Economict Dr. Yadhav Prasad Pant Transforms Fiscal System of Nepal

The First Innovative Economist and Planer of Nepal

Nepal is a mini-world. Physically, Nepal is built of high Himalayas including the highest peak in the world, hills and the low-land Terai. People belonging to different ethnic groups settle here. The soil in this country varies from place to place. The Himalayan region of the north is the store of fresh water and it is ecologically very rich. There are almost 100 peaks in Nepal’s Himalayas. Mount Everest, the highest peak in the world, and Kanchenjunga, the third highest peaks are in Nepal and hundreds of mountains. This country is blessed by the nature with several rivers, lakes, streams and fountains. Nepal has ample sources of water in the form of white gold. Nepal can also be a great store of food-grains if well irrigated and it has high potential of hydroelectric energy. As Arabian countries are god gifted with sufficient Petroleum products, Nepal has sufficient water for hydroelectricity, which can be used to earn foreign currencies. Dense forest, verities kinds of lands, rare animals and herbal plants make Nepal a nature friendly country in many ways. Geographically, Nepal is sandwiched between giant India and China. We are bound to have a balanced understanding between them cordially.

So, the planers are the great sources to develop Nepal maintaining the good relation between the two big neighbors. In this context, Dr. Yadhav Prasad was a very innovative economist of Nepal. The Nepalese people have lost him in 14th Nov.2007, the first economist planer of Nepal who was burn 2th Mansir 1982 Bs. Though he is no more in this world his contribution to the social and economic arenas will be long remembered and his nationalist feelings will be the source of inspiration to many people for many years to come. I regard him as a successful bureaucrat and learned professor. After coming off with flying colors in the election, he became minister and worked for the welfare of the country as a whole rather than try to please a particular group of the society.

Dr. Pant and I were nominated as the RP members of the Rastriya Panchayat (Parliament) by the king on Baisak 1, 2036 BS. Then I got an opportunity to acquaint with Dr. Pant and our relationships became congenial. Born in a remote village, I was eager to comprehend as to how to develop rural areas as a whole and particularly the remote ones and make them prosperous. When I expressed my feelings on these issues to Dr. Pant and Dr. Durgesh Man, they both were much impressed with me. During the symposium of the National Development Council, the view I expressed was so impressive, useful and thought provoking that I immediately got appreciation from Dr. Pant, as he had the capability of recognizing the inner instinct and strength of other people.

Dr. Pant was a pragmatic person, an established economist and a successful writer. He had written several books based on his empirical research. Initially I got the opportunity to study his book, “Rural Problems and Rural Development.” This book broadened my understanding. From it I got the impressions that the country can be developed only after addressing some key issues. For example, development activities should be focused on rural areas keeping in mind that the income of the mass peasantry and labors increases. Similarly the country should make an investment conductive environment in the country so that the private sectors may come to participate in the economic development of the country. This book also helped me comprehend the social and economic status of the country as a whole.

The speeches I delivered in the Rastriya Panchayat (Parliament) and outside, the articles I presented in different papers have explicitly divulged the fact that I am consistent and not confused in my conviction. I wrote what I observed. I am fond of Panchayat democracy. I learnt that king Mahendra was very happy with me because I would not run amuck. Once, on the day I was granted an opportunity to meet the king-2027 BS, the then chief private secretary Mr. Isworeman Shrestha advised me to request the king if I wanted to have any, because the king had been very happy with me. King Mahendra granted me his companionship for two and half hours. Our deliberations were diversified on many issues, but I did not ask for any thing.

After deliberation, king Mahendra wanted to know my view on his speech in Biratnagar. Replying his query, I humbly expressed my disapproval on his comment which followed Panchas had been corrupted and they had been displaying dubious nature. While replying I said, ‘Panchas do not get any remuneration, yet they work enthusiastically. They are dedicated to the service of the people.” In fact, I was a man from the village and did not possess any adequate degree of etiquette that the palace deserved. As I was not known any flattery, I said what I witnessed. During the conversation with the king, I said, “The situation has become worrisome simply because of corrupt practices of senior and opportunist Panchas but not owing to the activities of junior Panchas.” Further I said, “The Panchayat system is being attacked because the dedicated and honest Panchas are being ignored.” Later, I got some information from Mr. Sundar Prasad Shah, the then home secretary about the good impression of the king on me. People were afraid of me because of my straight forwardness. However, Dr Pant had never been far from me.

Dr. Pant was very much impressed with the charismatic personality of king Mahendra. Owing to this and his view of nationality being tantamount to mine, we were close. In the nation building undertaking, he was ambitious but pragmatic. He would take the criticism from any corner of the society as a suggestive lesson and would try to resolve the issues raised by the critics, if it is possible, if not, he would convince them by logical means. Thus he would make people satisfy. For fifty years, he had the opportunity to serve the country. During the period, he was regarded as the most successful person.

Nepal lacked an academic or professional economist until Dr Pant completed his Ph.D. in economics from Banaras Hindu University in 1952. In 1953, he joined the Faculty of Economics at Tri-Chandra College as a Professor of Economics where he labored until he was appointed as the Chief Economic Advisor to His Majesty’s Government of Nepal in 1956. After serving in this capacity for five years he was appointed as the Secretary of Finance in the Ministry of Finance and Economic Affairs in 1961. During his tenure as Secretary of Finance – which lasted six years – he literally transformed the fiscal system of Nepal. Before Dr Pant, the fiscal system of Nepal was primitive, to put it kindly. Once he became the Secretary of Finance, he streamlined the fiscal apparatus with various budgetary innovations. In essence, Dr Pant deserves credit for establishing the foundation of the modern planning and budgeting system in Nepal. Nepal started its planned development process in 1954 with its first five year plan. Dr Pant served as a member and a senior member of the National Planning Commission.

From 1968 to 1973, he served as the Governor of the Central Bank of Nepal (Nepal Rastra Bank). Until Dr Pant became the Governor of NRB, its role was very limited. Banking services were limited to a few urban areas. As an economist, Dr Pant knew the significance of a sound financial system in an economy. To ensure the availability of financial services to majority of the population, he expanded the scope of banking services throughout the nation. In addition, Dr. Pant also streamlined national monetary policy as well as international financial policy. Under Dr Pant’s leadership, the NRB was transformed from a simple currency circulating agency to a very effective, sophisticated central bank. That is why sometime during the 1970s, in an interview with the The Times of India, Pierre Paul Schweitzer, the then managing director of the International Monetary Fund, indicated that NRB was “one of the best central banks in the world.”

From 1974 to 1979, Dr Pant served as the Nepali Ambassador to Japan, Australia, Philippines, New Zealand and the Republic of Korea. As an Ambassador, he was very successful in promoting and enhancing bilateral relationship with all the aforesaid countries. In recognition of his contribution to furthering the relationship between Japan and Nepal, the Japanese government decorated him with “The Order of the Rising Sun.”

Dr. Kamal P. Upadhya notes- ‘Dr Pant was an academician at heart. That is why, despite his busy life as an administrator, he was able to produce many significant works in economics. Most of his writings served as required readings in colleges and universities, not only in Nepal, but also in other countries. When I was in college, one of the required readings in economics was Economic Development of Nepal written by Dr Pant. This was the first ever published material that evaluated Nepal’s various economic planning and policies; policies that were formulated and implemented to achieve faster economic growth. Another required reading was Problems of Development of Smaller Countries. In this book, Dr Pant discusses the general problems faced by people in small, landlocked countries like Nepal. Another one of his books Problems of Monetary and Fiscal Policy; A Case Study of Nepal was probably the first treatise to discuss the monetary policy and fiscal policy problems of Nepal where the central bank is not independent and, furthermore, government revenue is always less than its expenditure due to a very small tax base. The entire list of his works on development and Nepali economy is very long. Most of his works has served as important resource materials for my own research both in Nepal as well as in the United States. I believe that his works will serve as important resource materials for researchers for many years to come. His works on economic development, the Nepali economy, economic planning, and banking and finance remain landmark treatises on the subject’.

Similarly a senior journalist N.P Upadhaya writes-late Dr. Yadav Prasad Pant was a kind hearted soul who could be categorized to have been born great. He added more greatness later to his persona being a top-class economist, a diplomat, Governor of the National bank and finally a minister. To my knowledge, he was successful in all the capacities he was told to serve by the State. Late Pant was markedly different than other politicos. He was a different stuff. He was not only kind but in effect a man who believed in humanitarian values and I conclude that he adhered to these universal values, Vedic values in essence-until his death’.

Nepal is endowed with various natural gifts like perennial rivers, varieties of forests, wild animals, more than 800 species of birds, uncommon and unique herbs (not found any where) among others. Nepal can be a huge storage of food stuff provided the agriculture sector is modernized and the rivers are properly managed to extensively irrigate the lands and to produce hydroelectricity. We have every thing in Nepal. Dr. Pant was concerned as to how effectively the country is to harness these natural resources. For quite some time, the country has become a playing ground of the expatriates. The grand design is brewing internally to disintegrate the country. The intellectuals are indifference to such design. The despicable activities played by distracted intellectuals have further helped accelerate the speed of the grand design. Lots of people are being disillusioned and are being debarred from morality. As lizards do, these intellectual people change their color in order to hold power and money at the cost of nation.

The members of the so called civil society and human rights commission who fancy they to be well conversant and wise in all respects are trying to annihilate the beautiful fabrics of the society. Now the situation has become so profaned that the nation can rely only on the unorganized ordinary people for the bright future of the country. In this scenario, government and semi-government staff could be the real assets of the country. But, most official staff has been dragged into one or other political parties since 2047 BS and this being more so since 2063 BS. Even the army people are being made morally weak and depressed. As a result, the country has not been able to mobilize them properly. The situation has become so disappointing and vulnerable that the country may any time lead to the state of military coup. Dr. Pant was disappointed with this situation.

Dr. Pant had tremendous sway over the economic field of Nepal. He was equally recognized in the international forums. There were no areas in the country where Dr. Pant had not significantly contributed to. Dr. Pant and I being neighbors, we would meet occasionally. His life was full of discipline. He was serene and unflappable. We were worried when he was taken to Bangkok for treatment. We wished for his fast recovery. But unfortunately he did not respond well to the treatment and could not return home alive-14th Nov.2007 (2064 Kartik 28). The country has lost a great sole. We all are grieved for his death. Some people are shriveled up in their retired life with the fire of corruption and injustice undertakings they have committed in their active life. But Dr. Pant is immortal and ever lovable for his honest and responsible behavior.

Email:[email protected]

D.R. Prasai
Dirgha Raj Prasai is a former Member of Parliament in Nepal, a political analyst who writes from Kathmandu.