Thursday, April 25, 2019

Ease of Doing Business in Nepal

Country’s economic growth and prosperity depend upon the slope of economic activities within the country. Generally, economic growth can be gauged by the Gross Domestic Product (GDP). The economic growth also depends on the capability of the nation to mobilize the available resources (physical as well as human resources).

In fact, achieving and maintaining a reasonably high economic growth is the most challenging task for any nation across the world, even in Nepal. For this, every nation has competitive areas and needs to be recognized so as to strengthen them.

A positive relationship exists between economic growth and the slope of economic activities. The attractiveness of any country with different aspects of the economy measured by different indicators, Doing Business indicator is one of them.

Generally, doing business indicator depicts how a country’s attractiveness in terms of establishing and flourishing business. Moreover, it also gauges how the country’s state of trade and investment climate in the country. This indicator becomes the major indicator for the foreign as well as domestic investors.

Countries which have been creating an investment-friendly climate for the potential, as well as existing enterprises, are the most developed in the world today. Economic growth and prosperity have a direct relationship with the number of enterprises, volume, and innovativeness in economic activities. However, Nepal is one of the weaker performers in this front. This statement supported by the analysis the rank of Doing Business Index. The researchers of World Bank measure 11 variables that they believe are important indicators related to individual businesses.

Nepal stood in the 105th position in the last year but this year the country has dropped to the 110thhinting the weakening state of trade and investment climate in the country as it has failed to simplify the tax payment process.

As we know that creating a favorable environment for investment in the business is prerequisite for increasing economic activities in the economy. Establishment of businesses in the country reflects the light of creating more employment opportunities which increases the level of income and indicates increment in aggregate demand in the economy. Such a result brings more consumption in order to upward the slope of the economy. Moreover, economic activities are highly correlated with the upward slope of the economy.

Establishment of enterprises in the country is one of the foremost pre-requisite factors for the expansion of the economic activities in the economy like the creation of employment opportunities, utilization of available resources, alleviation of poverty, among others. Creation of employment opportunity in the country regarded as pre-requisite for the expansion of the economy since it increases the level of income leads more consumption and finally, increases in GDP.

The notion that the private sector has substantial economic, social and development impact is now universally acknowledged. Promoting a well-functioning private sector is a major undertaking for any government. It requires long term policies of removing administrative hurdles and strengthening laws in order to promote the enterprise in the country as well as increase investment in the competitive areas from foreign and domestic investors.

For obtaining high economic growth the country requires a high chunk of investment in developmental sectors, especially for the country Nepal the government should utilize the allocated fund for capital expenditure. The growth needs a high level of investment in order to increase in the level of employment and income and finally, the country directs towards the path of economic prosperity.

Shanti Joshi

The post Ease of Doing Business in Nepal appeared first on News, sport and opinion from the Kathmandu Tribune's global edition.

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