One day after making public the white paper on the status of the national economy, finance minister Dr Ram Sharan Mahat disclosed that the government is planning to bring in a massive rural investment plan.

Speaking at Reporters Club on Tuesday, Dr Mahat said the proposed plan would emphasise employment and income generation in order to revitalise the rural economy. “The plan will focus on reconstruction and rehabilitation of infrastructure as well as economic activities,” he added.

Although Dr Mahat didn’t mention when the plan would come into force, he said that the programme will focus on sustaining peace by means of developmental activities.

Dr. Mahat’s statement came one day after the Maoist supremo Prachanda, during an interview with local FM in Palpa, urged the government to allocate 50 percent budget for the rural development and to feed Maoist rebels.

He also asked the Maoists to create a conducive environment for industrial activities and stop extortion targeting industrialists. “In the current industrial climate, neither domestic nor foreign investors will be willing to invest in new ventures,” he said.

On the current macroeconomic situation, he said the Nepali economy met with a serious problem due to unproductive spending by the royal government. “Development work has been stalled, giving a blow to the economy,” he said.

Dr Mahat also reiterated that the government would completely scrap the unnecessary and unproductive expenses of the Royal Palace, and stop recruitment of any security personnel and purchase of military goods.

Stating that the country is passing through a critical juncture in its history financially and politically, Dr Mahat urged the private sector and concerned stakeholders to cooperate and act accordingly for revival of the economy.

He also urged the Maoists to stop extortion and forced donations in order to create a congenial environment for the peace process.

Commenting on the government’s effort to seek aid from donors, he said the government is going to hold a meeting with donor communities on Wednesday to get international community’s help in development activities.

Referring to past expenditures, he said the government would take action against those in the royal government who spent money recklessly, if it is possible to punish them under existing laws.