Study panel discourages govt subsidy to industries using foreign labour
Kathmandu, August 21
A study panel has outlined the need to discourage subsidies for domestic industries using foreign labourers and raw materials in a bid to promote the doing business environment in the country.
The 13-member joint study committee of the private sector and government, which was formed a week back to look into different private sector issues, has come up with various suggestions for the government, including the need to subsidise only those industries that add value to the country's economy.
However, the committee is yet to finalise the report and submit it to the government.
As per the preliminary report of the committee, a number of industries that are based on imported raw materials and are deploying foreign workers have been enjoying the industrial subsidies of the government while industries using local resources and generating employment for Nepali people have been overlooked by the government.
“The government should not only discourage subsidies for such industries but should give special preference to local raw materials-based industries,” said Bhim Ghimire, one of the members of the committee and president of Morang Chamber of Commerce and Industry.
Similarly, the committee has outlined the lack of reliable supply of electricity to industries. As a result of low-voltage electricity supply and frequent tripping, industries have been bearing huge losses, resulting in increased production cost, informed Ghimire. “Nepal Electricity Authority (NEA) should ensure that electricity supply is smooth in the industrial corridor.”
Likewise, the study committee has also stressed that the government should immediately intervene in the rising banking interest rate, which has created havoc in the industrial sector.
“The instability in bank's interest rate on loans has not only affected industrial output but has also discouraged investments in the country,” added Ghimire.
A group of industries that lie within the various industrial corridors of the Tarai region had earlier pressurised Prime Minister KP Sharma Oli to address the private sector's concern. Subsequently, the Ministry of Finance, under the direction of the Office of the Prime Minister and Council of Ministers, had formed a study committee under the coordination of Revenue Secretary Sishir Kumar Dhungana.
The committee is expected to submit its report to the government soon.