Misunderstanding Profit Has Fuelled Attacks on Private Sector: FNCCI President

Chandra Prasad Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), has urged the government to ensure the safety of entrepreneurs, restore investment confidence, and strengthen governance as the country navigates economic uncertainty in the wake of recent protests.

Speaking at the ‘National Economic Dialogue 2.0’ in Kathmandu on Saturday, November 8, Dhakal said Nepal now stands “at a crossroads of hope and uncertainty.” He noted that while the government has moved to promote good governance and curb corruption, the private sector — severely affected by the unrest — continues to struggle.

“The business community suffered greater losses this time than in past movements, with vandalism and looting even reaching private homes and enterprises,” he said.

Massive Damage, Fading Confidence

According to FNCCI’s preliminary survey, the recent protests caused about Rs 48 billion in physical damage and Rs 88 billion in total losses to the private sector. The National Planning Commission, with FNCCI’s cooperation, is now collecting detailed data on the extent of destruction.

“Entrepreneurs invest through savings and loans, contribute to revenue, and create jobs. Yet their properties have been attacked and their livelihoods threatened,” Dhakal said. “If the perpetrators of arson and vandalism are not held accountable, impunity will spread.”

He urged the government to ensure that professionals and entrepreneurs can work safely and confidently.

Profit Not a Crime

Dhakal criticised the long-standing perception that profit-making is wrong. “Here, earning profit has long been portrayed as a crime,” he said. “However, the purpose of business is to provide services and earn profit. It is this misunderstanding that has often led to attacks on the private sector.”

Citing a joint FNCCI–IFC study, Dhakal highlighted that the private sector contributes 81 percent to Nepal’s economy, provides 86 percent of employment, and generates over 80 percent of income tax revenue.

Policy, Governance, and Economic Revival

Dhakal appreciated the government’s post-crisis support measures but urged proper implementation. He also welcomed the Home Ministry’s decision to include FNCCI representatives in district security committees — a move he described as “a positive step towards coordination.”

He thanked Prime Minister Sushila Karki and key ministers for addressing the long-standing dispute over dedicated feeders and trunk lines, expressing hope for an early resolution.

The FNCCI chief also called on the Council of Ministers to pass a proposal of public significance that recognises the private sector’s vital contributions to employment, revenue generation, infrastructure development, and social accountability, and ensures that this recognition is clearly communicated to the general public.

Dhakal called for a ‘Private Sector Protection and Promotion Plan’ to guarantee business security, streamline government services, and coordinate agencies. He also revealed that FNCCI is preparing an ‘Economic Recovery Plan’ focusing on demand stimulation and post-crisis rebuilding.

“The private sector should be part of any new governance mechanism,” he said, urging simplification of business registration, digital access via the Nagarik App, and the removal of the renewal requirement for firms paying taxes regularly.

(From left: Chief Secretary Ek Narayan Aryal, Minister for Industry, Commerce and Supplies Anil Kumar Sinha, Home Minister Om Prakash Aryal, Prime Minister Sushila Karki, Finance Minister Rameshore Khanal, Nepal Rastra Bank Governor Biswonath Poudel, and FNCCI Senior Vice President Anjan Shrestha listen to FNCCI President Chandra Prasad Dhakal’s address during the National Economic Dialogue 2.0, organised by FNCCI in Kathmandu on Saturday, November 8, 2025. RSS)

Support for Youth and Startups

Dhakal emphasised the need to foster youth entrepreneurship through effective implementation of the Startup Policy and the launch of a Youth Entrepreneurship Development Programme in collaboration with FNCCI’s Young Entrepreneurs Forum.

“Facilitation in areas such as business registration, capital mobilisation, market promotion, and exits has become a pressing need,” he said. “Result-oriented programmes must integrate project loans, group financing, market development, information technology, and data centres. A steering committee can begin work immediately.”

Investment, Infrastructure, and Capital Mobilisation

Dhakal called for policy stability to attract regional investment, especially from India and other countries affected by recent US tariff shifts. He urged the government to ensure that approved infrastructure projects face no obstruction from local or provincial groups and that full security guarantees are provided at investment sites.

Highlighting domestic capital mobilisation, he noted that Nepal Development Public Limited (NDP) has been established jointly by FNCCI, (Confederation of Nepalese industries) CNI, the Nepal Chamber of Commerce, and Non-Resident Nepalis to invest in large infrastructure ventures.

Fiscal and Trade Reforms

Dhakal raised concerns about the suspension of export subsidies, noting that Nepal’s impending graduation from the least developed countries (LDC) category should not come at the cost of exporters.

“There is an argument that the export subsidy has been halted because of Nepal’s graduation from the LDC category,” he said. “The Federation has consistently maintained that this graduation is only a nominal improvement, not a reflection of real economic strength.”

Nepal, alongside Bangladesh and the Lao People’s Democratic Republic, is scheduled to graduate from the UN’s LDC category in late 2026.

He pointed out that Bangladesh formally requested the United Nations on September 25 to reassess its graduation status. “I have heard that Nepal, too, is making similar efforts,” Dhakal added. “The graduation period should be extended by at least three years, and export subsidies should be reinstated.”

Dhakal also recommended lowering income tax and VAT rates to boost consumption and domestic demand. He proposed aligning Nepal’s tax rates automatically with India’s to curb illegal imports and encourage fair competition.

On monetary policy, he urged reforms in working capital guidelines, loan classification, and blacklisting provisions.

Slowing Growth Outlook

Nepal’s recent unrest, triggered by a social media ban and deep public frustration over corruption, has caused severe economic disruption. The World Bank’s latest South Asia Development Update forecasts Nepal’s growth to slow to 2.1 percent this fiscal year, with a possible range of negative 1.5 to 2.6 percent, compared to 5.2 percent projected in April 2025.

Concluding his address, Dhakal reaffirmed the private sector’s commitment to responsible business practices and national development, urging closer partnership between the government and private sector to revive growth.