Focus on core strength
We should focus on our core strengths: Agriculture, tourism, hydro power, services sector and infrastructure.
• Revenue administration should focus on
trade facilitation through simplification and standardisation of documentary requirements at customs points.
• Introduce Online Custom Declaration System.
• Form a full-powered ‘Revenue Authority’.
• Facilitate exporting firm as much as the export industries.
• Establish and operate Export Trading Houses.
• Export Trading Houses should be accorded the status of deemed export.
• Allow Export Credit at more concessional rates, abolish special fee in income tax and revamp customs tariff rates.
• Abolish VAT in industrial machinery and equipments.
• Protect and search markets for Nepali garment industries. Economic co-operation with neighbouring countries, with Nepal as the transit point in India-China trade.
• Speedy implementation of already signed agreements like WTO, SAFTA, BIMSTEC, and Bangkok Agreement where Nepal is an observer.
• Programmes for reviving sick industries and restoration of peace and stability.
• Government should make a budget that can be sustained by internal resources. The budget
must focus on poverty alleviation and give space to excluded, marginalised and indigenous people and also rehabilitate the conflict-hit.
• Widen the tax base and refrain from hiking rates. Policies and building infrastructure like Garment Processing Zone are must.
• Export Promotion Agency should work in a way that for every dollar spent, the country can
export $300 worth of products.
• Implement labour law reform in line with the speed of liberalisation and in conformity with WTO. Making enabling laws for operating Special Economic Zones also required. Regular railway service between Kolkata and Birgunj ICD can save huge logistic costs.
• Since export industries have also been categorised as other industries and put under the tax net it has weakened competitive strength, the prevailing tax regime needs review.
• As regards borrowers from banks, there should be a clear division between wilful and unwitting defaulters.
• Effective governance and economic reform depends on government’s policy focus, and it must work hard to recapture that. The actual outcomes of the last budget fell far short of intended. There is little likelihood that this year’s budget too will be implemented in full.
The new budget should also focus on the impact of India’s budget on Nepal’s economy.
• Unauthorised trade among neighbouring countries should be controlled by these countries jointly.
• Non-tariff barriers seen while exporting to India in the form of Quarantine, SPS measures and lab testing should be harmonised.
• Government should start debate among stakeholders in the country on implications of the Comprehensive Economic Partnership Agreement.