BUSINESS: Politics rules over economy

The country has not yet come out of the shocks from last three years’ delayed budgets that has literally shaken the foundation of economy, it seemed to happen this year again.
The country has been witnessing lower growth rate since last three years because of regular delayed budgets due to political tug-of war and eroding confidence of private sector. “If the ‘unpopular tradition’ of bringing budget for the regular expenses — of one-quarter of the fiscal year — like last three fiscal years continue this year, the country will plunge into deep economic crisis,” said senior economist Dr Bhola Chalise.
The unholy politics-driven economic crisis has already seen slower economic growth, low revenue mobilisation coupled with drop in growth of engine of the economy manufacturing sector and service sector, he said, adding that the current poor economic indicators are the reflections of political instability.
This fiscal year, the country has seen the lowest growth rate in last three years. The Central Bureau of Statics (CBS) has projected the growth rate at 3.47 per cent — due to lower growth of manufacturing sector and service sector — for this fiscal year, though the government has expected it to be 3.5 per cent.
Another former senior bureaucrat Rameshwor Prasad Khanal agreed that the overall confidence will seriously erode leading to slackening of economic activities, in case of such repeated delayed fiscal policy.
Chalise opined that economics is also the study of human behaviour. “No one wants to take risk,” he said, adding that investors are smart, they keep taking stock of situation before investing as they seek political security above all. Lack of new investment has left less jobs opportunities and delayed budget has made it difficult for the government to spend on the development activities that could boost economic growth in the long run.
As it has become a ritual for political parties to block budget every year, since last four years, to bargain for their petty interests at the cost of country’s economy, noone seems to be giving a second thought for their own future.
The ‘irresponsible act’ neither helps build confidence nor helps the political parties in
the long run. “It will damage political parties in the long run as the political party that obstruct budget will lose popular base,” said former finance secretary Khanal.
source: The Himalyan Times