Kathmandu, May 23

With just a week left for the government to introduce the budget for next fiscal year, the private sector of the country has urged the government to place infrastructure development under higher priority in the upcoming fiscal budget.

Informing that infrastructure deficit in Nepal is the major setback to economic growth of the country, different private sector representative bodies have urged the government to bring infrastructure sector friendly budget for fiscal year 2017-18.

As per the constitutional provision, the Ministry of Finance (MoF) is preparing to bring the budget for fiscal 2017-18 on May 29. However, MoF has already said that it would bring a full-fledged budget without incorporating new programmes as incorporating new programmes in the budget would breach the election code of conduct. The second round of the local level elections are slated for June 14.

“The infrastructure of Nepal is one of the poorest in Asia and has become a huge setback to overall development of the country. As infrastructure development is the base for development of other sectors, the new budget should prioritise infrastructural development,” Bhawani Rana, president of the Federation of Nepalese Chambers of Commerce and Industry, said.

Though the government is not introducing new programmes in the budget this year, Rana opined that the government should allocate sufficient funds in the new budget for different ongoing infrastructure projects that are facing budget deficit.

Similarly, Rana also said that the government should ensure effective implementation of one-window system, reduce taxes on raw materials and promote manufacturing industry through the new budget. “The contribution of the manufacturing sector in the gross domestic product (GDP) has been falling in recent years as many investors are shifting towards trading sector due to the business hassles in production sector,” she said.

Hari Bhakta Sharma, president of the Confederation of Nepalese Industries, said that the annual budget in Nepal had been allocating low funds for infrastructure development in the past years, which has resulted in high infrastructure deficit in the country.

“As per the practice in developed nations, the government should allocate at least 10 per cent of the GDP for infrastructural development every year and this trend has to be continued for several years,” he said. Similarly, Sharma also said that government should increase its execution capacity as many projects related to roads and bridges have been pending for long.

Sharma also urged the government to introduce a provision in the budget to provide necessary land to industrialists to set up new industries. “The high cost of acquiring land has increased production cost of industries and many investors are discouraged to make investments,” he added.