Kathmandu ,The High-Level Economic Reform Commission (HLERC) has recommended the government to deploy empowered teams to regularly monitor and resolve issues on-site for all development projects with budget allocation above Rs. 100 million in order to increase capital expenditure in the remaining months of the current fiscal year 2024/25.
Chairperson of the HLERC Rameshore Khanal submitted the interim report to Deputy Prime Minister and Finance Minister, Bishnu Prasad Paudel on Wednesday.
The Commission has recommended prioritising payments for completed construction works without initiating new contracts in the current fiscal year and incorporating new projects in the next year’s budget only if commitments for ongoing multi-year contracts are met.
To accelerate capital expenditure, the HLERC has suggested expediting reconstruction of infrastructure damaged by disasters including floods, landslides and Jajarkot earthquake, initiating fast-track land acquisition compensation for government projects, and facilitating smoother entry for Indian tourists via overland routes.
Likewise, increasing capital expenditure in the remaining period of current fiscal year, ensuring prompt payment of government liabilities and other dues, supporting genuinely distressed borrowers in the financial sector, and creating policy framework to regulate trade credit effectively are also the major suggestions.
According to the Commission, there is a need to reassess the subsidy programmes as well as subsidy schemes under concessional loan facilities. Similarly, resources should be allocated so that they could make positive impact on production and employment. It suggested increasing health insurance premiums as well as the co-payment ratios – which is now set at 10 per cent of the total treatment cost.
It also has recommended addressing the increasing non-banking assets and depressed real estate markets through the establishment of an asset management company under public-private partnership model. It asked to allow one-year loan restructure for the businesses and industries that were viable before the COVID-19 pandemic era but are in temporary trouble now.
Addressing the issues in teh cooperative sector has also been the priority of the HLERC. It suggested addressing the problems of sick cooperatives, restricting the operational scope of savings and credit cooperatives to a single local government’s jurisdiction and barring organistions from becoming the members of cooperatives.
It has also suggested setting single-borrower limit to restrict total loans per individual below 10 per cent of a cooperatives total share capital. Similarly, suggestions include prohibiting loans exceeding permissible limits through multiple promissory notes, and enforcing legal provisions similar to the single-borrower limits in financial institutions.
The government had formed the HLERC three months ago comprising experts and private sector representatives, to provide strategic recommendations for economic revival.
