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The government has presented its policies and programs for the upcoming fiscal year  in parliament. The programs brought by the government are a mere continuation of the previous fiscal year. Some new programs with attractive slogans have also been included. It remains to be seen whether these programs will be implemented and yield desired results. Political parties, however, have done their part—ruling ones have welcomed it, while those in the opposition have said it lacks direction and most of the programs are unimplementable. 

Nepal has not left any stone unturned in formulating policies, programs and plans to make it a developed nation. However, development works are progressing at a snail’s pace while irresponsibility and lack of good governance are rampant. As a result, the issues covered in policies/programs and budgeted projects remain similar for decades. The country cannot move forward this way. Mere continuity of the tradition cannot yield new achievements. 

Programs like achieving agricultural self-sufficiency, completing national pride projects on time, increasing per capita income, building smart cities, creating jobs, boosting exports and constructing railways are featured in policies and programs and budget speech almost every year. These programs do not yield desired results as neither sufficient budgetary allocations are made, nor sufficient homeworks are done before their announcements. The government brings policies and programs with great enthusiasm every year. However, there is no mechanism to gauge the effectiveness of these policies programs. The effectiveness of these policies and programs are neither reviewed, nor agencies and officials responsible for implementing them are held accountable. 

This situation will persist unless a scientific basis is provided for how the programs will be implemented. So rather than focusing on what programs are included, it is more important to identify which ones will actually be implemented and prioritize them accordingly. For effective implementation of the policies and programs, the government needs to be stable. Even with the same prime minister, frequent changes in ministers and policies have been occurring, let alone the uncertainty of which party will ally with whom to topple or form a new government. Political parties need to be aware that development programs cannot deliver desired outcomes in such situations.

The budget session of the Parliament is set to begin on May 10 with the main purpose of endorsing the budget for the fiscal year 2024-2025. As per the constitutional provision, the government must table the budget by May 28. However, it remains uncertain whether the main opposition Nepali Congress (NC) will allow a smooth functioning of the House session, a prerequisite for tabling and deliberating on the budget bill.

The winter session of the parliament ended following a prolonged obstruction from the NC. This compelled the government to issue ordinances on crucial investment-related laws. The NC has been demanding formation of a parliamentary panel to investigate Deputy Prime Minister and Home Minister Rabi Lamichhane's alleged involvement in the misuse of cooperative funds. The victims of cooperative frauds have filed cases against Lamichhane in Pokhara and other places, but state agencies have shown a lack of enthusiasm to investigate the matter. Ahead of the parliamentary session, the NC's parliamentary board meeting has reaffirmed its stance that an inquiry panel should be formed for smooth functioning of the parliament. Lamichhane and senior ruling party leaders, however, maintain that there is no need for a probe panel specifically targeting Lamichhane. While the ruling parties seem to have agreed to form a panel to investigate overall cases related to cooperatives, the NC insists on a Lamichhane-centered investigation panel. On this issue, both ruling and opposition parties should find a middle ground, as the budget process should not be obstructed for any reason. Currently, with the country facing an economic crisis, people are eagerly awaiting the measures the government will take through the budget to address the situation. Recent history shows that both ruling and opposition parties cannot bear prolonged obstructions of parliament and have to arrive at a middle ground. 

Our political parties are adept at seeking win-win solutions through abstract and vague compromises. They can apply the same formula this time too. Both the ruling and opposition parties should act responsibly to end parliamentary obstructions without delay. There is no doubt that questions surround Lamichhane, and people want to know the actual status. The only option for political parties is to pave the way for an investigation against Lamichhane while also allowing parliament to function smoothly. Parliament should be allowed to hold discussions on various aspects of the budget, which is the main duty of our lawmakers.

The government is preparing to summon the summer session of the parliament, or the budget session, from as early as next week. As per the Constitution of Nepal, 2015, the government must bring fiscal budget on May 28.

Except for some bright spots, the Nepali economy is passing through a challenging situation marked by diminishing demand and sluggish growth. Banks, which have lending capacity of over Rs 600bn, are seeing a lack of demand for loans as the private sector is not making new investments. The central bank's efforts to stimulate the economy through monetary easing have not yielded desired success. Purchasing power of consumers is dwindling due to factors such as youth outmigration and the lingering effects of previous interest rate hikes. These developments have eroded the consumption base that fuels economic activity. This has left businesses struggling with unsold inventories and underutilized production capacities. While the central bank has lowered interest rates to historic lows, this has become ineffective as there is not much improvement in consumer demand.  

It is evident that monetary measures alone cannot revive the economy. A combination of both monetary and non-monetary reforms that foster collaboration among the government, central bank, financial institutions and the private sector is what the economy needs. Non-monetary reforms should address structural issues hindering economic growth. Measures to boost employment opportunities can limit the outflow of potential consumers. Simultaneously, initiatives to improve productivity and competitiveness could bolster the private sector's confidence to invest. Furthermore, the government must play a catalytic role through targeted fiscal interventions. Expediting capital expenditure and clearing outstanding payments of construction entrepreneurs can provide an immediate boost to economic activity.

The National Statistics Office has forecast 3.87 percent GDP growth for the current fiscal year, which is more or less similar to the projections made by the World Bank and the Asian Development Bank. This shows a significant improvement compared to the previous fiscal year.  Addressing the demand-side constraints through a mix of monetary and non-monetary policies is crucial to continue this momentum.

On April 28 and 29, Nepal is hosting the 3rd Nepal Investment Summit with the aim of attracting foreign investment for the country's major infrastructure projects. For a long time, there has been a widespread perception among the international community that Nepal presents numerous policy and bureaucratic hurdles for investment. However, this perception is only partially accurate, and there are many misunderstandings about Nepal's investment climate.

While the decade-long insurgency, followed by a prolonged transition period and ongoing political instability, undoubtedly created an unfavorable environment for international investors, these factors alone do not fully explain the lack of foreign direct investment in Nepal. One of the main arguments put forth by the diplomatic community is the lack of policy consistency in the country. However, if we look at the past 10 years, with the exception of a few development projects, there has been relative policy consistency in the country. When it comes to attracting foreign direct investment, there are no major policy disagreements among the major political parties. For instance, the government has issued ordinances to amend nine laws in line with the demands of international investors, and there is no disagreement among the major political parties on this matter. Regardless of whether the government is led by communist or other parties, all are seeking international investment, and there is no disagreement on this front.

Another argument often raised is the lack of political stability in Nepal. While it is true that there has been instability in the past, there has been a degree of political stability following the promulgation of a new constitution in 2015, as elections for all three tiers of government are now held every five years. There are no hostile political parties or groups actively obstructing or discouraging foreign direct investment in Nepal. Concerns raised by the international community, such as tightened labor laws or difficulties in exiting the market, have been substantially eased over the past few years. While issues of corruption and bureaucratic red tape still exist to some extent, there has been progress in addressing these challenges. It is also true that some foreign companies have taken undue advantage of Nepal's poor governance systems. Despite these challenges, Nepal remains an ideal destination for international investors due to its strategic location bordering the large markets of India and China, its youthful population and other factors. 

While Nepal may not achieve full political stability within the next 5-10 years, the current political situation does not pose any significant threats to the international investors.. There is an all-party consensus regarding the investment summit, with no prominent opposition voices raised against it. Therefore, international investors should not be overly influenced by narratives claiming an inappropriate environment for investments in Nepal. At the same time, the diplomatic community should be cautious about misleading their respective investors through flawed briefings about the political situation in Nepal. Despite some occasional street protests, Nepal has largely remained a peaceful country since signing the Comprehensive Peace Agreement in 2006.