Budget should help build edge in competitive Nepali products: CNI
Himalayan News Service
Kathmandu, June 2:
The Confederation of Nepalese Industries (CNI), an association of businessmen, which was established three years back, has stressed that the forthcoming budget for the fiscal year 2005-06 should focus on strengthening ‘competitive edge’ of domestic production. The paper distributed by CNI has stated that production for domestic consumption and export to third country is on the decline. Binod Chaudhary, president of CNI said that before the budget presentation, every year, the confederation has been taking a ‘consistent approach’ towards the budget. Chaudhary commented that CNI had worked hard in the past for making the economic management more effective by discussing with concerned experts on micro and macro issues related to the economy. Presenting a paper on behalf of CNI, member Jagdish Agrawal said that our competitive edge vis-a-vis India, in terms of duty gap is shrinking. Agrawal has also presented contradictory views on economy.
Agrawal, on one hand, referring to CNI’s approach paper on budget has said that the confidence level of entrepreneurs is picking up again while, on the other, he talked of rehabilitation of sick industries as these are in need of urgent revival. Agrawal said that the government should bring down the cost of electricity per unit to Rs 4.80 for industrial users. CNI has stated that contract labour should be liberally allowed while minimum wages and minimum working conditions need to be made compulsory. Meanwhile, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has done a survey that says over 50 per cent manufacturing industries in the country are not being operated smoothly which has led to huge revenue losses. Figures from the ministry of finance show that imports in the current fiscal year’s nine months has recorded negative growth by 5.7 per cent, while the same has increased by eight per cent in the last fiscal year.
Prof Bishwambher Pyakuryal, president of Nepal Economic Association (NEA), said that National Planning Commission (NPC) prioritise projects while ministry of finance makes the budget and allocates funds. However, the Office of the Comptroller General (OCG) looks after only financial issues whether there are irregularities, despite OCG being equal to a secretary of any ministry, commented Prof Pyakuryal. Pyakuryal suggested to maintain a minimum rate of growth for effective service delivery and to increase development expenditures. “Military expenses have doubled over the last few years. Investment increment is inevitable as prevailing environment is not sound.” CNI says that revenues are marginally higher compared
to last year. However, the ministry of finance figures show that revenue mobilisation is growing only at a rate of 10.5 per cent for the current fiscal year’s 10 months compared to 12.6 per cent during the same period last year.
Prithvi Raj Ligal, former vice-chairman of the National Planning Commission (NPC) today commented that economy is in a ‘bad’ state. Ligal said that no investment is coming, capital flight is increasing, imports have become negative, and revenues have decreased and land transportation has been badly affected. “I wondered how business confidence was picking up in recent days which has been stated by CNI’s paper,” said Ligal. The government should adopt a export-led growth initiative to revive the economy and need to change the exchange rates which will ultimately give relief to exporters, said Ligal. Finance minister Madhukar SJB Rana was also present on the occasion.