Better investment climate urged

Kathmandu, June 23:

Entrepreneurs today suggested government that the next budget should address plight of export sector and create condusive investment climate changing tax rates and exploiting the potential areas where Nepal has comparative advantages.

“Its high time we need to think on how to rejuvenate export,” said Binod Chaudhary, president of Confederation of Nepalese Industry (CNI), during pre-budget interaction with finance minister Dr Ram Sharan Mahat.

“How to attract more investment to fight double digit inflation, rising crude prices, acute food shortage, rising commodity and transportation cost,” he said adding that lack of employment opportunities and dwindling public sector investment are some of the problems that government must address.

Jagdish Agrawal, vice-president of CNI, presenting a paper admired political pa-rties for starting to take economic issues seriously.

Though, agriculture — a comparative advantage sector — contributes approximately 40 per cent to total GDP, its growth is not satisfactory. “To revive it, commercialisation of farming is a must,” Agrawal added.

“CNI wants a transparent roadmap of investment to achieve double digit growth in the next five years,” CNI suggests, adding that Rs 450 to Rs 500 billion per year will be necessary to achieve the growth target. The massive investment required for achieving it can be shared between private and public sector but the government should take lead in terms of massive allocation to infrastructure development, energy management, transportation and irrigation. “The funds with Army, Citizen Trust, Provident Fund could be used for development,” CNI suggested.

The dependency on imported fuel should be reduced and alternative to fossile fuel should be given priority, said CNI.

Finance Minister Dr Ram Sharan Mahat agreed on development of alternative sources of energy. “The government has been supporting bio-gas and solar energy,” he said.

“Nepali coffee has more demand in the third country,” Mahat added.

“Cement industry has great potential as big hydro power projects are coming in the future,” he added. CNI has categorised five industry: Cement, textile, petroleum refining, carbon steel and electricity generation.

“Political orientation, social and economic discipline, and labour relation effect investment environment,” the finance minister said, adding that due to transition period there is a lack of social discipline at present.

However, dismal scenario could not hurt public investment and spending on rural infrastructure is also increasing. “Import is increasing that shows market is also expanding,” he said. Except for manufacturing, all other sectors are growing and government can go to extra mile to push export, Mahat added.

He also blamed labour dispute for distracting new investment. “It would be solved amicably,” he added.