Increasing state debt makes it more difficult to raise funds for development: Minister of Finance Paudel

According to Bishnu Prasad Paudel, the deputy prime minister and minister of finance, it is difficult to raise funds for growth because developing and poor nations' capacity to raise internal revenue is waning and their public debt load is growing.

At the United Nations-hosted "Dialogue on Finance for Development" on Tuesday, Finance Minister Paudel stated that low revenue collection and growing public debt obligations are contributing factors to Nepal's problems. The Ministry of Finance and the Federation of Nepal Chamber of Commerce and Industry organized the event.

These nations are more vulnerable to the consequences of climate change. According to Finance Minister Poudel, the huge trade imbalance, sluggish economic growth, and falling trend of development aid are the main causes of the issues facing emerging and underprivileged nations. Additionally, he advocated for the employment of novel and unconventional approaches to development financing.

Paudel emphasized the necessity to design the development finance framework so that, aside from internal resources, all other sources—including private capital and development aid—are utilized to the fullest extent possible. Despite the fact that the revenue to GDP ratio is comparatively favorable, he stated that maintaining it would be difficult.

According to Bishnu Prasad Paudel, the government's commitment to use the majority of earnings for public debt repayment means that less money will be spent on social security and development initiatives. This has made it more likely that the will to achieve sustainable development's objective will be pushed aside. Despite the fact that the public debt is at a safe level, it appears that difficulties will only become worse. Nepal's economy has long suffered from structural issues such as a high trade imbalance and slow economic growth rate. The country has also been adversely impacted by climate change. We will need to set aside a substantial sum of money for adaptation even though our contribution to carbon emissions is minimal given how disproportionately affected we are. Nepal supports the collection of fresh resources and instruments for development financing because of this." The involvement of the private sector has been given increased weight in the 16th periodic plan. The government and the private sector work together. Our objectives are one and the same. The government is determined to establish the conditions required to boost investment from the private sector. To raise money, a list of profitable projects must be prepared and a development financing blueprint must be developed in order to draw in private investment.