KATHMANDU, MAY 21 –
Commending the effort to introduce an early budget since there has been a history of delays, chiefs of the private sector said that the government should implement the priority sector projects properly. The government is expected to unveil a Rs 600-billion annual financial plan due to greater demand for funds from different quarters alth-ough the National Planning Commission has fixed the bu-dget ceiling at Rs 596 billion.
“The best thing happening this time is that the budget is being tabled on time,” said Pashupati Murarka, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). “The government should focus on implementation of the plans and policies on time and carry out the development expenditure as mentioned in the budget.” Murarka stressed the need to emphasize the energy sector as power shortages have prevented industry from operating at full capacity besides crippling normal life. He demanded increased funding and tax cuts for the sector.
Due to lack of preparation, the government’s budget allocations in the energy sector could not be utilized adequately this year. Funds were set aside even before the issue of land acquisition had been resolved, and a lot of money allocated for transmission lines has been lying idle. The government has allocated Rs 30 billion for the energy sector this year.
“Energy is one sector which can solely drive the economic development of the country.” A recent World Bank study has found that Nepal suffered a funding gap of $ 5.3-7 billion in the energy sector from 2011-20.
The Nepali Congress, which heads the present government, had pledged in its election manifesto to eliminate load-shedding within three years and produce 5,000 MW within five years.
Similarly, the CPN-UML, which is a major partner in the coalition government, had said that it would complete a number of ongoing hydropower projects like the Upper Karnali, West Seti, Budhi Gandaki, Upper Marshyangdi, Lower Arun, Tamakoshi III, Arun III and Upper Tamor within 10 years through proper coordination with the private sector.
Murarka said that agriculture was another sector that needed to be accorded priority in the upcoming budget. “We can reduce the huge trade deficit by focusing on the agriculture sector,” said Murarka. “We have fertile land as well as manpower. However, we have not been able to capitalize on the potential.”
The FNCCI is currently collecting suggestions from district chambers and representatives for the upcoming budget. “We have already received feedback from around 17-18 districts. We will submit a set of recommendations in writing to the government in the next two weeks,” said Murarka.
Likewise, Hari Bhakta Sharma, senior vice-president of the Confederation of Nepalese Industries (CNI), said that the government should offer stimulus packages to the manufacturing sector for achieving sustainable economic growth.
“It is not just about providing money,” said Sharma. “During the last budget presentation too, we had suggested that the government offer some benefits like a 5-10 percent waiver on corporate tax for manufacturing industries and quantified benefits for industries generating employment,” said Sharma. Currently, manufacturing industries have to pay a corporate income tax of 25 percent.
According to him, the budget should put on more focus on development of energy sector and infrastructure. “These are the bases for the development of industries,” said he adding that country can only narrow down the trade deficit by increasing its focus on industrial development and development of export oriented products.
Suresh Kumar Basnet, president of Nepal Chamber of Commerce (NCC) said that new budget should ensure that the industrial zones would get on permanent basis. “For this, there needs to be some arrangement to import more electricity from India,” said he. Due to energy demands exceeding output, Nepal has to import power from India. The Morang-Sunsari Industrial Corridor is almost fully dependent on imported energy which has put it in a vulnerable position.
Basnet also asked for the introduction of new laws necessary to stimulate an economic revival in the country.
Source : The Kathmandu Post