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I wouldn't agree. Recently, the World Bank's Nepal chief said in a speech that reforms had slowed during 2005 and that is true but in the last three months many steps have been taken after many years. We have amended the Labour Act. We also made a courageous decision to increase the price of petroleum products.
One of the major conditions of financial sector reforms, bringing wilful defaulters to book, hasn't progressed. The report of a commission headed by NPC Vice Chairman Shankar Sharma has not been implemented.
It's not that the report has been blocked but there are a few things in it that need to be corrected. The report defines the terms wilful and non-wilful defaulters but in those definitions a few points are not correct. What we have been saying is that the two types of defaulters have to be properly defined. In a bid to correct the mistakes, we have formed a taskforce. Once its work is done, the action steps will also need to be corrected.
But there have been allegations that you did not implement the report because of your own vested interests?
That is a completely false charge. Some media have been harping that my father (the late Maniharsha Jyoti) is also on the blacklist of wilful defaulters. It has been 14 years since he died-when he was alive he was unaware of this list. The loan amount was Rs 500,000 but now they say the sum is Rs 9.5 million. How could that be? Moreover, that money should have been repaid by the company, which borrowed it when my father was not in the company. But this is besides the point. I believe in acting on the basis of correct principles. How reasonable is it to make someone repay a loan just because he was a member of a firm's board of directors? This is a procedural problem that needs to be amended.
You mean to say that the system of blacklisting should be changed?
I am not saying that the entire system should be abolished but if someone is to be put on the list, that should be done based on proper principles. The present system is such that if you owned 15 percent of shares in a company and it was unable to repay its loan, then you would be put on the blacklist. This will only discourage investors. That is why I say that incorrect principles like these need to be corrected right away.
The state's income has declined while its expenses have been on the rise and foreign aid has gone down. How will you balance your books?
We are in a position to collect around Rs 12 billion as internal loans, which will solve the problem. We will also focus on making expenses sustainable, in line with our income. We do not intend to cut development spending but the development budget is not being spent and there are indications that we may not be able to spend it in the near future. That would mean we would have some saved money in hand. The government will have to manage the security expenses, which have gone up due to the law and order problem and the parties' unnecessary movement. There is a possibility of resource constraints but we will find a way.
