Government Unveils 408-Point Action Plan for Economic Reform Implementation Within Three Years

The Government of Nepal has formulated a 408-point action plan to implement the recommendations of the High-Level Economic Reform Commission led by Rameshwor Khanal within three years. The plan designates responsible agencies to carry out specific reforms aimed at stabilizing and strengthening Nepal’s economic foundation.

Key provisions include Nepal Rastra Bank maintaining foreign exchange reserves that can cover 5 to 7 months of imports, and providing fixed interest rate loans to productive and export-oriented sectors. The Ministry of Finance will facilitate this by creating a conducive lending environment. First-time home buyers with stable income will also benefit from fixed interest rates on housing loans.

The action plan also focuses on narrowing the interest rate spread between credit and deposits to reduce banking operational costs, increase financial sector efficiency, and ensure stability. Nepal Rastra Bank is expected to adopt a policy within a year to maintain positive real deposit rates and keep lending rates in single digits or low double digits. The development of the bond market is also targeted to manage interest rate volatility in the economy.

Additionally, the Ministry of Finance is tasked with ensuring the availability of alternative financing at low interest rates within a year. This effort will be monitored directly by the Prime Minister’s Office and the Council of Ministers. Reforms also include reduction in government spending and indirect taxes, aiming to make goods and services more affordable and reduce black market activities.