First Business News Portal in English from Nepal
KATHMANDU: Finance Secretary Madhu Kumar Marasini expressed dissatisfaction over private sector’s warning at times to shut down the industries and businesses, and hand over the keys to the government.
“When there is a small challenge, private sector entrepreneurs announce to shut down their industrial establishments and businesses, this will not help. Government is not there to manage their business,” he said while speaking at a programme organised by Management Association of Nepal (MAN) to offer suggestions for the budget of the next fiscal year 2022/23.
According to Marasini, private sector orgnaisations should not engage in creating a cartel but hold dialogue with the government to formulate business-friendly policies.
“Private sector should take risk, government should only provide policy support. The private businesses must not try to get the government trying to support in every step and ask for incentives,” he said.
Marasini maintained that the external sector pressure is created by the supply chain constraints created by the COVID-19 pandemic, Russia-Ukraine war and increased production and transportation cost.
However, he said that foreign currency reserve is above pre-COVID time, there is no extreme volatility so we need not panic.
According to him, the government is going to introduce more austerity measures to further control imports.
“Meanwhile, number of Nepali workers going for foreign employment has been increasing in the recent months which will provide a foreign currency cushion in the coming months with increased remittance,” he said. “However, we need to be watchful for the next 4-5 months, but there is not a crisis.”
Marasini informed that the international development partners and multilateral donors have shown a great support to Nepal, and even the International Monetary Fund (IMF) has provided credit facility to it with less harsher conditions.
Stating that the private sector would be taken side by side in policy making, planning and business-environment creation, Marasini pledged continued government support for the revival of the sectors severely hit by the pandemic and still struggling to get back to normalcy.
He said that Nepal had higher share of capital allocation in total budget compared to India, Nepal has 23 per cent and India 19 per cent.
“We have the trend of scattering budget to the projects without proper preparedness which should be corrected,” he said.
Economist Dr. Bishwas Gauchan said that the country should restructure the entire budget.
According to him, the size of the budget should be around Rs. 1600 billion, about 30 per cent of the country’s Gross Domestic Product, and revenue should be 25 per cent of the GDP by next year.
Stressing on the practice of evidence-based planning in every sector, Dr. Gauchan suggested prioritising hydroelectricity, road and irrigation in terms of budget allocation.
Likewise, Shekhar Golchha, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said that the Nepali economy is a plane running with a single engine i.e. remittance. When there is a problem in remittance, the economy catches ailment.
He said that the private sector can suggest the sectors that could grow and contribute to the economy if incentives were provided.
According to him, Nepal has long been failed to attract Foreign Direct Investment (FDI) and need to review entire policy and process in order to facilitate the inflow of FDI.
Senior Vice President of Nepal Chamber of Commerce, Kamlesh Kumar Agrawal demanded for the reduction in customs duties and a raise in the ceiling of income taxes.
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