Nepal | July 07, 2020

MoI faces budget crunch to implement new projects

Himalayan News Service
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Kathmandu, December 9
At a time when the ruling Communist Party of Nepal (Maoist-Centre) is mulling to bring a supplementary budget, the Ministry of Industry (MoI) has said that it is facing a budget crunch to implement different projects that the ministry has initiated this fiscal year.

Though MoI had sought budget for various new projects from the Ministry of Finance (MoF), the latter has only made a commitment to provide necessary financial assistance but has not issued any budget for the projects, according to Industry Minister Nabindra Raj Joshi.

MoI has initiated a few projects like reviving various defunct state-owned industries and also to generate employment for 50,000 people through promotion of small enterprises by this fiscal year. However, due to lack of budget, there is uncertainty regarding these projects.

“We have asked the finance ministry to release necessary budget for industrial projects that MoI has initiated at present. Though MoF is positive about issuing the required budget, delay in budget issuance can adversely affect our projects,” said Minister Joshi, adding that MoF should allocate budget to new industry projects as soon as possible so that these projects can start operations immediately.

If the government is able to bring a supplementary budget, Joshi said that ample budget should be allocated to the industrial sector to ensure growth of industries in Nepal. “We are preparing concrete suggestions that need to be
addressed in the supplementary budget if it is issued and ample budget to industrial sector is one of the suggestions,” said Joshi.

MoI has been emphasising on the revival of six different defunct state-owned enterprises. While the Cabinet has already approved MoI’s proposal to revive Nepal Drugs Ltd (NDL), MoI has announced that it would also resume operations of Hetauda Textile Factory, Birgunj Sugar Factory Ltd, Gorakhkali Rubber Industry, Nepal Metal Company and Butwal Dhago Karkhana Ltd.

Similarly, MoI has also announced about promoting small and medium enterprises (SMEs) in the country this year. MoI aims to generate employment for around 50,000 people across the country in the SMEs sector by training people for micro businesses and increasing micro entrepreneurs’ access to finance.

Informing that current loan default in SMEs sector is at only around five per cent, Minister Joshi said, “MoI is ready to guarantee a certain per cent of loans that could be defaulted by micro enterprises, however, MoF’s support is paramount.”

MoI Spokesperson Yam Kumari Khatiwada said that a huge budget is also required for MoI’s plan to set up Allo processing centres in 10 different locations of the country aimed at facilitating farmers.

A version of this article appears in print on December 10, 2016 of The Himalayan Times.

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