Vague policies hindering growth of cottage and small industries: FNCSI
Kathmandu, June 8
Stakeholders of domestic industries have said that the ambiguous policies of the government have become a major setback for industrial growth — basically the growth of cottage and small industries — in Nepal.
Speaking during the 28th anniversary of the Federation of Nepal Cottage and Small Industries (FNCSI), stakeholders said that the number of such industries is declining in the country every passing year due to ambiguous policies and lack of priority given by the government to the sector. Due to this, they said, small and cottage industries have not been able to make significant contribution to GDP growth, although such local industries could play a vital role in transforming the economy.
“Policy formation is an ongoing process. The government should reform policies and other laws to make them clear and contextual in line with the political and economic situation,” Shyam Prasad Giri, president of FNCSI, said, adding that implementation of clear and contextual government policies alone could uplift various sectors, including the cottage and small industries.
“If economy-related laws in the country are reformed and made contextual by removing all ambiguities, cottage and small industries could play a significant role in transforming Nepal’s economy,” Giri said.
Traders also said that the export of local products is declining due to lack of effective marketing and market identification, despite being equally competitive. They urged the government to establish an Export House in the country which would be responsible to collect products manufactured by cottage and small industries and promote them in the domestic as well as international markets.
Meanwhile, Basudev Giri, chairperson of the advisory committee of FNCSI, said that though increasing investment is the primary means of promoting cottage and small industries, banks and financial institutions (BFIs) are reluctant to give service to such industries.
Similarly, he also said in absence of clear investment policies, investors are being discouraged to invest in the country.
“While domestic products lack access to markets, import of similar foreign products is increasing in the country,” he said, adding that a number of cottage and small industries have been forced to shut down in the country after they were unable to compete in the market.