Government should encourage exports
The changed political scenario in the country has encouraged industrialists and businessmen. We believe that there will be a rule of law in the country now. We also expect a practical policy to be adopted related to management, revenue generation and labour issues in the industrial sector.
Though we suggested and handed over many memorandums and expressed our views to the then governments during the past ten years, all attempts went in vain due to lack of peace and rule of law in the country.
However, positive hopes have been rekindled now. If this new-found hope and enthusiasm of people can only be turned for income generation, there would be no doubt that our future would be bright.
But mere speeches from leaders can not achieve goals. Rather, development-oriented economic policies need to be introduced in the country.
The government is preparing to unveil a budget for the new fiscal year 2006-07. However, it can only be a short-term remedy for solving the economic problems at a time when economic policies have not yet been fixed.
We have to hope that the new budget would respect peoples’ aspirations and represent the economic vision of all political parties.
The budget, at best, would function as an interim economic policy, industrial policy and commercial policy.
Present economic condition:
1. In the present fiscal year, price rate increased by 8 per cent. The price of things of daily use has increased, making it hard for people having on limited income.
2. Though collection through Value Added Tax increased by 30 per cent in 2061-62, the revenue rate remained negative.
3. Though there was a 14 per cent increase in exports and only five per cent increase in imports, trade deficit remains high.
4. The governmental expense has spiraled out of control, rising by 15 per cent.
5. Very little loan has been taken by the private sector.
6. Adverse political situation has cut down aid from foreign countries.
7. Production of industry affected due to irregular supply of electricity.
8. Agricultural production affected due to adverse climate.
9. Increase in the collection of foreign currency.
10. Government collection of internal loan by the government twice this year compared to last year.
11. Industrial production has been contributing to national production by eight per cent while revenue has been contributing 11 per cent.
12. Losses at Nepal Oil Corporation insufferable.
Despite such adverse statistics, there is some hope. If the government adopts discipline in expense, adopts financial transparency and utilises foreign aid in a proper way, the adverse situation could be brought under control. The government needs to adopt following polices:
1. Government expense needs to be transparent.
2. The area of revenue collection should be extended.
3. Unnecessary expense in the name of peace and security should be decreased.
4. Emphasis should be given to utilisation of internal resources.
5. Exports should be encouraged and exporters should be exempted from income tax burden.
6. Priority for projects related to rural development.
7. Emphasis on employment-oriented subsidy.
8. Improve remittance management.
9. Priority for road construction in hilly regions.
10. Priority for electricity generation.
11. Improve management of government corporations and generate income.
12. Encouragement to private and foreign investment.
If the budget is drafted considering all the above points, the budget can cull the desired output.
The private sector wants an environment to run business peacefully. A sensible revenue policy is required that can for the basis of industrial development and growth.
(The author is chairman of Sunsari Chamber of Commerce and Industry.)