National Planning Commission Vice Chairman Dr. Gunakar Bhatta Emphasizes Structural Reforms for Nepal's Economic Growth

Kathmandu. National Planning Commission Vice Chairman Dr. Gunakar Bhatta has stated that structural reforms, institutional strengthening, and efficient management of resources are essential to achieve high and sustainable economic growth in Nepal's economy.

Discussing various dimensions of the budget and economy at a program, he mentioned that balancing development, good governance, and democracy is the main challenge at present. Vice Chairman Bhatta emphasized the need to maximize the utilization of the five main pillars of Nepal's development, the '5-Ds' (Democracy, Diversity, Demographic Dividend, Digitization, and Diaspora). He argued that achieving the goal of high economic growth would not be difficult if democracy, geographical diversity, demographic benefits, technological use, and the skills and capital of Nepalis living abroad could be integrated.

Analyzing the structural state of the economy, Dr. Bhatta identified internal and external migration and premature 'de-industrialization' as major challenges. He also stated that about 40 to 45 percent of the economy is still in the informal sector, and it needs to be brought into the formal domain to make revenue mobilization and economic distribution effective. Vice Chairman Bhatta expressed concern that despite a significant increase in the budget size, the proportion of capital expenditure is continuously declining.

He informed that while in the past, two-thirds of the total budget was allocated to capital expenditure, it has now been limited to one-fourth. He analyzed that it is becoming difficult to mobilize resources for development construction as the government's mandatory liabilities such as social security, subsidies, and loan principal-interest payments are increasing.

Considering the private sector as the main beneficiary and stakeholder of the budget, Dr. Bhatta pointed out the need for institutional strengthening and good governance in both public and private sectors. He urged attention to 'Corporate Governance', warning that activities for short-term profit could lead to long-term crises.