New finance minister faces an uphill task

The newly appointed Finance Minister Barshaman Pun faces an uphill task of bringing the country’s economy back on track. Over the past year, despite the positive growth in some indicators such as remittances and tourism, there hasn’t been any substantial growth. Pun, who is not a new face in the Finance Ministry, made his name as a pragmatist when he last led the ministry. 

Born in 1971 in mid-western district Rolpa, Pun has held various ministerial positions after his party, CPN (Maoist Center), joined mainstream politics after signing of the Comprehensive Peace Agreement in 2006. As a key interlocutor of the peace and constitution drafting process, he played a pivotal role in Nepal’s peace and constitution drafting process. In the first Constituent Assembly(CA) elections in 2008, he was elected from Lalitpur-1. In 2011, he was appointed the finance minister in the Baburam Bhattarai-led coalition government. Initially Bhattarai faced criticism for bringing in an inexperienced figure to lead the Finance Ministry, but Pun proved the critics wrong by successfully leading the ministry for more than 18 months, although he didn’t get the opportunity to plan and endorse the budget. 

As a finance minister, Pun took a series of measures to systematize the foreign direct investment and diversify Nepal’s loan policy. He introduced 18 national pride projects and took measures to expand the roads in Kathmandu. In this period, Pun also built a working relationship with various national and international stakeholders and economists. 

Pun’s second ministerial stint was with the Ministry of Energy, Water Resources and Irrigation. Under his leadership, the ministry unveiled a white-paper on Nepal’s energy sector and prepared a long-term vision. He also signed an agreement with Bangladesh for power trade, which has now been materialized. 

Pun’s track record as a minister has been impeccable, but this time he is joining the Cabinet at a critical moment. He has entered the office just as the Finance Ministry is preparing the annual budget, something which he could not do during his previous tenure. 

Pun also has the challenge of increasing revenue, controlling expenditure, and directing public expenditure toward priority projects that support growth. He must also resist the temptation to invest in populist programs.  

The budget should aim to maintain a balance between government income and expenditure to alleviate mounting pressure on public finances. Moreover, it should strive to achieve high economic growth and job creation, and bring policies and programs to create demand in the market to give a new impetus to the economy.