With only two weeks left for the new federal budget, the Nepali private sector is busy lobbying with Finance Minister Dr. Prakash Saran Mahat to get its demands addressed. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Confederation of Nepalese Industries (CNI) have already met the finance minister and presented their suggestions for the federal budget of FY 2023/24 while the Nepal Chamber of Commerce (NCC) is presenting its suggestion on Friday.
Hard hit by the economic slowdown, falling market demand, and high borrowing rates, the private sector wants the government to bring the budget that would bail it out from the current crisis. Business community members are looking for a fiscal policy that will instill confidence, create an investment-friendly environment, and provide tax and refinancing facilities to support the ailing businesses.
Declare the next five years as investment years: CNI
CNI has urged the government to declare the next five years as ‘investment years’. The private sector body has said that the emphasis should be on bringing an investment-friendly budget. “It is necessary to increase the massive investment from the government and private sector to boost the economy,” CNI stated in its budget suggestions.
According to CNI, it is looking for a budget that emphasizes industrialization, export promotion, import substitution, promotion of indigenous products, and market regulation.
The confederation has demanded to provide cash subsidies for the export of goods, to make Nepali products competitive in the market, and to control unauthorized trade. It has also suggested formulating and implementing the Payment Security Act for the safe recovery of credit dues from the market.
CNI has requested the government to operate the proposed Shaktikhor and Mayurdhap industrial areas in a public-private partnership model.
Similarly, the confederation has proposed to establish the Industrial Construction Development Authority for policy and operation reforms of infrastructure development with the private sector’s representation.
It has also urged the government to bring Sunset Law and policy to complete projects of national pride, projects of long-term importance, and projects of strategic importance on time.
Organize energy summit in India: FNCCI
FNCCI has suggested the government of organizing a summit in India to attract Indian investment in the hydropower sector and increase power exports to India. FNCCI has also suggested that the power trading license be given to the private sector.
In its budget suggestions, the apex body of the Nepali private sector has asked the government to reduce interest rates, reschedule loans, promote startup companies, and power export. It has suggested reducing the interest rate by lowering the policy rate to 5.5 percent, the bank rate to 7 percent, the CRR to 3.5 percent, and the statutory liquidity facility to 7 percent.
FNCCI has urged the government to provide a cash subsidy to exporting goods with a value addition of more than 50 percent, to India. Similarly, it has sought loan guarantees for export-oriented industries at a maximum interest rate of 5 percent.
FNCCI has demanded that immediate refinancing should be provided to industries related to sectors such as construction, agriculture, industry, tourism, and national priority projects.
The body has suggested setting aside 300 ropanis of land in each municipality of the hilly areas and 50 bighas of land in the municipality of Tarai region for establishing industrial areas and industrial villages.