Private sector welcomes new budget

Kathmandu, May 31

Private sector has welcomed the budget of the upcoming Fiscal Year 2022/23 terming it 'positive' for the programmes it has incorporated for the development of agriculture, promotion of private sector and domestic industry, and youth employment.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said that reducing imports of agricultural goods by 30 per cent and supporting agri-business will help in commercialization of the sector.

It said it would forge cooperation with the government in export promotion and import substitution and demanded for the early implementation of the provision to provide seed capital to the startup business which was announced by the budget of the current fiscal year 2021/22.

The FNCCI also stated that it would mobilise its provincial chapters and entire network to make the operation of business incubation in all provinces a success. The budget has announced to provide concessional loan to the youth and returnee migrants through a challenge fund and expand the knowledge-based business through the operation of business incubation centre.

"The provision to establish herbs processing industry at provincial level has elated the entrepreneurs in the sector," read a statement issued by the FNCCI.

Likewise, it sought assurance for the full operation of the Special Economic Zones in Bhairahawa and Simara and completion of the Integrated Check Post in Nepalgunj at Nepal-India border and initiate ICP construction in Bhairahawa.

The issue of launching a decade of development and prosperity 2022-2032 is an important step, it said while expressing hope that the 8 per cent cash grant on the export of clinker, cement, steel, footwear, processed water, and IT-based services as well as business process outsourcing will further help to promote the domestic industry. Meanwhile, the FNCCI demanded that the provision to differentiate the customs duty of the raw materials and finished goods should be implemented immediately.

It urged the government to streamline the cash grant with a simplified process.

Similarly, the business body welcomed the step to upgrade the existing labs to the international level. It also recommended the government to remove the limit of 100 units of apartments selling 20 per cent units to the foreign citizens. FNCCI praised the government announcement to review the limit on land for the industries. It demanded to provide discount on electricity to the small and medium enterprises as well.

However, it said that achieving 8 per cent growth rate is challenging since the country is facing liquidity crisis and external sector pressure at the same time. Likewise, the revenue target is also unreal, said the FNCCI.

Meanwhile, the Federation of Export Entrepreneurs Nepal (FEEN) said that the budget has included their suggestions like establishing international exhibition centre, organising international fairs for export promotion, providing cash incentives on the exports of cement, processed water, steel, footwear and clinker, and upgrading Nepal's labs.

Likewise, providing concessions to the production and processing of cardamom, ginger, herbs and turmeric, establishing herb processing centre, providing government land for 50 years to industry to attract the Foreign Direct Investment, and making the economic diplomacy more effective have also been included in the budget.

The FEEN has welcomed these provisions saying that 'they will help in export promotion'. However, it doubted the early and earnest implementation of these provisions.

The other day, Nepal Chamber of Commerce (NCC) had welcomed the budget for its programmes on agriculture, export promotion and support to the domestic industry.

It said that the target of Rs. 256 billion internal borrowing will further pressurize the liquidity crisis and interest rate.

"The revision in the slabs of income tax is a welcome step. But the married persons should also be differentiated with a person with more family members," said the NCC in a statement.

According to the business body, provision to allow insurance companies to invest certain per cent of their profits in infrastructure, and paying coronavirys insurance liability by issuing special bond are good initiatives.

It welcomed the salary increment for the government employees, pension to farmers, apartment to urban poor and nutrition allowance to new mothers. 

Published in The Rising Nepal daily on 1 June 2022.