FNCCI hails budget, says economic stimulus is missed

Kathmandu, May 31

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) on Sunday welcomed the budget stating that it included most of the recommendations it had submitted to the government.

It said that the refinancing facility at the rate of 5 per cent interest is a welcome move, but it should be ensured that all scales of business and industry get the facility and it should be further clearified through the monetary policy of coming fiscal year 2020/21.

Concessional loan at 5 per cent interest rate to the cottage, small and medium scale enterprises, including agriculture, manufacturing, and hotel and tourism sectors is also a good provision, it said.

 “In addition to it, the government should provide loan to the innovative businesses at 2 per cent rate,” it said.

The FNCCI also appreciated the provisions like income tax discount to micro cottage and small enterprises on the basis of transaction, discount on customs duties in the import of raw materials, promotion of the industries that use domestic raw materials and producing clothes and shoes in the country.

It said that programmes on agriculture were also good.

“This is a balanced budget. But the growth target of 7 per cent is difficult to achieve,” it said and suggested that the spending capacity should be enhanced to utilise the budget and meet the growth aspirations.

However, the private sector body said that while the economy needed an integrated stimulus package that could motivate the private sector, the government announced relief programmes scattered over multiple topics, and it would not address the need of the time.

It said although the budget aimed at reviving the disturbed supply chain, rehabilitating agriculture, industry, trade, tourism and construction sector businesses and achieve early economic revival, the budget could not inspire and motivate the private sector.

“Many countries have announced economic stimulus package to save the business and economy but there are not such programmes that could immediately install confidence in the private sector entrepreneurs,” said the business body in its statement.

According to the FNCCI, priority to the health sector and programmes to develop health infrastructure are good steps but the implementation of the programme is challenging given the capacity of the Health Ministry and subnational governmetns.

Likewise, it noted the absence of programmes on export promotion and energy.

Published in The Rising Nepal daily on 1 June 2020.