People's Review Weekly

Serious economic recession


The nation is passing through a serious economic recession. Those business leaders are saying that around 50 percent of the shops have been closed around the main business hubs in the Kathmandu Valley. Dasain is the greatest festival of the Nepali people, and it was hoped that the slump market would become active during the festival, yet, people were unable to spend money during the festival season. The consumptio­n of meat was surprising­ly reduced. The clothes market also saw virtually no business. There is the tradition of eating meat and wearing new clothes during the Dasain festival, but this time, they were unable to enjoy the festival by doing so. The market price of daily consumable goods has skyrockete­d, and it has gone beyond the capacity of the general public. Maybe, a small group of the population hold an excessive amount of money and there is a scarcity of cash flow in the market.

Despite imposing excessive taxation on the general public, the government is unable to meet the general sector expenditur­e from the revenue it has received. From the first month of the current fiscal year, the country’s budget is facing a deficit. Nepal relies on total imports as the quantity of exports is very nominal. Factories are not been able to run in a full capasity due to the lack of demand in the market.

The reason is clear. The present political system has been introduced to manage the political workers. Nepal is smaller than many states under the Indian union. Yet, it has introduced seven provinces and the nation is pouring money to feed those political workers in the seven provinces, and local bodies, which is beyond the capacity of the country’s revenue. Remittance has become the major source of revenue for the government. This is not a positive indicator of economic developmen­t. Moreover, the government is insisting on exporting raw labourers to the foreign countries. The minister is found visiting foreign countries and inking labour agreements with foreign government­s. When a government is run by those non-visionary people, the nation can fall into an economic trap. Present Nepal is the best example to study on the economic trap as the country relies on the revenue from imports. If imports are declined, the country will face a deficit in the government treasury. This is an example that the economy is heading towards a reverse motion. A good economy has higher exports and lower imports, whereas, a bad economy is based on lower imports and higher exports. The government manages funds or say necessary foreign currency for importing goods from the remittance revenue. In case, the foreign labour market crashes down, a serious situation the nation will be facing. Also, if the present revenue deficit trend continues, the nation's economy will fail.

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