June 4: The Confederation of Nepalese Industries (CNI) has expressed doubts about encouraging investment and increase in market demand in the upcoming fiscal year despite government’s efforts to improve the economy through the budget.
CNI claimed that the government overlooked most of the suggestions made by CNI while preparing the budget.
A statement issued by CNI states, “Capital expenditure has been reduced when investment should have been increased to take the economy out of recession towards prosperity. Many suggestions given by CNI to increase the private sector’s investment have not been addressed. It is doubtful that the budget will provide any relief to the economy that is heading towards recession.”
CNI commented that the budget did not address the suggestion that the customs rates of finished goods and raw materials should be at least two levels different and the government's own policy of at least one level difference to encourage domestic production. However, CNI stated that the budget addressed some of the issues while accepting the private sector as a driver of economic development.
As per the statement, “In the projects to commence from the next fiscal year, promoting domestically produced cement, iron rods, zinc sheets, iron pipes, plastic pipes and electric wires, revising the land demarcation law, building and operating industrial areas in public private partnership, revising the minimum limit of foreign investment, preparation of base for extracting ballast, allocation of budget only to projects with site clearance, encouraging investment in start-up business are commendable."
“Likewise, the announcement of encouraging the private sector to develop and operate in public-private partnership after completing environmental impact assessment, tree felling, and other preparatory work in Chitwan's Shaktikhor and Makwanpur's Mayurdhap industrial areas are also positive,” CNI stated. However, it requested the government to bring clear facilities to attract the industries to the industrial areas, saying that the budget is silent about the facilities that the industries operating in such industrial areas are going to get.
The CNI said that the issue of revising the laws related to leases and restrictions for easy land availability for manufacturing and export industries, and adopting flexible labor policies for industries based on information technology and innovation is a welcome move. The statement added, “In the budget, it is mentioned that the use of indigenous products in the government agencies will contribute significantly to the promotion of domestic production. It is expected to add strength to the ‘Make in Nepal Swadeshi Campaign,’ which was started as a joint initiative of the government and CNI.”