Some stakeholders sceptical about effective implementation
KATHMANDU, MAY 29
Finance Minister Prakash Sharan Mahat presented the federal budget of Rs 1.751 trillion at the Parliament today.
Against this backdrop, the private sector has regarded the budget for the fiscal year 2023- 24 as positive with tangible targets on the whole, yet expressed doubts regarding its implementation.
Speaking with The Himalayan Times after the budget announcement, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Chandra Prasad Dhakal said the budget seemed overall positive as it has given importance to the private sector and has shown commitment to improving the existing economic conditions.
"The inclusion of measures to promote the private sector as the engine of the economy is evident in the budget. The budget has also incorporated suggestions provided by the FNCCI," Dhakal said.
According to him, the government has announced sev-eral welcoming steps such as increasing the capital expenditure and reducing unproductive expenses. He also mentioned that one of the budget highlights was the allocation of funds specifically for completion of all planned projects, ensuring that they can commence without delay. And to facilitate the process of clearing forest areas and tree cutting, it has been mentioned that decisions will be made within 30 days of receiving the application. "The budget has also mentioned simplifying the process of land acquisition for project implementation."
In view of the current economic downturn, Dhakal emphasised the importance of aligning the Monetary Policy for the next fiscal with the budget. "The coordination between these factors will play a crucial role in addressing the challenges. Moreover, the impact on the private sector as a whole is uncertain and calls for a thorough assessment through appropriate economic legislation."
In a media interaction after the budget announcement,Bishnu Agrawal, president of Confederation of Nepalese Industries (CNI), remarked that the government has displayed a strong commitment to implementing the budget plan and policies with effective monitoring of the implementation process through the establishment of a dedicated committee."The budget contains several positive programmes and policies, such as the utilisation of domestic construction materials for major projects and provision allowing starting a firm with a nominal fee of Rs 100. It would be highly beneficial if the commitments made through the budget are effectively implemented. However, a thorough analysis is necessary before making any further comments."
Meanwhile, Krishna Acharya, president of the Independent Power Producers' Association, Nepal, expressed his appreciation to the government for providing opportunities to the private sector to participate in electricity trade. He highlighted that such measures would encourage investment and facilitate growth andexpansion of the private sector in electricity production and businesses.
"The initiatives taken to expand transmission lines, construct substations, and promote large-scale hydropower projects through green bonds are positive steps for the growth and development of the energy sector. These efforts are praiseworthy. However, it is disconcerting that the government has reduced thebudget allocation for the power sector compared to previous years," Acharya told THT.
Binayak Shah, president of Hotel Association Nepal (HAN), acknowledged the government's focus on infrastructure development, specifically improvement of highways and the promotion of Gautam Buddha International Airport and Pokhara Regional International Airport.
"These initiatives have instilled confidence regarding revitalisation of tourism industry.
Also by declaring the next 10 years as 'Tourism Decade', the government has demonstrated its commitment to supporting the sector."
However, Shah expressed his disappointment regarding the government's failure to recognise the hotel industry as a national priority sector, despite its substantial investments and significant contributions to foreign currency earnings and employment generation.
Meanwhile, Chhote Lal Rauniyar, immediate past president of Nepal Investors Forum said that the budget has indirectly addressed the share market thereby boosting investor confidence.
"The government announced it would allow non-resident Nepalis (NRNs) to invest in publicly-listed hydropower and other companies within the real sector through the secondary stock market. Overall, the provisions in the budget are share market-friendly.
However, there was no mention of revision in the capital gains tax, which was a bit disappointing."
Some stakeholders also voiced scepticism regarding the successful implementation of the budget.
Rajendra Malla, president of Nepal Chamber of Commerce (NCC), expressed his reservations stating that the announced programmes seem to only offer consolation, and he expressed doubts over their effective implementation.
However, he emphasised that it is too early to form a conclusive opinion and mentioned that a comprehensive statement on behalf of the NCC will be issued tomorrow.
A version of this article appears in the print on May 30, 2023, of The Himalayan Times.
