Bijay Damase

April 12: Finance Minister Janardan Sharma has dismissed claims that the country’s economy was in crisis and urged one and all not to politicize the issue.

Following criticism for the deteriorating economy of the country, Finance Minister Sharma organized a press conference on Monday and claimed that the economy was heading on the right track. He added that the issue was being politicized unnecessarily.

“The country’s economy is not under crisis but attempts are being made to politicize the issue,” said Minister Sharma.

He also said comparing Nepal’s economy to Sri Lanka was tantamount to treason.

“There are rumors that the government does not have budget to hold election and to provide elderly allowance. In fact, there isn’t any such problem,” Minister Sharma assured.

“People are spreading fake news that Nepal will become like Sri Lanka. Such a situation will not arrive as we still have Rs 67 billion in state coffers,” he added.

According to Minister Sharma, Nepal’s foreign exchange reserves stood at Rs 1171 billion as of mid-March 2022 and is enough to support imports for 6.7 months. He further said that Nepal’s total foreign debt amounted to Rs 1800 billion. According to the minister, the government has to pay only Rs 40 billion as installment and interest and therefore Nepal’s situation cannot be compared with Sri Lanka from any angle.

The minister further said that although the inflow of remittance has declined to some extent compared to last year, it is expected to grow in the coming days. According to the figures of the finance ministry, the inflow of remittance as of mid-March in the current fiscal year was Rs 631 billion, which is 4.9 percent less compared to that of last year. The inflow of remittance in the month of Falgun (mid-February to mid-March) was Rs 91 billion.

Investigation against NRB Governor

Finance Minister Sharma clarified that the investigation against NRB Governor Maha Prasad Adhikari is being done in compliance with the laws and the Rastra Bank Act.    

A probe committee was formed to look into the matter and further decisions would be taken upon the recommendation of the report prepared by the probe committee, said Minister Sharma.

A meeting of the Council of Ministers on Thursday (April 7) had decided to investigative into the alleged role of Governor Adhikari in leaking sensitive information of NRB. The Cabinet meeting has formed a committee under the coordination of former Supreme Court Justice Purushottam Bhandari to investigate the matter. The committee has been asked to submit its report within a month.

NRB policy to blame for current crisis

Finance Minister Sharma claimed that the current crisis was a result of the credit flow policy adopted by the central bank. He claimed that the problem has surfaced due to the excessive flow of loan. The finance minister added that he had instructed the governor to limit the flow of credit but to no avail.

“The target of credit flow was 19 percent but the actual credit flow was 32 percent,” said Minister Sharma, adding, “Shouldn’t it have been resolved on time? It is the responsibility of the central bank not the finance ministry.”

He said that the excessive flow of loan should have helped the productive sector but that did not happen due to lack of coordination. The minister said that he had time and again inquired with the central bank about the details of the credit flow but he did not get any response.

“Concessional loans were disbursed, but it was found to have been disbursed haphazardly. The probe committee will investigate this matter,” said Sharma.

Efforts being made to bring economy back on track

Finance Minister Sharma claimed that the revenue collection was also exceeding the expectations.    

In a bid to increase remittance inflow, Minister Sharma informed that a proposal seeking approval for setting up reserve fund for Nepali migrant workers abroad to invest has been forwarded. The draft of the proposal also has provisions to set aside quotas for IPO and FPO for people sending remittance through formal channels, allowing the remittance companies to use wallet and to reduce the cost of fuel used by government agencies.    

Furthermore, he shared that a proposal had been made to temporarily ban the import of expensive and luxurious vehicles and not to allow the government vehicles to be used on public holidays.