Experts highlight inadequate spending as key factor in country's economic challenges

NAWALPUR: Experts have said that the country's economy has faced significant hurdles due to insufficient utilisation of funds within the country.

They said so during a programme organised to commemorate the 46th foundation day of Vijaya Development Resource Centre (VDRC-Nepal) in Gaindakot, Nawalpur district, on Wednesday.

Kathmandu University Registrar and Economist Prof Dr Achyut Wagle pointed out that the lack of capital expenditure poses a major challenge to the country's development. Despite allocating approximately 18% of the budget for development, only 40% of this allocation is effectively spent. This underutilisation of funds significantly impacts economic growth.

Furthermore, the rising trend of Nepali citizens seeking foreign employment reflects a shift away from relying on the state for economic support. Experts expressed their belief that citizens have stopped expecting substantial contributions from the government.

Namrata Sharma, an expert in institutional development and good governance, attributed economic problems to distortions in traditional borrowing practices and financial networks. Insufficient financial literacy among the general public has led to cases of fraud in financial cooperatives.

President of the Nepal Federation of Savings and Credit Cooperative Unions, Chandra Prasad Dhakal, highlighted governance issues within some cooperatives. He said, "Lack of effective governance has contributed to problems in these financial institutions."

Badri Kumar Guragain, Chief Executive Officer of National Cooperative Bank, raised concerns about credit risk in financial cooperatives. The prevalence of bad loans has added to the challenges faced by these institutions, he said.

In addition to discussions on challenges, the programme also featured presentations on successful cooperative practices. Keshav Prasad Sapkota, Executive Director of VDRC-Nepal, facilitated the group dialogue, while Prem Prasad Sapkota, President of VYCCU Savings and Credit Co-operative; and Phulmaya Moktan, Chief Manager of Mahila Milan Saving & Credit Co-operative Society; shared insights into good cooperative practices.

VDRC-Nepal President Krishna Prasad Sapkota provided an overview of the organisation's ongoing activities, emphasising their commitment to addressing economic issues and promoting sustainable development.