PM Deuba assures FNCCI to cure economic ills

Kathmandu, Dec. 6

Prime Minister Sher Bahadur Deuba has assured the private sector entrepreneurs that he would take initiatives to solve the problems troubling the economy in the recent times.

Speaking at a meeting with a delegation of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) at the Prime Minister's Residence, Baluwatar on Monday morning, he said that a solution to the crisis would be sought after discussions with the Ministry of Finance and the Nepal Rastra Bank (NRB).

According to the FNCCI, the Prime Minister promised with the delegation led by its President, Shekhar Golchha, to take the lead in solving the problem by inviting everyone including the private sector representatives.

The meeting with the PM was an event in the series of efforts that the private sector is making to seek support in scrapping the central bank's directives on 'working capital loan', and bringing down the bank interest rates by maintaining liquidity in the market.

They have been continuously pressing for it and saying that the much-awaited first quarter review of the monetary policy of the current Fiscal Year 2022/23 could not address the existing problems, primarily cancelling the 'working capital loan'.

As per the statement issued by the FNCCI on Tuesday, in all those meetings, Golchha asked to understand the sensitivity of the economy. He drew attention to the fact that the revenue is not able to cover even the ordinary expenses and that the price increase has remained the highest in the past seven years.

Earlier on Sunday, the FNCCI delegation had separately called on top leaders including Chairman of CPN-UML, KP Sharma Oli and Chairman of CPN (Maoist Centre), Pushpa Kamal Dahal (Prachanda) and requested to protect the country's economy saying it was in a vulnerable situation.

Former Prime Minister and UML Chair, Oli conceded that the economy was in crisis and his party was ready to solve it. Likewise, another former Prime Minister and MC Chair, Prachanda also said that he would take initiative to solve the problem, said the FNCCI in a statement on Tuesday.

The private sector body had also met Finance Minister, Janardan Sharma and Minister for Industry, Commerce and Supplies, Dilendra Prasad Badu in an effort to seek support from the government in reviving the ailing economy and fulfil the private sector demands.

 Reiterating its earlier demand to hold the 'Working Capital Guidance 2022' for two years, the FNCCI said that the guidance implemented at a time when private sector investment was shrinking and revenue was also continuously decreasing and the country's economy was under pressure had added complexity to business.

"Fluctuations in interest rates, national and international economic discomfort, internationally skyrocketed fuel and raw material prices, and logistics and freight charges have also increased. Due to this, there is a mismatch between the determination of the estimated financial statement and the determination of the actual required limit of working capital, and due to the lack of working capital, it is difficult to operate industry," read the statement.

It also demanded that the mandatory cash ratio should be reduced by one percentage point. Liquidity management measures should be taken by transferring the amount in government treasury.

"Lack of capital expenditure is an old problem of the country and in the context of lack of liquidity in the market, special initiatives are needed to increase expenditure. It is necessary to immediately implement the plan to increase the expenditure in the context that the Ministry of Finance has identified the reason for the lack of capital expenditure," said the FNCCI. 

Published in The Rising Nepal daily on 7 December 2022.