Govt seeks to identify areas boosting eco growth
With power shortage emerging as one of the bottlenecks for growth, the government has started working to identify areas that could spur economic growth even in the current constraints.
The exercise being led by the Prime Minister’s Office (PMO) and the PM Economic Advisory Council is aimed at making a policy public by the last week of January. On Tuesday, the PM Economic Advisory Council, in the presence of Prime Minister Baburam Bhattarai, discussed some such areas.
With economic growth not being impressive in the past few years, this exercise is being taken as something that will create more employment opportunities and expand economic activities.
PMO sources said airlines, hotel, real estate development outside Kathmandu and agriculture are areas that have been identified as “growth engine,” provided policy bottlenecks are addressed and incentives given.
The government is working on incentives for domestic airlines operators in a bid to enable them to start international operations.
“A market already exists,” said Rameshore Prasad Khanal, the economic advisor to the PM. “If the country has an additional four airlines for international routes, it could earn revenue worth Rs 20 billion.” It is estimated that an additional four aircraft can bring about 250,000 annually.
Given the healthy growth in tourist arrivals and tourism income, the government is also planning to provide incentives to open five star hotels outside Kathmandu and star hotels in the district headquarters.
“Due to lack of quality hotels, many tourists don’t visit the district headquarters,” an official said. “If we can develop good hotels, it will boost both international and domestic tourist arrivals in major tourist destinations.”
As of now, there are no five-star hotels outside Kathmandu and Pokhara.
The agriculture sector is another area that has been given priority in this exercise. The plan is to ensure better insurance coverage for agricultural products to encourage farmers to opt for commercial farming. “In the agri-sector, cash insurance has remained the bottleneck,” Khanal said. “If we can come up with insurance schemes, financing for the sector can surge impressively. And, it will also help commercialisation of this sector.”
With most of the remittance money going to semi-urban and rural areas, the government is also contemplating the possibilities of rolling out real estate development outside Kathmandu. “This will have both forward linkage and backward linkage,” said one private sector representative in the council. “In the forward linkage, service sector (banks, education) will grow while in backward linkage, industries like cement, steel will get business.”
“It is an exercise to identify areas where growth can be accelerated with immediate investments,” said an official involved in the exercise. “It will be made public within the next two weeks,” the official added.
According to a member of the council, the prime minister is serious about the current exercise.
Posted on: 2012-01-11 09:24
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