KATHMANDU, JUNE 5
The Federation of Nepalese Chambers of Commerce and Industries (FNCCI) has expressed concerns regarding the budget for the fiscal year 2023-24, stating that it lacks immediate measures to effectively address the ongoing economic slowdown.
While acknowledging that the budget aims to empower the private sector and incorporates suggestions from various stakeholders, including the private sector, the FNCCI has highlighted the need for more immediate actions to mitigate the impact of the economic slowdown.
The FNCCI has commended the government's steps to incorporate environmental impact assessment in land acquisition, timber utilisation, and waste management in the upcoming budget, which it believes will improve the business environment by mitigating adverse environmental impact and enabling sustainable resource extraction, and ultimately minimising business losses.
The FNCCI has also appreciated the budget's provisions to promote domestic products despite it being 20 per cent costlier, infrastructure development, support for domestic production, sectoral growth, cultivation on barren land, start-up funding, cash grants, and simplified company registration procedures.
These measures are expected to facilitate import substitution and new entrepreneurs, and provide necessary promotion and financial support.
Furthermore, the FNCCI has noted that the budget's provision to liberalise the electricity sector by allowing private participation and facilitating the construction of cross-border transmission stations with India would support foreign currency generation.
However, the FNCCI has also highlighted several areas where the budget falls short. It has mentioned the lack of provisions for essential infrastructure development, price adjustments, and prompt payments to address liquidity needs, support entrepreneurship, and stimulate market growth. The absence of an evaluation of the budget's potential impact on consumers and businesses, as well as oversight of tax rates and their applicability have also been criticised.
The FNCCI has said that these shortcomings could hinder the budget's ability to effectively tackle the ongoing market slowdown and potentially worsen the negative consequences.
The FNCCI has specifically flagged the substantial rise in customs duty on raw materials such as vegetable ghee and oil in the industrial sector, which has led to increased consumer prices and hindered production. It has called for bridging the gap between raw materials and finished product manufacturing to foster significant growth in domestic industries.
In light of the ongoing economic slowdown experienced since over the past two-and-ahalf years, the FNCCI has questioned whether the government's target of six per cent economic growth and taming inflation at 6.5 per cent were achievable, emphasising the need for a careful examination of the government's efforts to increase revenue without imposing excessive burden on businesses and consumers.
A version of this article appears in the print on June 6, 2023, of The Himalayan Times.
