Vehicles classified as a luxury item will be discussed upon: Finance Minister Paudel

KATHMANDU, Jan 24: Deputy Prime Minister and Minister of Finance Bishnu Paudel has said that during the preparation of the budget for the next fiscal year, they will discuss the issue of vehicles being classified as luxury items.

NADA Automobiles Association of Nepal (NADA) has said that Finance Minister Paudel will call NADA to discuss the problem of auto dealers while preparing the budget.

A team of officials led by NADA President Dhruba Thapa told Finance Minister Paudel about the impact of Nepal Rastra Bank's tightening in the auto sector.

In the meeting, NADA President Thapa said that the provision of mandatory cash 'margin' when opening an LC for imports, the decision to remove the ban on imports after eight months, was welcome.

Thapa said that the government's decision had a positive impact on businesses including automobiles. According to NADA, President Thapa informed Finance Minister Paudel that due to some policies of NRB, businessmen had to flee.

In the discussion, President Thapa said that the risk burden on auto loan/hire purchase loans should be brought down from 150 percent to the previous level of 975 percent, the current limit of 50 percent should be increased in the process of disbursing private vehicle hire purchase loans from banks to make the sluggish automobile business dynamic, and some unreasonable points in the current capital loan guidelines should be amended.

NADA General Secretary Surendra Kumar Upreti stressed the need to facilitate trade with India and attract Indian investment. He said that there is a lot of potential in the automobile spare parts industry like the vehicle assembling industry in Nepal and the government should bring a program to attract investment in that sector.