KATHMANDU, April 17: The High-Level Economic Reforms Advisory Commission has pointed out serious flaws in the appointment of regulatory bodies by the government at a time when the government has been dilly-dallying on appointing the governor of Nepal Rastra Bank (NRB).
A study report submitted by the Rameshwar Khanal-led commission to the government last Friday stated that the general public is losing confidence over the government’s regulatory bodies mainly due to the decisions made in favour of vested interest groups.
“There is growing perception that the regulatory bodies are falling under the influence of vested interest groups,” reads the report.
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Of late, the government has failed to force a consensus on appointing the NRB governor after the tenure of the outgoing governor Maha Prasad Adhikari expired on April 4. The government’s failure to take a decision even after 12 days has created a void in leadership of the apex body which is liable to regulate the overall monetary affairs of the country at a time when the country’s financial system has been struggling for over a year due to economic slowdown.
As the leaders are busy in political bickering and in favour of a quota system, the government formed committee tasked with recommending candidates has been rendered ineffective. The committee is led by Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel that incorporates former Governor Bijay Nath Bhattarai and former Vice-Chairman of the National Planning Commission Bishwo Paudel as members. Even the Supreme Court has intervened on the government's attempt to revise law related to age limit on the appointment.
However, the government has claimed that a consensus has been reached at the highest level regarding a new candidate for the Nepal Rastra Bank governorship. “The top leaders of ruling parties have decided to appoint the NRB government soon,” said Prithvi Subba Gurung, spokesperson for the government at a press meet on Wednesday, citing the upsurging criticism against the government over the issue.
According to analysts, the subsequent appointments of political persons in regulatory bodies including the Nepal Insurance Authority, Nepal Stock Exchange and Securities Board of Nepal, that courted controversies in the past few years have also enraged the public sentiments against the government.
NRB officials, however, expressed that the governor should be appointed based on the candidate’s ability to streamline the country's monetary system, rather than through political consensus. “The individual must be able to make independent decisions, not be chosen based on political interests,” said an NRB official on condition of anonymity.
Khanal led commission has also expressed serious concerns about ongoing economic slowdown in the past few years. The report states that while overall demand-side factors remain weak, demand-side policies alone cannot address the immediate economic issues.
The commission recommended necessary policy interventions to improve demand in the short term. It also suggested structural reforms on the supply side to create an investment-friendly environment, reduce production costs, and boost competitiveness for sustainable economic growth.
