Finance Secretary States Budget to Attract Private Investment

Kathmandu. Finance Secretary Ghanashyam Upadhyay has said that a budget will be brought in the upcoming fiscal year that will attract private investment. 

Speaking at a meeting of the Finance Committee of the House of Representatives, he clarified that the budget will focus on the government's spending alone not being able to increase productivity, and will be brought with a catalytic role in attracting private sector investment. 

According to him, every unit of government spending should contribute to 'crowding in' private investment, creating production and employment. Citing the example of Nepal becoming self-reliant in cement and electricity due to the government's policy of providing access roads and electricity transmission lines to the cement industry in the past, he informed that the government is working on the budget to expand such facilitation policies to other sectors as well.

Finance Secretary Upadhyay pointed out the need to advance development projects from 'out of government balance sheet' sources as well, and said that for that, the government has already registered a bill related to alternative financial management in the parliament. He stated that if this bill is passed soon, public infrastructure projects to be built with private sector investment can be included in the budget of the upcoming fiscal year with a separate schedule. 

He expressed the commitment that the government will focus on promoting and regulating private businesses rather than operating businesses itself, and projected that the economic growth rate in the current fiscal year will be between 3.5 to 4 percent. He also estimated that Nepal's nominal GDP could reach 73 to 74 trillion rupees in the coming year.

Addressing the unnecessary confusion in the market regarding public debt, Finance Secretary Upadhyay clarified that Nepal's total public debt is currently only about 43 percent of the Gross Domestic Product (GDP). According to him, although more than half of the total debt is domestic debt, more than 80 percent of it is spent on paying the principal and interest of old loans, so it cannot be considered as new actual debt. 

Mentioning that foreign debt is concessional and project-oriented, he said that such debt contributes to financial resources as well as technology transfer. Citing the example of the Nagdhunga tunnel, he said that Nepali technicians are acquiring skills in operating TBM technology and that Nepal will be able to expand such projects with its own manpower and investment in the coming days.

He informed that Nepal's public debt was around 22 to 25 percent of GDP before the earthquake, and has increased to 43 to 45 percent during the reconstruction period. Citing examples of the average debt of least developed countries being 64 percent of GDP and developed nations like Japan and America having debt above 100 percent, he said that Nepal is still in a safe situation. However, he emphasized the need to use debt in productive sectors in a planned manner. 

In the meeting of the Finance Committee, he informed that the government is reducing the number of ministries, abolishing unnecessary structures, and cutting down on staff to control current expenditure, and said that the government is working to end the tendency of adding plans for cheap popularity.