Economists Critique Election Manifestos for Lacking Financial Viability and Implementation Plans

Kathmandu. "Writing a manifesto does not cost much; one can write whatever they wish. But how about implementation? And what about the financial sources? Do not trust things that are free and interest-free. It is impossible. It is only a matter of whether you take it directly or indirectly, today or tomorrow," this was the view expressed by Dr. Prakash Kumar Shrestha, Vice Chairman of the National Planning Commission, on the social media platform Facebook.

Sushil Bhatta, former Chief Executive Officer of the Investment Board and former member of the National Planning Commission, wrote on the same network, "I always want to see a manifesto that includes a detailed cost assessment, financially responsible plans, clearly identified investment sources, and implementation methods, rather than just making ambitious promises. Let the details of how it can be implemented be included."

As the upcoming House of Representatives elections approach, almost all parties are busy seeking votes by publishing their electoral manifestos. In a democracy, a manifesto is not just a document for seeking votes but a social contract with the voters. However, Shrestha and Bhatta satirized the bundles of documents filled with populist attractive jargon, aspirations beyond capacity, and haphazard plans without considering financial sources, on social media. Questions like 'What is the 'cost price' of the election manifesto? Where will that money come from? And how will it be implemented?' are not being raised for the first time in intellectual circles. But now, every conscious voter is asking these questions to the parties and candidates.

The country's economy, which has been continuously struggling due to the 2072 BS earthquake, the Indian blockade, the COVID-19 pandemic, and unstable politics, is in further crisis after the 'Gen Z' demonstrations on Bhadra 23 and 24. The current economic situation and market psychology suggest the same. Since revenue is not being collected as targeted, the government has reduced the revenue-expenditure estimates through the mid-term review of the budget.

Development expenditure for seven months has shrunk to only 15 percent. As revenue decreased, the equalization grant sent from the federal government to the provincial and local levels has been cut, and only 70.43 percent of the total approved annual budget is proposed to be sent up to the third installment. Due to difficulties in mobilizing resources, the National Resource Estimation Committee has recommended to the government to bring the budget for the next fiscal year 2083/84 within the limit of around Rs 19 trillion, which is smaller than the size of the current fiscal year's budget.

The Federal Consolidated Fund has a deficit of over Rs 130 billion. Public debt is around 45 percent of the Gross Domestic Product, and expenditure on principal and interest repayment has started exceeding the development budget. Despite low-interest rates and ample liquidity, credit expansion has shrunk to 6.7 percent. The private sector is pleading, stating that the security of their investment is not guaranteed. The cooperative sector, considered the third pillar of the economy, is in crisis itself. Economists say that the political parties' manifestos are distributing false assurances and dreams that cannot be fulfilled, remaining far removed from all these ground realities.

Former Finance Minister Shankar Koirala states that while it is somewhat natural for parties to bring attractive slogans and programs to draw the attention of voters, there seems to be insufficient homework regarding implementable plans and agendas.

"Currently, almost all parties have put forward the agenda of economic prosperity and brought roadmaps for reform, which is a positive aspect," he said. "But the focus seems more on spending without seeking resources. We must look at income before we spend. As long as the sources of income are not secured, there is no guarantee of plan implementation." He opined that ambitious targets beyond capacity in infrastructure development, doubling or tripling per capita income within five years, making education and health free immediately, and adding liabilities like taking full government responsibility for social security are impractical and financially baseless plans. He stated that in the current situation, the government's revenue can only cover ordinary expenses, and creating further liabilities without reforming areas like expanding the tax base, promoting exports, and widespread industrialization would be inappropriate and impractical.

Former Finance Minister Koirala states that most parties' manifestos are overly focused on distribution-oriented programs. "The economic principle of cost-benefit analysis has not been considered there. The crucial basis of where the expenditure for the manifesto's plans and programs will be raised and how much benefit will be derived from them has been omitted," he said. Koirala noted that when declarations are made without securing resources, one cannot be confident about implementation.

Former Vice Chairman of the National Planning Commission, Prof. Dr. Shivraj Adhikari, says that although election manifestos are primarily documents to present the party's ideology, motivate voters, and set future goals, the tradition of estimating costs, ensuring resources, and clear budgeting has yet to develop.

"If there were a strong practice of looking at costs and budgeting while preparing manifestos, they would be more realistic. To make the manifesto based on reality, answers to fundamental questions like where the economy might reach in the future, how available resources will be utilized, and what the country's political situation will be must also be sought together," he said. Adhikari understands that a manifesto will be evaluated based on whether it is implementable and reality-based by looking not only at the assurance of cost but also at aspects like the implementation timeline, resource mobilization, and institutional capacity.

Comparing manifestos since BS 2048, he assesses that some improvement is visible in recent years. He states that compared to the past, current manifestos seem to be trying to be somewhat more realistic in terms of cost. He mentions that major parties have attempted to include a general cost estimate in their commitments. "It appears they are trying to refine the manifesto, but the complete financial framework and priority order are still not clear," he said.

Most parties have set a target of building an economy exceeding Rs 100 trillion within five years. According to Adhikari, this target is not entirely impossible. He recalled that the 16th Five-Year Plan prepared by the National Planning Commission also put forward a target of a similar size economy. "An economy of one hundred trillion is possible if we can achieve double-digit economic growth," he said. "But that depends on continuous political stability, policy consistency, and implementation capacity."

Adhikari also pointed out that political parties often ignore the possibility of political instability when preparing manifestos. Furthermore, he argues that the political culture where the constitution, policies, laws, and even the parties' own fundamental statutes are not fully implemented weakens economic goals. He clarified that the goals written in the manifestos will not turn into reality until there is an improvement in practice.

He mentioned that political parties should also clearly commit in their manifestos regarding their own behavior and working style. "How successful have we been in implementing the provisions of the constitution and laws? How much have the party statutes been followed? An self-assessment of this should be included in the manifesto. Politics will only become stable if there is a commitment to improve one's own situation and behavior," he said.

He also commented that the pace of development is obstructed by the tendency of political parties to not agree on agendas even when they are in government together, engaging in politics of vendetta, and failing to form a common view on economic agendas. He also stated that it is important whether the programs in the election manifesto align with the existing policies and plans of the government. He believes that only plans that are program-based, results-oriented, and have clear priorities can yield results.

Economist Dr. Dilliraj Khanal comments that it seems to be a competition among parties to make their manifestos more ambitious and misleading by including many unrealistic plans and not clearly stating where the necessary resources will be mobilized for their implementation. According to Khanal, while it is natural for manifestos to be somewhat ambitious, setting targets that do not match reality is not appropriate. Regarding the commitment to raise per capita income to three thousand US dollars, he said, "That requires an economic growth of 13-14 percent. But how is that possible when the current growth is around four percent?"

According to Dr. Khanal, in countries with advanced democracy, voters evaluate and decide based on how many commitments made in the previous election were fulfilled by the next election. But he states that in Nepal, the declarations written in the previous election are forgotten by the time the next election arrives. He understands that parties are not being held accountable because voters also do not question whether the work was done according to the manifesto. He also expressed concern about the narrative that everything will improve once they are in government.

"The current state of the economy is not satisfactory. Capital expenditure is not happening as targeted, and despite liquidity piling up in the banking system, sufficient investment is not taking place. In such a situation, it will take at least two to three more years to bring the economy back on track," he said. "Parties are coming with the notion that everything will be fixed overnight and a turnaround will happen through the manifesto. Accepting the current situation and having a reality-based reform plan is the need of the hour."

He also expressed concern that manifestos tend to promote only the distribution of funds rather than linking social security with education, health, food security, and production sectors. "Our administrative expenses and the liability of social security are large. But there is no evaluation of how much this amount contributes to national capital formation," he said. He also commented that the tendency to politicize social security and make it distribution-oriented is increasing.

Thus, ambitious manifestos without resource assurance, cost-benefit analysis, and political accountability have become a culture for the parties and the fate of the voters. During elections, parties set attractive targets such as economic prosperity, high growth rate, per capita income increase, free services, and expanded social security, but they do not realistically assess multidimensional aspects necessary for that, such as revenue expansion, investment environment, institutional reform, and political stability.

In the current scenario, manifestos have not been practically implementable due to the situation where revenue only covers ordinary expenses, weak capital expenditure, low investment despite sufficient liquidity, distribution-oriented social security, and the weak monitoring culture of both voters and parties regarding previous commitments. However, they understand that due to the activism of the younger generation and the 'Gen Z' movement, commitments to policy implementation and service delivery improvement are visible in the manifestos. Furthermore, the trend of announcing new plans without evaluating the impact of old programs and continuously adding liabilities has not been eliminated. Although the names change according to the party—manifesto, commitment paper, or promise paper—a fundamental change in thinking is necessary. Changing the cover of the manifesto is not enough. Now, continuity of policy, institutional discipline, and improvement in political culture have become indispensable.

Key Economic Agendas in Political Parties' Manifestos

1. Nepali Congress's Electoral Pledge Paper

The Nepali Congress has declared the next five years as the 'Half Decade of Economic Revival' and stated its aim to bring Nepal's economy to Rs 115 trillion and per capita income to US$ 2500 through second-generation economic reforms. For this, it is mentioned that an investment of a total of Rs 137.5 trillion will be mobilized, of which 80 percent will be mobilized from the private sector. The liberal economy, production-oriented economy, and equitable economy are portrayed as the three main pillars to make Nepal's economy 'Pro-Private, Pro-Growth, and Pro-Social.'

Furthermore, the Congress's electoral pledge paper mentions maintaining a national consensus on a 'Minimum Common Economic Agenda' among major parties so that policies do not change when the government changes. Plans include providing legal guarantees with a 'Stability Clause' so that tax rates and conditions remain stable for at least 10-15 years, providing collateral-free loans ranging from Rs 5 lakh to 50 lakh based on the project for innovative young and women entrepreneurs, and providing up to 90 percent subsidy on agricultural insurance premiums.

Moreover, the pledge paper mentions maintaining financial good governance by ending the outdated style of allocating budgets haphazardly and failing to spend, through fact-based budget formulation, a just tax system, and cutting wasteful expenditure. Plans include exempting the first Rs 10 lakh of personal income from tax to provide relief to the general public from the tax burden, ensuring the maximum rate of personal income tax does not exceed 25 percent, reducing corporate income tax to 20 percent, and reducing the existing single rate of Value Added Tax (VAT) from 13 percent to 10 percent. Congress also plans to implement a model for young entrepreneurs consisting of 25 percent grant, 50 percent concessional loan, and 25 percent self-investment.

2. CPN (UML)'s Manifesto

The Communist Party of Nepal (UML) has published its electoral manifesto for the House of Representatives Election-2082 and announced plans including providing 10 GB of free internet data every month for those aged 18 to 28, adding an annual bonus of Rs 5,000 to the bank accounts of remittance-sending workers, providing interest-free loans of Rs 2 million to 20 lakh students, and providing interest-free loans up to Rs 2 million for students wishing to pursue higher education in technical streams. Furthermore, plans such as free lunch up to grade 10, loan waiver up to Rs 25,000, maternity nutrition allowance up to Rs 20,000, and interest-free loans up to Rs 2 million for women entrepreneurs are included in the manifesto.

It is stated that the base of the economy will be brought to Rs 100 trillion in five years and Rs 200 trillion in ten years through leaps in agricultural productivity, electricity generation capacity, mineral and industrial production, information technology, and physical infrastructure construction, achieving an economic growth rate of seven to nine percent. Per capita income is targeted to reach approximately US$ 3,000 in five years. Plans include completing the East-West railway in 10 years and operating it, completing the Nepal-India cross-border railway in five years, and upgrading the East-West Highway to an expressway.

3. CPN (Unified Socialist)'s Commitment Paper

The Communist Party of Nepal has prepared its electoral commitment paper with the goal of achieving a double-digit economic growth rate within the next five years. This party has also included plans in its election manifesto such as reducing the multidimensional poverty rate from the current 20.15 percent to 10 percent in five years, ensuring an annual employment of five lakh by adding an additional 150,000 jobs every year, and implementing a special employment program for poor, deprived, and marginalized communities.

Agendas brought forward include achieving self-sufficiency in paddy, wheat, maize, vegetables, fruits, sugarcane, milk, and meat within two years, declaring the country hunger-free within two years, expanding irrigation facilities to 80 percent of arable land within five years and installing 10,000 solar irrigation pumps, and providing free registration and tax exemption for five years to startup enterprises.

4. Rastriya Swatantra Party's Promise Paper

The Rastriya Swatantra Party has presented 100 bases for policy departure for transformation through its election promise paper 2082. It is stated that the goal is to maintain an average annual economic growth rate of seven percent at constant prices for the next five years to enable Nepal to become a 'nation with respectable middle income.' Based on this, the target is set to exceed a per capita income of three thousand dollars and the size of the economy to exceed one hundred trillion within five to seven years.

Plans introduced include reviewing the income tax limit based on family burden, completing national pride projects within the next two years, declaring an additional 10 projects as national pride projects and putting them into implementation within the next five years, and returning the savings of all small depositors in troubled cooperatives to their savings accounts within 100 days of government formation.

5. Rastriya Prajatantra Party's Resolution Paper

The Rastriya Prajatantra Party, through its election manifesto, has indicated the need for a 'New Phase of Economic Reform 3.0' and stated that the policy of welfare nationalism and conservationist developmentism will be adopted.

The resolution paper includes provisions such as increasing the economic growth rate above seven percent within the next five years, reforming the tax structure and base, ending double taxation, exploring the possibility of producing strategic goods like 'Rare Earths,' declaring an investment promotion decade under the 'Investment-Friendly Nepal Program,' and deciding to take international development assistance and loans only based on national interest, necessity, and priority.

Plans also included in this party's election manifesto are making a work plan to produce 28,500 MW of electricity by BS 2085 and making all government services completely paperless within five years.