The Nepali Congress is known for having inaugurated the economic liberalization of the country. Since the restoration of democracy in 1990, the party, founded in 1950, has championed the market economy. The communist forces, which have made socialism their goal, have always treated the Congress as capitalist, “which serves the interests of the capitalists”.
Congress’s push for liberalization after it came to power in the 1990s had drawn strong criticism, particularly from left-wing forces, as state-owned enterprises were privatized and the private sector was allowed to do business without a license in almost all sectors.
One of the main complaints against the free market economy, also known as “neo-liberal” politics at the time, was that the poor who needed social protection were forgotten because the role of the state was significantly reduced.
It has been over three decades, and now that the country is holding its local elections, the second after the country became a federal republic following the enactment of the constitution, Congress has proposed its electoral manifesto with increased emphasis on the role of the state in social protection.
The “big old party” presented itself as the one that supports people from the period of pregnancy to death.
Programs ranging from free medical tests for pregnant women to reducing the age limit for elderly people to receive the Elderly Allowance and providing an allowance for performing funeral rites have been included under the slogan “Kokh dekhi shok samma”—’from belly to grave’.
The manifesto says Congress would give an allowance to people over the age of 65 and give free sanitary napkins to all women.
Other announcements include: a free checkup for people over 40 for high blood pressure, kidney problems, diabetes and uterine cancer once a year; free health test and childbirth allowance of Rs 5,000 for new mothers; free insurance coverage for people aged 65 and over, women health volunteers, extremely poor people, Dalits and single women; free electricity for agriculture, livestock and fishing; and a 50% tariff exemption on electricity for agricultural processing activities.
Political leaders and analysts are questioning whether Congress is taking a left turn in an effort to counter communist forces that have made electoral gains through populist schemes and giveaways.
“Congress seems to be trying to prove that it is more socialist than others and has adopted the socialist model of redistributing the economy, deviating from its policy of free market economy,” Achyut Wagle said. , professor at the School of Management, Kathmandu University. told the Post last week. “After seeing communist forces make electoral gains by promising handouts, Congress also appears to be trying to woo voters with handouts.”
Congress leaders did not disabuse the idea but insisted that the party had not given up on the free and liberal economic model.
“Even though the Congress-led government has introduced several social security schemes in the past, we have not taken advantage of them,” said Govinda Raj Pokharel, a member of the Congress’s central working committee. “So we have now put social schemes at the forefront of our narrative.”
The elected representatives of the Congress say they are aware of the fact that the CPN-UML benefits from the policy of allowances for the elderly that the latter put in place in the mid-1990s.
The government led by Man Mohan Adhikari introduced the old age allowance scheme in 1994, when the country had its first communist government. The allowance was 100 rupees per month. The program was not only continued but later expanded by incorporating single women and disabled people, members of communities on the brink of extinction, Dalit children, widows and Dalits from the Karnali region.
“With the exception of the Elderly Allowance, most other social security schemes, including insurance coverage and social reform measures, were passed under the direction of Congress. But we failed to develop the narrative around these election winning schemes,” said Pokharel, who is also a former deputy chairman of the National Planning Commission. “We have been accused of forgetting the social sector by adopting neoliberal policies. We want to change that narrative.
He, however, said that Congress has not abandoned the liberal economic model as it continues to adopt the policy of promoting private investment, creating jobs and collecting more taxes, which are essential for finance the social sector.
After 1990, Congress was accused of remaining aloof and complacent, paying little attention to the needs of the electorate. He boasted of his electoral base throughout the country. Critics say its leaders felt people would easily vote for the ruling party – or at least make it the biggest party that would give it a chance to lead the government.
But that changed in 2017. The electoral alliance between two communist forces – the UML and the CPN (Maoist Centre) – faced a spectacular defeat in Congress.
The Communists were then elected to power for a full term, a first since 1990.
Congress was left to lick its wounds. But as they say, politics is a game of immense possibilities – the communist government was dissolved in three and a half years, largely due to infighting between the main leaders.
Congress suddenly returned to power with the support of at least two communist forces. After the local elections, which are scheduled for May 13, there are two more elections scheduled for later this year. Congress does not want to waste the opportunity to run the government again. And he resorts to populist stratagems and a free policy.
Analysts and pundits, meanwhile, say political parties’ plans to spend more on social security stem from the constitution, which defines the country as a oriented towards socialism one and speaks of an economic objective which seeks to develop an independent and prosperous economy.
They say the Nepali Congress cannot escape its constitutional obligation either.
“The Congress calls itself a socialist party and has decided to adopt policies that the communist forces want to adopt. So I want to call on all parties, including the Congress, to be left wing,” said Hemanta Dawadi, former chief executive of the Federation of Nepalese Chambers of Commerce and Industry, who has extensive knowledge of the country’s private sector.
With political parties focusing on distributing state resources for electoral gains, experts have long wondered if this is sustainable.
For example, the former KP Sharma Oli administration has increased social security allowances by 33% for all types of recipients for the current financial year 2021-22, including allowances for the elderly to Rs4,000 from Rs3 ,000 per month and the new Sher Government led by Bahadur Deuba continued the policy.
As a result, the budget allocation has increased to 100 billion rupees for social security benefits. Spending on social security means increasing spending on inactive or less active populations and investing there would yield little results.
“Investment in these should be relative to the creation of wealth in the country. Otherwise it will be unfair to the working population,” said Rameshore Khanal, former finance secretary.
But Congress has taken a step ahead of other parties by lowering the age limit for the old age allowance.
The party’s decision comes at a time when the average life expectancy of Nepalese has increased. In 2020, the average life expectancy in Nepal was 71 years, up from 68 years in 2010, according to the world Bank.
“Such a policy will contribute to transforming productive labor into inactive labor, placing a financial burden on the state,” Khanal said. “For a poor country like Nepal, increasing the number of people dependent on the state is not sustainable.
This isn’t the first time Congress has tried to lower the age limit for old age benefits.
Even in January 2018, the Deuba-led government decided to lower the age of eligibility for benefits for people aged 70 to 65.
This was the time when the alliance of CPN-UML and CPN (Maoist Centre), which would later merge to become the Communist Party of Nepal (NCP), came to power. But the new government was not formed. The new government did not implement the decision of the Deuba cabinet.
Congress leader Pokharel, however, defended plans to lower the age limit for old age allowances.
“Data from two years ago showed that the average life expectancy of people in 52 districts was less than 70 years. This means that more people from rich neighborhoods received the old age allowance, but people from poor neighborhoods were denied the allowance due to the higher age limit,” he said. .
However, he admitted that these allowances should only be granted to people who have no alternative source of income.
The Congress manifest is not talking about giving an allowance to the elderly selectively while reducing the age limit.
Former Finance Secretary Khanal says the Congress election manifesto is driven by communist forces, especially the Maoists.
“In fact, the Nepalese Congress, especially Prime Minister Deuba, followed the path of the Maoists,” Khanal said.
Not all Congress leaders are in favor of the distributive programs announced by the party, however.
Ram Sharan Mahat, a senior congressman and former finance minister who was one of the key figures in launching economic reforms in the early 1990s, said he and some of his friends called for revisions to the manifesto to reduce delivery systems and focus on programs that contribute to sustainable economic development.
“People who live below the poverty line should also be supported by social security schemes,” Mahat said. “Our main objective should be high and sustainable economic growth.”
Experts and analysts do not believe that the parties would be able to keep their promises because the country does not have the means to implement all these programs.
The question is whether the government is making money.
Government revenue collection has been well below target in the current fiscal year, with the tax department reporting a deficit of Rs 32 billion in the first nine months of fiscal 2021 -22 in progress.
“Without wealth creation, you cannot distribute wealth,” Dawadi said. “Not all political parties, including Congress, have plans to create more wealth.”
According to him, the distributive programs announced by the political parties would only help to spread poverty as long as the country did not develop its economy.
“The question,” Dawadi said, “is whether to enrich the country first or impoverish everyone first.”