Economist Swarnim Wagle has said the government can afford to announce a relief package of Rs 100 billion to address the economic problems arising due to the COVID-19 pandemic.
Talking in the Barabara Adams Talk Series through video conferencing, the former National Planning Commission (NPC) vice-chair said the government can bring a package of Rs 100 billion stepping on the existing laws to address the problems.
"We have the chronic problem of lack of budget spending. We can redirect the budget halting everything else. We are in a position to announce a package of over Rs 100 billion," he pointed. "It will be late if the government waits to estimate the damages and then take decision. It should provide psychological support now."
Pointing that the service sector, that makes a contribution of 60 percent to the gross domestic product (GDP), has been hardly hit by the pandemic and the resulting lockdown, he recommended the government to give an immediate moratorium of two-three months in paying taxes, fees and fines. "The government can provide a rebate of 5-10 percent to those who paid tax last year. That will act as an incentive or relief to persons who are connected to the formal sector through tax."
He suggested that bridging loans can be provided to firms with conditions that they do not lay off staffers. He pointed that those working in the organized sector can be helped by mobilizing the money remaining idle in the Social Security Fund. "Clause 10(6) of the act about social security fund based on contribution has a provision of bringing unemployment assistance. The fund has billions of rupees."
He stressed that the government should think about those working in the unorganized and informal sectors on daily wages. "The PM Employment Program was criticized last year. It was used to dole out money to the party cadres for chasing away monkeys, cutting grass and other trivial things. Those working for daily wages can be given money through the program if it were operated in a meaningful way. There will be some meaningful work as well," he opined. "Around Rs 25,000 can be given by making them work in accordance to the program's concept of guaranteeing work for a minimum of 100 days."
He also urged the government to think about the shrinking remittance income and ban on workers going abroad for employment. "There is a welfare fund under the foreign employment act. The money in the fund can be used."
He said the pandemic will create challenges for the next eight-10 months and added that the government also has an opportunity to do some work. "We economists say that Nepal has been pinned by the compulsion of being land-locked. But we have the opportunity of digitization now. We can take a huge leap in e-commerce, e-learning and e-banking that was developing gradually until now."
Published Date: Friday, Chaitra 14, 2076, 14:01:00