The private sector has expressed reservations against the government's recent decision of increasing minimum salary of workers.

In a joint statement issued today by the Federation of Nepalese Chamber of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI) and the Nepal Chamber of Commerce (NCC), they have expressed dissatisfaction over the government's decision regarding workers' minimum wage.

The statement has stated that the private sector does not want the government to interfere in the arrangement of fixing wages by mutual consent during the times of crisis. The private sector has been unable to get any respite from the business continuity loan announced through the current fiscal year's monetary policy due to its disappointing implementation.

The government has decided to increase the minimum wage by publishing a notice in the Nepal Gazette on May 4. A statement issued by the three organisations says that they were surprised by the notice issued by the government when the country is reeling under the second wave of the pandemic and most enterprises are closed.

"Currently, complete and partial restrictions are being imposed in 56 districts of the country. More than 700,000 businesses operating in these districts have been affected," the statement reads. As most of them are small and medium entrepreneurs, it will be difficult for them to manage their daily expenses, it adds.

It is a well-known fact that these businessmen were most affected during last year's lockdown. The government has decided to increase the wages with effect from mid-July. The business associations have said that it would be difficult to implement the government's decision if the current situation prolongs.

"In the current context, the private sector is taking all possible measures to improve the supply chain and promote economic activities as far as possible," the statement states, "Special emphasis should be placed on measures to keep the economy afloat and save employment."

At the time when the government should focus on saving the jobs of workers, it has increased the minimum wage from Rs 13,450 to Rs 15,000 per month, which could force industries to downsize.

"The pandemic has affected the tourism and dependent industries for more than a year and has further impacted small and medium enterprises. At present, many tourism-related entrepreneurs have reached a mutual agreement with their staff regarding pay in the absence of work," the statement says.

"Increasing the minimum wage will further affect these businesses and entrepreneurs."

A version of this article appears in the print on May 7, 2021, of The Himalayan Times.