FNCCI seeks special economic package

Kathmandu, April 11

The Federation of Nepalese Chambers of Commerce and Industry today submitted a memorandum to Finance Minister Yubaraj Khatiwada recommending measures that the government should adopt to revive businesses and the economy hit by the coronavirus pandemic.

Submitting the memorandum to Khatiwada, the FNCCI delegation led by its President Bhawani Rana urged the government to plan, prepare and launch a special package to rescue the economy from the devastation of the contagion.

With businesses of every type shut for weeks and the economy coming to a standstill, the FNCCI delegation urged the government to bring a stimulus package by incorporating suggestions of the private sector.

FNCCI has requested the government to manage refinancing loan facility for all businesses hit by the coronavirus at two per cent interest with two years of maturity period. According to FNCCI, such loans acquired through the refinancing facility of the government shall be used to pay salaries of workers for one year.

FNCCI has also sought refinancing loan facility at two per cent to pay interest of businesses in the tourism, manufacturing, agriculture and export sectors. The maturity period of such loans should be two years. Similar loan facility should be offered to small and medium scale enterprises with one year of repayment time, added FNCCI.

Nepal Rastra Bank had recently halted loan recovery from businesses till mid-July and asked banks and financial institutions to provide 10 per cent discount on interest rate in case any borrower makes monthly/quarterly payment by mid-April.

FNCCI added that the interest rate discount should not be limited only on term loan and should be extended for all forms of loans, including working capital loan and trust receipt loans.

As tourism is the sector worst hit by the coronavirus pandemic and no tourist is likely to visit Nepal this year, FNCCI has urged the government to bring out a separate special package targeting the tourism industry. It demanded that hotels across the country should get electricity and cooking gas at subsidised rates. As per FNCCI, hoteliers and other tourism businesses should be given 50 per cent waiver on unified property tax being collected by the local governments.

FNCCI has also recommended the government to make the capital-cum-deposit ratio flexible and reduce the difference in interest rate between deposits and loans by 0.5 percentage point. It has also urged the government to use necessary banking tools and reduce interest on every type of loan by three percentage points.

The federation has also suggested that the government should ensure subsidised electricity for all businesses and industries for six months. FNCCI has asked the government to allow businesses and firms to operate below capacity or fully close their businesses, if necessary, by paying certain monetary support to workers.

Meanwhile, Khatiwada assured FNCCI that the government would facilitate the private sector and coordinate with it to revive businesses and the economy.

A version of this article appears in e-paper on April 11, 2020 of The Himalayan Times.