focus them on productive, collateral-free group guarantee, and local skill-based entrepreneurial loans.

• UML: Digital Currency and Productive Investment

CPN-UML has made the modernization of the financial system a key agenda in its manifesto. UML has put forward an ambitious plan to introduce digital currency.

UML's manifesto states, 'Financial services will be made fully digital. Regulation of banking and financial institutions will be strengthened by concentrating investment in productive sectors.'

UML has adopted a policy to develop and strengthen the capital market and mobilize more domestic and external capital. Furthermore, UML is committed to resolving the problem of loan sharks by making small loans available through the financial system itself.

• Nepali Congress: Interest Rate Stability and Share Market Education in Schools

Nepali Congress has put forward an agenda of stability to boost the morale of the private sector. Congress has announced a policy of stable interest rates for small and medium enterprises and agricultural loans, ensuring that rates do not increase for a specified period.

Regarding the stock market, Nepali Congress has emphasized financial literacy. The Congress pledge letter states, 'Share market and financial management education will be included in the curriculum from the school level, and the securities market will be expanded nationwide.'

Congress also plans to establish digital financial literacy and service centers in remote areas that lack banking access.

• CPN (Maoist Centre): Decentralization of Loans from the Grip of Limited Houses

CPN (Maoist Centre) has prioritized the agenda of breaking the dominance of limited business houses in the financial sector. Its policy is to end the situation where a large portion of the resources of banks and financial institutions is consumed only by a limited few, and instead, ensure loan access for the general public.

The manifesto states, 'A system will be established to set targets for medium and small loans to eliminate the situation where only limited houses utilize deposits collected from the general public.'

It has also made a general commitment to increasing public access to the capital market.

• Ujyalo Nepal Party: 1,000 Shares for Every Household

Ujyalo Nepal Party has put forward a popular agenda that directly benefits the public. It has announced a campaign to distribute 1,000 shares.

'At least 1,000 shares of hydropower projects will be made available to all households at the primary share price,' its commitment letter mentions.

It plans to provide concessional loans to poor families to buy primary shares and convert the labor of workers involved in project planning into shares.

• Same Agenda, Different Paths

There are some commonalities and some differences in the agendas related to banking and the stock market in the parties' manifestos. All parties have made it a common agenda to digitize the banking system, increase financial literacy, and channel loans to productive sectors. Addressing the problems of cooperative and microfinance victims is also a priority for almost all of them. All have adopted a policy of maintaining stable policies for the development of the capital market.

However, all parties hold different views on structural reforms. RSP has committed to restructuring regulatory bodies (SEBON, Nepal Rastra Bank). It has also emphasized including sectors like SME platforms in the capital market and facilitating loan disbursement.

On the other hand, Nepali Congress has prioritized policy stability. Congress has focused on interest rate stability and school education to make investors feel secure.

UML, meanwhile, has emphasized technological development. UML aims to introduce modern monetary instruments like digital currency. However, the possibility of achieving this immediately is low.

Ujyalo Nepal Party has adopted a distribution-oriented agenda of directly handing out shares, while CPN (Maoist Centre) has made the political agenda of democratizing loans (from a limited class to the general public).

It appears that the parties now accept the capital market not just as a place for speculation but as a basis for capital formation. However, given the past tendency to forget manifesto promises once in government, it remains to be seen how honestly these agendas will be implemented.