Santosh Acharya's Blog

I was looking for the dynamics of fiscal and monetary policy in the Nepalese economy.   Both have a specific economic and political explanation, though monetary policy stands more economic connotation than the fiscal one. Although the central bank has a specialized department and relatively competent human resources, even their document seems are unable to get the real picture of the economy. Since 2004/05 to 20015/16 inflation remains higher than the GDP growth in Nepal. It happened not just like it to be.  In reality, it was committed because of the political, structural, and market-based phenomenon that are not even looked for a reason. I have gone through another aspect to analyze the Nepalese economy whether it is 'paradigm shift '. Reviewing the documents and consulting with then officer bearer, I am almost convinced with the situation of 'paradigm lost' rather in Nepalese economy. Simply this conclusion is driven due to the failure of understanding the...

Generally in federal countries, Sub-national governments (SNGs) receives intergovernmental grants to finance their assigned activities and implement national policies. Grants are used to subsidies of services and equalization of the grants. However, the allocation of grants is found to be complex in its governance (OECD, 2006).   According to the world bank , the government introduces intergovernmental transfers for four reasons. First one is to maintain the vertical balance. Vertical imbalances arise between the SNGs due to the imbalance between the expenditure responsibilities and revenue raising power, this may cause to a deficiency in service delivery made by SNGs. The second reason is to equalize the capacities of the resources while in SNGs, their revenue raising capacity varies. Third one is the externalities . Due to the low revenue capacity SNGs under-spend where substantial external benefits ensure-like spending on health and education by their own resources. An...

पृष्टभूमि नेपालको आर्थिक बृद्धिदर विगत दुई वर्षमा औसत ६ प्रतिशतभन्दा माथि रहृयो । आर्थिक वृद्धिले प्रत्यक्ष र अप्रत्यक्ष गरी दुई पक्षलाई समेट्छ । आर्थिक वृद्धि हुँदा देशमा उत्पादन बढेको , रोजगारीका अवसरहरु फराकिलो हुँदै गएको , व्यक्तिको क्रयशक्ति वढेको जस्ता विषयहरु प्रत्यक्षतर्फ रहन्छन् । अप्रत्यक्षको पाटोमा चाहिँ देशभित्र आर्थिक रुपमा नै सक्रिय व्यक्ति , व्यावसायिक समूह/वर्ग (स्वदेशी , विदेशी) मा भविश्यप्रति सकारात्मक अपेक्षाको सञ्चार हुन्छ । यसको कारण अर्थतन्त्र पुनः चक्रीय आर्थिक वृद्धिको क्षेत्रभित्र प्रवेश गर्दछ । देशले जति धेरै आर्थिक वृद्धि हासिल गर्‍यो , त्यसले प्रत्यक्ष र अप्रत्यक्ष दुवै पक्षलाई वृहत बनाउँछ । परिणामस्वरुप बेरोजगारीको समस्या समाधान हुने , स्रोत र साधनको उच्चतम प्रयोग हुने , निर्यात गर्न सक्ने क्षमताको वृद्धि हुने , वैदेशिक मुद्राको आर्जन बढ्न सक्ने , सोधान्तर अवस्था सकारात्मक हुने जस्ता सूचकहरु देखिन्छन् । यसर्थ कुनै पनि अर्थतन्त्रमा आर्थिक वृद्धि सधैँ अपेक्षित रहन्छ । आर्थिक वृद्धिको यत्ति धेरै सकारात्मक आयाम हुँदाहुँदै पनि कुनै पनि देशले चाहेजस्तो वृ...

The wide trade deficit has become the normal phenomenon of the Nepalese economy. Liberalization has been initiated with the expectation that there will be the free flow of goods and services through which reciprocal benefit can reap up through the country's export, import and industrial development. Considering the same line, Nepal became the 154th member nation of WTO in 2004. The Nepal Trade Integration Strategy  (NTIS), 2010 has introduced in which 17 product are targeted to strengthen the competitiveness of the Nepalese trade and later it was upgraded by NTIS, 2016 that recognizes potentials for product and value chain development in sectors: i). Agro and forest products (cardamom; ginger; tea; and medicinal and aromatic plants); ii). Craft and manufacturing products (all fabrics, textile, yarn and rope; leather; footwear; chyangra pashmina; and, knotted carpets); and iii). Services (skilled and semi-skilled professionals in various categories; Information Technology and Busi...

Dr Yubraj Khatiwada When Dr Khatiwada joined the office as a governor, most of the macroeconomic indicators were forced people to ask whether Nepal is going to be a failed economy. The credit crunch, high inflation and low economic growth were the major challenges in front of him. At the end of his tenure, he gained faith from the people that he protected the economy through micro-monetary management. He framed the monetary system of the country. He introduced Merger and Acquisition aiming to minimise the cross holding in different banks. Later on, it became the best tool to stabilise the banking system of the country.  His best effort was found in real estate investment, in which he caps the banking lending, which becomes a turning point for protecting this industry from an accident. His practices towards using monetary instrument were significant. His personality worked on implementing the monetary policy throughout his tenure. Unfortunately, he was unabl...