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Implementing federalism is a cost-intensive proposition. As the projected federal budget for the next fiscal year shows, current revenues will cover only half (US $8 billion) of the estimated $16 billion budget. Early indication suggests the government plans to generate an additional $4 billion from foreign aid and domestic borrowing—leaving a quarter of the budget unfunded. That is a sizeable deficit. Finance Minister Yubaraj Khati­wada is already scrutinizing cus­toms collection—instructing offi­cials to follow reference price for import duties to clamp down on the collusion between businesses and officials. This has significantly increased daily collection at key custom points. He is also rolling out an online government pay­ment system to minimize leak­ages. The new finance minister has assured businesses he would not increase tax rates to fund the deficit; instead he would widen the tax net.

Revenue collection can be increased to a certain degree—particularly by bringing more individuals and informal busi­nesses within the existing tax bracket. But keeping up with increasing public and develop­ment expenses in the next few years—including extra-budgetary requests for province and local level infrastructures—would call for a multi-faceted approach.

Local levy

There is tremendous scope for generating revenues for local gov­ernments via a property tax—a sort of an annual levy—based on market valuation. An alter­native formula for taxation can be derived from market rates for housing rents. For instance, families that own concrete homes in urban areas can be charged an annual levy of 1/12th of what they would pay if they were renting an equivalent apart­ment in the local market. This needs to be built upon the current house rent tax that local govern­ments collect. For this to work, an increase in tax will have to result in an increase in munici­pal services. Even now, in many cases, citizens contribute up to 70 percent of the funds for local development projects that direct­ly benefit them: blacktopping of the alley road, constructing sew­age plants, etc.

Policy banks

In any country, the biggest tax contributors are private firms. Naturally, growth of the private sector is central to spreading prosperity and increasing reve­nue base. Two of the big obstacles to private sector growth in Nepal are high cost of doing business and political uncertainty. While KP Sharma Oli’s overwhelming majority in the parliament hope­fully addresses the political uncer­tainty part, reducing the cost of doing business would require tar­geted policy interventions.

For starters, the government can reduce the cost of borrow­ing for businesses through policy banks interventions in the form of a concessional lending and line of credit for select businesses that meet strict criteria. A revolving fund of about $400 million can be established over five years. This facility can be extended to businesses that have high export potential, and thus reduce trade deficit, or to entities that create a certain number of jobs.

For reference, current interest rate on business loans in the US is around 4 percent. Of course, this could foster crony capitalism. Yet if the governance of such policy banks is handed over to an inde­pendent party or a foreign equi­ty investor (five percent return should be lucrative), this could work. A separate policy bank for SMEs could also be formed to similar effect. This can also make lending by commercial banks competitive.

PPP for infrastructure

Innovative use of a private-pub­lic-partnerships (PPPs) model can address funding gaps in public infrastructure development. This can allow the government to spread available resources to several projects. For instance the hybrid annuity-based model (HAM), a variation of PPP, only requires government to pay 40 percent during construction. The rest is paid annually over 15 years. In this period, the private party is also responsible for project operation and maintenance. In this region, the International Finance Corporation, a member of the World Bank Group, has worked with the government of India and state governments to structure such a model to construct sewage treatment plants along the Ganga Basin.

Done right, PPPs can foster private sector growth while allowing effective mobilization of private capital in public sector infrastructure development.

Parajuli is a Kathmandu-based journalist with an interest in public policy

As I write I look at the air quality app on my phone. It shows a reading taken at Phora Durbar at 10.25 am as ‘very unhealthy’ at 276 PM2.5. That purple band across my phone is enough to know it’s a bad day. These little pesky airborne particles that are smaller than the diameter of a human hair are impossible to see but are too easy to get into our mouths, noses, and ultimately, lungs. Leaving the science behind, what the purple band across my phone means is everyone, regardless of how fit, is at risk at that given time.

I take a quick look at Delhi—which is currently at 182 PM2.5 (unhealthy and red), switch over to Beijing, which reads 46 PM2.5 (good and green). What? Beijing is notori­ous for being extremely polluted and Beijing’s air today is ‘good’ and Kathmandu’s is ‘very unhealthy’? I’m rechecking on Beijing and come across a Reuters article from December 2017 which states “Beijing may have turned a corner in its battle against the city’s notorious smog”.

Although the article goes on to say the current winter climate has a lot to do with the lowering of pol­lution and Beijing certainly isn’t out of the woods yet, Reuters gives credit to the Chinese government for introducing tough anti-pollution measures. This is food for thought indeed. There are a number of indi­viduals and organizations in Kath­mandu that are working for better air quality, and they indeed have their work cut out. Let’s give them a hand when we can. And yes, while it’s hard for the average person to make a dent in air pollution, it is possible to take little steps such as not burning rubbish and not having bonfire parties.

Meantime, what can we do now for our own health?

I have a friend who sells special masks designed to filter out pol­lution. I personally wear one of those blue surgical masks. A recent remark by a doctor about the paper masks being a ‘placebo’ got me look­ing at research. Tests have been done and those blue paper masks come out pretty good (80 percent filtration). Not as good as masks especially designed for wearing in pollution (80 to 95 percent). Unfor­tunately the blue mask fails when you take into account it does let air in through the sides when worn by a human and not a test machine.

Hmm… guess we have to either buy a more expensive, firm fitting (hotter) mask, or hold down the sides of our masks when walking! I remember when it was only a few foreigners wearing masks and what strange looks we got. Now I see a large number of locals wearing a mask when going about their lives.

Putting the causes of pollution and the impact on health aside (as if we can really), the other sufferer here is Kathmandu herself. Remem­ber how beautiful it was to look up at snow-mountains from almost any location in town, every day? From many viewpoints the foot hills and high mountains were spectacular in their respective greens and white. Many of us have flown into the valley and seen the crystal clear mountains and hills which take our breath away (in a good way).

We still get glimpses of course, after rain the sky of clear blue is a magnificent backdrop for the Hima­layas, and during the Dashain hol­iday there is less traffic to pollute the skies. But on an ‘average’ day, not so much. And it impacts the global image of the country. For many tourists the name Kathmandu conjures up an image of a green val­ley, white peaks and wonderful her­itage; how disappointed they must be when they arrive to smog, dust and dirt. Naturally when they go home, conversation will turn from their wonderful trek to the terrible air in Kathmandu…

With the end of the Maoist insurgency and the signing of the Comprehensive Peace Agreement in 2006, most civil society leaders probably thought their job was done. What was then considered a near-im­possible task had been completed, and Nepal became a federal republic. Political order was restored and peace, by and large, prevailed. With the announcement of the first constit­uent assembly elections, some civil society activists even joined active politics while oth­ers chose to retire, in line with the idea that civil society’s major role had ended. The major responsibility of institutionalizing the political gains of Jana Andolan II (People’s Movement of 2006) was left to the political parties and their leaders.

Furthermore, because of the mingling of prominent civil society activists with political parties in the lead up to Jana Andolan II and thereafter, civil society leaders slowly began to lose their credibility. A fissure among the prominent names laid the foundation of what was to come: a fractured, fragmented and highly polarized civil society space with little credibility.

Erosion of respect

In the past three decades, the same network of civil society that worked closely in the 1990s and leading up to 2006 on larger issues of national interest slowly crumbled with no concerted effort to pick up the pieces or recon­cile. Instead, leaders began to see the political change and ‘transition’ as opportunities to pursue personal interests.

As a result, in the public eye, civil society was no longer meaningful and was mired in competing interests. Respect was lost with the loss of neutrality. People started viewing civil society leaders as representatives of petty interests. Civil society was divided along the lines of geography, race, ethnicity, gender, political parties, donors and what not. And when respect is lost, so is the capacity to mobi­lize the masses in times of need.

Greater vigilance

From 2006 to 2018, the political parties failed to meet basic public expectations. In the absence of a vibrant civil society, the political parties’ performance went unchecked. They acted recklessly. They institutionalized the politics of spoils-sharing (bhagbandako rajn­iti). Corruption was rampant and impunity received political license. On such vital issues, civil society remained largely ineffective.

Although 2006 was a major turning point for the country in terms of political gains, it was the beginning of a political process that needed the vigilance of a vocal and active civil society. It took 12 years to push through a con­stitution and hold a set of elections, a process that went largely unchecked and in which the erosion of the state was palpable. Nonetheless, that is water under the bridge and the year 2018 has heralded yet another milestone in Nepali politics. This time, civil society must rise up to the challenges that the forthcoming years will bring.

Left domination

There is a left majority in all three tiers of government and the ruling coalition seems poised to garner a two-thirds majority in the federal parliament. There is also a leftist inclination in the Supreme Court (which will be more pronounced once the current CJ leaves). And historically, the majority of civil society leaders and NGOs have leaned left. The president, the vice president and the attorney general also lean that way.

This means all the major state organs and non-state actors are currently dominated by the left. While this could well be a sign of bet­ter days to come in the form of development and prosperity, the situation also calls for an unprecedented role of civil society leaders to demand accountability and integrity from all state institutions.

The civil society space needs to grow and efforts to shrink it must be fought, regardless of one’s political inclinations. In the past decade, the media in many ways played the role of civil society: it continuously exposed cases of corruption, impunity and political misdeeds, but there was no strong civil society movement to act upon them.

And it isn’t easy for the media either. The ongoing “contempt of court” case against Kantipur publication is an example of how the judiciary may be used in the coming days to silence the media. At which point, the responsibility falls on all of our shoulders to speak up in favor of what is just. No majority government or political stability can deliver growth without accountability. That is where our civil society must focus.

Owing to a warning by the Netra Bikram Chand ‘Biplab’-led Nepal Commu­nist Party, Bollywood superstar Salman Khan’s show in Kathman­du, scheduled for March 10, has been postponed. The show rep­resented an assault on our cul­ture and nationalism, the splinter Maoist party argued, and that the Bollywood actor was allegedly taking away the money required for national reconstruction fol­lowing the 2015 Gorkha earth­quake. Similarly, it urged people not to forget the Indian economic blockade following the promulga­tion of the new constitution. In a way, the party made it appear that stopping the show represented a victory of Nepali nationalism: we avenged all the injustices com­mitted by the Indian government by not allowing Indian actors to perform in Nepal. In yet another show of mis­placed nationalism thousands gathered to prove the Buddha was born in Nepal, when it is already accepted by the world that the light of Asia was indeed born in Lumbini, Nepal.

In this day and age, this kind of nationalism only makes us a laughing stock. This is not to say that everything is hunky-dory between India and Nepal. We are neighbors and we obviously have issues with one another. But let’s not forget that our problems with India and vice-versa are between the governments and politicians of the two countries, not between the two peoples—except occasion­ally when some ill-informed and ill-educated Indians claim Buddha and Everest as their own.

The bilateral relation is com­plicated more than it should be because both the partners are way too sensitive when dealing with each other. Our leadership believes India meddles in our internal affairs. But the irony is that the same leaders who are quite vocal about Indian med­dling are the ones who at one or another point have requested the Indian government to interfere on their behalf. Strangely enough, some of our great nationalist leaders were the same ones who requested the Indian government to impose a blockade on Nepal following the ill-advised and ill-timed coup by King Gyanendra in 2005.

Indian leadership views us as ungrateful and insensitive to its strategic interests and believes it has every right to meddle in Nepali domestic affairs because of the help provided to the polit­ical parties in the past. And India defines its interests in terms of our relations with China. This is quite hypocritical. It wants us to limit our interactions with China but then itself maintains good relations with China, barring the occasional border standoff.

The trade volume between India and China is growing and both have focused on developing people to people level ties. Nei­ther do our leaders ask nor do Indian leaders clarify what India will do to help Nepal develop if we limit our interaction/engagement with China. That’s what compli­cates things politically. It’s likely to be this way until both countries have sensible leaders, but that doesn’t mean we should compli­cate other things as well.

Coming back to the postpone­ment of the Bollywood superstar’s show, more than Biplab’s party, our government is to be blamed for it, as argued in a blog post from March 2 on mysansar.com. The show’s “postponement” rais­es many questions but hardly any­one is asking those for the fear of being labeled pro-Indian or being on the RAW payroll. The most important question is: Would the government have remained silent had the Biplav faction issued warnings against, say, a show involving Chinese celebrities? Per­haps the government reckons that cancelling the show of a global Indian cultural icon earns it some brownie points with China.

But if the government thinks that its silence and inaction please China, it is clearly mistaken.

Shows and concerts by foreign celebrities are common in China. It even allows select Bollywood movies to be screened despite a host of problems it has with the Indian government. The govern­ment-owned China Central Tele­vision’s movie channel regularly broadcasts Bollywood movies and songs. Last week, while some of us were issuing warnings against the show by Salman Khan in Nepal, one of his movies, Bajrangi Bhai­jan, was released in China and is doing rather well, according to media reports. Because unlike us, the Chinese know that culture and politics are two different matters and there’s no point in mixing the two. Ah, when will we learn?