A plan without implementation holds no value. A plan if not executed, will only be limited to ideas and will not bring any gainful results. Nepal has been experiencing the same, with our government unable to implement different plans, policies, and strategies put forth for development. Years have passed without the materialization of various documents and projects like the Agriculture Development Strategy, Trade Integration Strategy, infrastructure projects, plans to provide interest rate subsidies to promote commercialization, among others. Given the substandard performance in the past, the monetary policy introduced by the Nepal Rastra Bank for the fiscal year 2077/78 that aims to address the impact of the COVID-19 pandemic on the Nepalese economy is fated to end up in a similar manner.
The monetary policy has mentioned that banks are to provide at least 15 percent of total loans to micro, small and medium enterprises by July 2024 and special refinance for export and affected industries. The policy also indicates that small and medium enterprises will be provided refinance at a 2 percent interest rate and provision will be made to provide loans to small and medium enterprises for their continuation and operation at 5 percent. Even though the monetary policy consists of provisions that would provide respite to the industries, it is yet to be implemented.
As per the recent report of Nepal Rastra Bank, 22.5 percent of businesses involved in the survey had to introduce job cuts while 18.2 percent had introduced pay cuts for their employees. The major reason behind the abysmal state of the economy is the forced shutdown of businesses by the government which exacerbated other factors like the inability of businesses to accumulate recurrent expenditures, pay interest on bank loans and pay taxes. These challenges are addressed in the current monetary policy, however, the relief measures like tax moratorium and easy access to low-cost loans have not been implemented to date. Problems like lack of refinancing and new financing services still persist and have affected the enterprises’ ability to operate, leading to the shut down of businesses in the country.
Umesh Prasad Singh, the acting president of the Federation of Nepalese Cottage and Small Scale Industries, in an article by the Kathmandu Post, argues the continuation of the situation will cause 90 percent of micro, small, and cottage industries to shut down. The monetary policy came as a ray of light in dark times for the entrepreneurs but the failure in its implementation has made their future blurry.
Our government has forever been lagging behind in the implementation of plans and policies. However, the country cannot afford to confront such lackluster behavior once again, as the times are different and this time, it might mean jeopardizing the entire economy.
Quick implementation of the provisions in the monetary policy is the need of the hour and for the same, the government should work on preparing an execution plan as well as take the buy-in of all the relevant stakeholders for smooth implementation.