Govt falters from its commitment to offer subsidies to big exporters

Kathmandu, Oct. 17

Industries exporting ‘Made in Nepal’ goods worth more than Rs. 500 million had applied for the government-announced subsidies on their exports and have been making multiple rounds of the concerned offices but their efforts have not borne any fruits but hopelessness.

The government had announced to pay up to 8 per cent cash subsidy to the industries –such as yarn, cement, clinker, steel, carpet, noodles, footwear, processed water, information technology and business process outsourcing– that export goods above Rs. 500 million in a year about two years ago.

Although the government had announced cash-subsidy programme on exports in a budget five years ago, its implementation was made possible only after a work procedure was formulated two years ago.

Large industries said that they have submitted the application to obtain the subsidy as per the rules but no payment has been made yet. However, they have experienced a lot of administrative and procedural complexities and challenges.

On Tuesday, Federation of Nepal Exporters Association (FNEA) wrote a letter to the Ministry of Finance (MoF) for the early disbursal of the subsidy amount due to the exporters.

"This Federation and our members have time and again requested the MoF for the disbursal of the subsidy to the exporting industries but although it's been two years of the programme implementation, there has been no payment," the letter signed by FNEA President, Pawan Golyan read.

An industrialist said that they have been paying the tax on time, and in case of non-payment there will be fines and penalties. "You should also be able to give what you have to give on time. If it was not to be disbursed, why did the government announce? Is it the taxpayer who should be responsible?" he said.

After the government announced the subsidy for export promotion, the private sector had welcomed it. But now the concerned industrialists are disappointed because of the lack of implementation. Meanwhile, liabilities on government, such as payment to the contractors, COVID insurance and agriculture insurance, have piled up.

According to the exporters, the subsidy on exports is likely to cross Rs. 2 billion mark. Department of Customs, Department of Industry, Nepal Rastra Bank, Ministry of Industry, Commerce and Supplies and MoF are the major concerned agencies to implement the subsidy programme.

According to the work procedure of the subsidy programme, the subsidy received for exporting must be tied to the income shown in the balance sheet of the same year and it must be spent in international market promotion, technology and capacity building and e-commerce.

The FNEA said that the subsidy would support the industries in the transfer of the latest technology, market promotion in foreign countries and production of quality goods.

A high official of the MoICS said that the Ministry was 'highly concerned' about the demands of the industrialists and exporters but it has been struggling to manage the funds. "The MoICS and MoF are in close communication to find ways to make the payment to the exporters through the disbursement of additional budget," said the official. 

 Published in The Rising Nepal daily on 18 October 2024.