The Economic Survey does not envisage Nepal’s transition towards fiscal decentralization and a federal structure.
Only Two Thirds of the Total Picture: The Economic Survey considers the data of actual expenditure only for eight months and the not the full year, therefore it is not representative of the yearly performance. The issue here is that performance over a full year is rarely reviewed with the yearly economic survey always taking into consideration just the first 8 months of the fiscal year.
The Percentage Tangle: Talking in percentage is often the easiest means to confuse as a 10% increase or a decrease in the base of a thousand is often different than the base of the a million. It is therefore imperative to have the numbers cited along with the percentages.
Only Income Based and Not Asset Based: The Economic Survey modeling has not changed in decades, and therefore continues to remain income focused. The key ingredient of Nepal’s economic growth has been increase in asset pricing and remittances, both still not directly considered in GDP computation. It is therefore high time that the Economic Survey have a section on asset pricing.
Covering Up Year End Spending: Apart from regular expenses a very small percentage of capital expenses are made; as the cumbersome procurement process only decides on spending towards the end of the fiscal year; i.e between March and April. This often results in hasty spending towards the last three months of the fiscal year with little accountability. Consequently a system needs to be developed where these expenditures are reported separately in the next Economic Survey.
Preparing for Federal Structure: Lastly the Economic Survey does not envisage Nepal’s transition towards fiscal decentralization and a federal structure. It just accounts for grants made to local institutions, however no accountable recording mechanisms exist. With future spending to be decentralized the entire Economic Survey needs a fresh pair of lenses to look at.
Sujeev is the founder CEO of beed. He leverages over 25 years of experience in diverse fields and geographies to advise, lead and inspire. With comprehensive networks in Nepal’s public, private, civil and diplomatic sectors, Sujeev is a trusted business and policy advisor and respected strategic thinker. From economies of developing countries to economies of human beings, he moves across different worlds, with his passion for the Himalayas being the axis.