Prolonged transition waters down ambition of national prosperity

Eight years have passed since promulgation and enforcement of Constitution of Nepal, 2015. Socialism-oriented economy is the ultimate destination set by the constitution. But, examining the national affairs from the socio-economic perspectives, these past eight years are slow off the mark.

As the majority of citizen's aspirations are not met, there is growing despair. The number of people leaving abroad- for jobs, for study is on the rise, while those willing to stay back and do something at home seem disappointed. Experts on the national economy view that though the system changed, people's condition has not changed for the better. They further argue that political instability and protracted transition took toll on the national ambition of prosperity.

Former Vice Chairperson of the National Planning Commission, Dr Pushpa Raj Kandel, viewed that the economic agenda was shadowed because of political instability following the promulgation of the Constitution. Political wrangling put the economic agenda on the back burner. Nepal has been facing a similar plight since 1990, he added.

"It seems the spirit and principles of the Constitution depend more on ideals. The objective and goal of the Constitution and the conduct are quite contradictory," Dr Kandel viewed, adding, "Constitution has envisioned a welfare state, socialism-oriented economy which is an ideal state. But the enforcement aspect shows digression from the goal. The transition is much."

He further viewed all political parties and leaders call themselves devoted to development and prosperity, but they are in fact not. "It seems, all are responsible, but in essence, none is so. Importantly, who is the one to own up the degrading situation? It is unclear. Instead of speeding up development works and economic prosperity measures, the government is working in a way to take revenge. Instead of bettering oneself, belittling and degrading others is focused, which is wrong," Dr Kandel reminded.

According to him, one and half decade went in vain due to political instability. It has taken a toll on the country's long-standing journey towards prosperity.

"Once a country's economy is weak, it has an adverse effect on social psychology. The society that wants change quickly is now irate. We have a tendency to compare ourselves with others. We are focused more on others' duty while ignoring our own," he expressed worry.

Similarly, Professor at Central Department of Economics at Tribhuvan University, Dr Sanjay Acharya, said citizen's aspiration of improvement in their lifestyle did not change despite change in governance and State affairs. "If there were noticeable improvements in health, education, and employment, all could feel that the country was headed in the right direction," he said, "Millions of Nepalis are abroad for lack of opportunity here. It has given a message that there are no opportunities and potentials inside the country. This is quite alarming."

Dr Acharya further informed that 600 thousand Nepalis left the country for jobs while 200 thousand Nepalis for higher study last year alone. He suggests political parties and government to pay heed to fiscal federalism. There are numerous complaints of people on fiscal federalism.

The sub-national governments have imposed unnecessary tax, thereby making the new system complicated. Governments also need to improve their spending capacity. Decrease in production and export is equally a worrying factor.

Moreover, he described fiscal transfer and revenue sharing as being ineffective. The concept of project banks and Mid-term expenditure framework (MTEF) have not been enforced at province and local levels. Trend of spending huge chunks of the budget at the end of the fiscal year has not ended. Capital formation is difficult but regular spending on rise.

However, the government has expressed its commitment to strengthen fiscal federalism through the current fiscal year 2080/81 budget. Point no 428 of the budget states that the Local Government Operation Act, 2074 and Intergovernmental Fiscal Management Act, 2074 would be amended based on implementation experiences so far.

Nevertheless, if all the political parties make the economic agenda the first priority and move forward, there is still hope of improvement in the economy. Former NPC vice chairman Kandel says that since the remittance flow continues to improve it will provide sufficient revenue and the economy will improve if only a little confidence can be created. If capital expenditure is increased and infrastructure projects currently under construction speeded up it will certainly accelerate the economy.