Kathmandu. KATHMANDU: CPN (Maoist Centre) Deputy General Secretary and former Finance Minister Barshaman Pun has stressed the need of mobilizing alternative finances for the development of big infrastructures. Taking part in the theoretical discussion on the bill on ‘Provision for mobilization of alternative development finance’ presented by Finance Minister Bishnu Prasad Poudel in the House of Representatives on Tuesday, Pun said that the mobilization of alternative finance in big infrastructure development has been delayed.
He stressed that there should be no delay in exploring alternative finance at a time when the global economy is in crisis, geo-political tensions have limited the possibility of foreign aid or investment and Nepal is soon upgrading from least developed to developing country.
Stating that there is a limitation of resources to invest in infrastructure in the current situation where it is difficult to meet the daily administrative expenses from revenue, he pointed out that alternative capital should be mobilized in collaboration with foreign investment, private sector and Nepali community in foreign employment. He, however, said that the organisational structure proposed by Finance Minister Poudel for the mobilization of alternative finances was weak.
Pun made it clear that the proposed structure like the Branch÷Mahabranch of the Ministry of Finance could not raise and spend for alternative finance. He said that if the structure is built according to the proposed concept, alternative finance mobilization will not benefit and there will be more distrust in the government.
“Looking at the structure proposed by the Finance Minister, it is like a branch÷vision of the Ministry of Finance. How will the joint secretary of the Ministry of Finance sit, the joint secretary of the Ministry of Infrastructure will sit and how will foreign banks come up as green funds?” This cannot be the structure to mobilize trillions of budgets. There should be a competitive organization, which also invests, raises investments, makes investment profitable, earns good income and can also share profits.
He raised money or issued debentures from those living abroad. And it cannot make a profit and there is a possibility of another distrust of the government. He also thanked the government for bringing the bill, saying alternative finance mobilization is a new concept in operation all over the world.
Pun pledged his party’s full support to make the concept a reality by actively discussing the bill and refining it. “We lack the funds to invest in big infrastructure of long-term nature. Alternative finance has emerged as a global new concept of developing operational capital as a resource or fund. We have done some experiments in the past. In that sense, this bill is welcome. Due to lack of public finances, we do not have access to infrastructure investment. We are facing a shortage of capital for further investment when we are not able to meet the ordinary expenses from the revenue. This bill was necessary to fill that gap. I would like to thank the government and the minister for that. ’
He expressed his displeasure over not including the concept of ‘Sovereign Well Fund’ in the bill even though he had introduced the concept of ‘Sovereign Well Fund’ in various countries including the Gulf in last year’s budget. He drew the attention of the Finance Minister and the government to include the issue in the amendment.
Stating that it was not a good thing to stay in reserve without investing more than Rs 3.5 trillion in foreign currency, he said that the remaining investment should be made by keeping the foreign exchange reserves that can import goods and services for a maximum of six months. “Foreign exchange is stuck there. What should have happened was development expenditure. If that were the case, various machinery items would have arrived. There should have been productive investment, but it has not been done and there is reserve. I had said that the remaining money should be mobilized by forming a ‘reserve or sovereign fund’ to sustain imports for six months. It has not come into the bill.
Let’s go in a way that addresses that. Pun expressed the belief that the country would gain momentum in infrastructure development if the government’s 60 per cent investment and the private sector’s 40 per cent investment for the construction of highways, big roads, bridges and tunnels could be implemented.
“We have experience in neighbouring India that 60 per cent is invested by the government, 40 per cent by builders and by road builders. Now we have to work with the private sector to dig a tunnel like Nagdhunga or Siddhababa. Highways, roads and bridges are private. In doing so, you have to compete with companies like Infrastructure Bank (IDCL Hydroe Lectricity Investment and Development Company Limited). ’
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