Himalayan News Service

Kathmandu, May 29

President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has argued that the national economy has been severely affected due to political instability, worsening security situation and lack of coordination between the government bodies and private entities as well as poor governance and commitment to development.

Shrestha made this remark during a meeting with seven–member delegates of International Monetary Fund (IMF), Asia Pacific office on Tuesday. The delegation was led by Hisanobu Shishido, deputy chief of IMF regional office, stated in a press release issued by FNCCI here today.

The economic growth and GDP are likely to be in the negative, whereas revenue collection, export-import, forex reserve and tourist arrival have all dropped drastically during the first nine months of the current fiscal year, he said.

Stating that the FNCCI has already submitted recommendations to the government for the economic improvements of the country, Shrestha stated, “The government should not increase revenue rates in order to meet the regular expenditures.” He also informed that a new industrial policy drafted by the FNCCI would be submitted soon.

Rajendra Kumar Khetan, second vice-chairman of FNCCI argued on the complication that arose from the Income Tax Act-2002 imposed by the government. He said that custom duty imposed in accordance with provisions of the World Trade Organisation (WTO) and South Asian Free Trade Agreement (SAFTA) might create problems in a country like Nepal. He said recently renewed Indo-Nepal Trade Treaty and full implementation of contract of railway would increase export from Nepal.

The state-owned public enterprises in stock exchange, insurance business, commercial and development banks, which have been running in a conventional way and economically unprofitable, are needed to be privatised, Khetan continued.

He stressed on the need to minimise the complexity in banking, special protection for sick industries, upgrading the accounting system to international standards as well as timely introducing relevant Industrial Act .

Shishido showed interest on VAT, new Income Tax Act, banking policy, export-import, stock exchange, Company Act and accounting system. She urged the need to rescue sick industries through simple, practical and effective rules and policies.

FNCCI general secretary Badri Prasad Ojha shed light on the recently renewed Indo-Nepal Trade Treaty and asked for convenient custom duties for swift access to WTO. Lawerence De Milner, residential representative of IMF, Wafa Fahmi Abdelati, senior economist at IMF, Dr Hemant Duwadi, executive director of FNCCI and Dr Dev Bhakta Shrestha were also present on the occasion.