EDITORIAL
The government is unable to pay around 45 billion rupees in dues to the construction companies, even after completing the projects months ago. According to the Federation of Construction Entrepreneurs, three thousand construction entrepreneurs are unable to get payment from the government.
When the government is unable to clear the bills produced by the construction companies, the size of the government’s capital expenditure is reduced to 22.8 per cent.
Understandably, the government’s general sector expenditure has increased enormously due to the introduction of the federal system. The government’s revenue is unable to even meet the general sector expenditure, therefore, the capital expenditure has failed to meet the target. The government has reached the position that it is raising debts even to pay back debts and their interests. When payments to the construction entrepreneurs are impending, the entrepreneurs are unable to pay their dues to the workers and also construction materials suppliers. This has thus affected the production of the construction materials.
So far, the government itself has created the recession. The housing and land plotting business was doing well. Accordingly, the share market was operating smoothly. When the Nepal Rastra Bank intervened in the market by reducing the ceiling on housing and share market debts, the real estate business and share market collapsed. Today, banks are holding enough liquidity but are unable to invest in the market.
The vehicle business also affected the government revenue after the central bank reduced the limit. This is the lesson that doing any work without better homework would give a negative result. The present recession is created by the government itself. Besides, increasing general sector expenditure after the introduction of the federal structure is the main reason behind the prolonged economic recession. The country’s revenue is totally dependent on imports of goods and if increased import duties, the black market will be flourished. The only permanent solution for ending the economic crisis is to reduce general sector expenditure by scrapping unnecessary organs including the federal structures.
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