Kathmandu, May 30:

The Confederation of Nepalese Industries (CNI) has asked the government to make sure that the forthcoming budget would create an environment for retaining businesses in Nepal, setting a new trend for the future.

A environment is needed for retaining business, which the upcoming budget for fiscal year 2007-08 can provide. Despite many challenges and fiscal constraints, the budget has to be path breaking, which can set the trend for the future, reads the CNI’s recommendations for the budget.

Presenting the recommendations, Binod Kumar Chaudhary, president of CNI stressed the need for a ‘critical departure’ in the Nepali economy, overhauling conservative and backward looking attitudes.

“The time has come to think seriously about implementing the commitments made,” Chaudhary said.

Due to uncertainties and ongoing upheavals at the political sphere, Chaudhary cautioned that the Nepali economy is once again may head downhill. The recent political chaos and deteriorating law and order situation is most likely to derail the overall system, he warned.

Presenting CNI’s perspectives on the occasion, Jagadish Agrawal, head of revenue committee at CNI, said that the budget should be investment-oriented with a firm commitment from the government to increase public spending in infrastructure development. While building the private sector’s confidence through a partnership approach, the budget must look to mobilising domestic savings through bonds, he added.

Enhancing Nepal’s competitiveness is another crucial factor, which needs a dynamic approach from both the public and the private sector, Agrawal said, adding that the economic agenda has to prevail. In order to achieve a broad-based growth rate, improvement in delivery mechanism is essential and promotion of good governance, control of corruption and discretionary powers are a must.

CNI has also asked the government to set up an autonomous body like Board of Investment and Board of Revenue with credibility and competence to promote and institutionalise both domestic and foreign investments in the country. Citing the complex political situation, CNI has suggested that the budget should be more pragmatic than populist.

Probably for the first time, it has asked the government for a long-term commitment to transparency in tax structure rather than reduction or waiver of duties on specific items or services.

“The overall effect should be that henceforth doing business in Nepal is more profitable than doing it elsewhere,” Agrawal said.

Pointing to Indian rupee gaining over US dollar and its implication for the Nepali economy, CNI has urged the government to review the current peg rate with the Indian currency.

Responding to queries and recommendations, finance minister Dr Ram Sharan Mahat said that the forthcoming budget would focus on increasing public investment on infrastructure development. He also asked the private sector to think and act accordingly to move forward and take the country forward.

While doing so, Dr Mahat suggested introspection for the private sector and pointed out the need for enhancing entrepreneurial skills as well as innovativeness.

He also assured that the government would try its best to create a congenial atmosphere for doing business in Nepal through right policy measures.