NC proposes relief for COVID-hit businesses
Moots hundred-day employment for those rendered jobless
Kathmandu, May 24
The Special Economic Committee of Nepali Congress led by Ram Sharan Mahat today submitted its report to the party’s President Sher Bahadur Deuba highlighting the current economic status of the country and measures to be taken to revive and upscale the economy from the shock of COVID-19 pandemic.
The report, which has highlighted the status of different sectors in the economy and steps to be taken to help these sectors fight challenges caused by the ongoing crisis, has suggested that the government and stakeholders give due priority to ensure effective health services and save people’s lives from coronavirus and revive businesses and the economy in the upcoming budget for fiscal 2020-21.
As almost every sector has been affected by coronavirus, the report suggests that the government facilitate revival of businesses through effective relief package. In order to support industry, trade and tourism, the committee has suggested that the government make arrangements to restructure repayment period of loans for at least next two years and make available working capital for businesses at subsidised interest rate.
In a bid to ensure ample liquidity in the market, the committee has also suggested that Nepal Rastra Bank bring down the cash reserve ratio, raise credit to capital and deposit ratio and raise the size of refinancing fund of the central bank.
The committee has also suggested giving certain interest subsidy to large businesses and full interest subsidy to small entrepreneurs for the next one year. The government has also been urged to utilise workers’ contribution to the provident fund and retirement fund as grant for a few months and give relief packages to workers in the informal sector.
The report adds that Nepal Electricity Authority should not charge businesses for the lockdown period and no penalty should be levied on service charges, including electricity and water, for the period.
As the lockdown has prolonged, the committee has stressed the need to urgently introduce an industrial operation guideline in coordination with local governments and ensure operation of industries across the country gradually to keep economic activities in the country on. As projects are facing labour shortage, the government has been urged to train and mobilise local manpower to give continuity to projects and operate industries.
Pointing out that economies across the world are launching relief packages of up to 12 per cent of their gross domestic product to revive their businesses and the economy, the committee has suggested that the government immediately bring in stimulus package targeting revival of the country’s economy. Such relief packages should primarily target those that have been shut due to the lockdown, adds the report.
As millions of people rendered jobless due to the COVID-19 and lockdown are facing difficulties, the report has also suggested that the government provide at least 100 days of employment for such workers and ensure an annual income of Rs 51,700 per household. Such workers should be used especially for local infrastructure development.
The committee added that the government should mobilise returnee migrant workers in the agriculture sector.
Pointing out that economic growth of 2.3 per cent as projected by the Central Bureau of Statistics is unlikely for this year and that growth would drop to almost one per cent, the committee suggested that the government introduce a realistic budget that is implementable.
“A budget of a huge size will not be fruitful as the federal government lacks the capacity to implement large-scale projects, while the provincial and local governments lack institutional capacity,” reads the report.
Restructuring public expenses and adopting austerity measures in expenses of all types will be crucial to fill the resource gap the government will face in future, states the report.
The report adds that negative impact on different aspects of the economy due to COVID-19 will directly hit the country’s plan to graduate from the least developed country status by 2021 and become a middle-income nation by 2030.
A version of this article appears in e-paper on May 25, 2020, of The Himalayan Times.