Kathmandu, July 22 :

Handicraft Association of Nepal (HAN) has termed the recently announced budget for the fiscal year 2006-06 as yet another burden on the small and medium enterprises.

Instead of giving incentives to the SMEs, which are already in doldrums, the government has withdrawn the income tax exemption given to small and cottage industries, states a HAN’s statement on post-budget reaction. “The budget has neglected the role played by SMEs in employment generation, utilisation of local resources and foreign exchange earnings.”

HAN said the budget failed to bring a special package of incentives for the expansion of SMEs throughout the country, which could play a pivotal role in poverty alleviation. Nepal’s competitive advantage in foreign trade lies on exports of traditional handicrafts, paper crafts and other products produced by SMEs.