KATHMANDU, MAY 21 -
Trade and industry leaders have urged the government to focus on
developing energy, agriculture and infrastructure as it gets ready to
present the budget for fiscal 2014-15 next month.
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.
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