Former Finance Minister Mahat calls for ramping up investment in productive sector

KATHMANDU: Member of the House of Representatives (HoR) and former Finance Minister, Prakash Sharan Mahat, has underscored the need for boosting financial investment in the productive sector.

Addressing Sunday's discussions on the annual revenue and expenditure estimates for the 2024/25 fiscal year in the lower house of the Federal Parliament, former Minister Mahat cautioned that the nation's economic growth could be hindered if investment in the productive sectors is not stepped up.

"Neither production nor employment can be boosted, nor can revenue be raised if we neglect to invest in the productive sectors by taking loans. The consequence of this is an escalated state debt burden, leading to a situation where additional loans have to be secured to repay existing ones," he elucidated.

Lawmaker Mahat expressed his reservations about the budget, criticising the budgetary allocations for the next fiscal year as 'dispersed'. He contended that the budget should be more citizen-centric than party-focused, and that the allocated budget should be expended based on prioritisation.

He observed that although the size of the budget has expanded, the country's economic development cannot be attained if it is not spent in an orderly manner. "Revenue has not been raised as financial resources are not being channelled into the productive sectors, and jobs have not been generated. The budget allocations for the next fiscal year have not been prioritised and have not been apportioned based on necessity," he stated.

Criticising the budget for allocating funds in such a manner that they will be expended in unproductive sectors rather than productive ones, he declared that the budget allocation to the Ministry of Industry, Commerce and Supplies is inadequate.

The former Finance Minister emphasised the importance of being mindful of the mobilisation and expenditure of financial resources. "The budget for the upcoming fiscal year has not been able to chart a definitive course. We have raised a substantial amount of revenue, but there is no result. Investments have been made, taxes have been levied, but production has not escalated. It is necessary to identify solutions to these issues," he highlighted.

He noted that the state's foreign debt has been on the rise and, although the debt burden of loans taken by the private sector is mounting, the anticipated revenue is not being realised, leading to an economic slump.

Lawmaker Mahat said that cooperative depositors have been encountering problems recently due to cooperative fraud and demanded stringent legal action against individuals who misappropriated cooperative savings in contravention of cooperative laws.