Exports incentive scheme implementation uncertain

KATHMANDU, June 2: Chances of the government implementing the much-lauded cash incentives program for exporters have become slim, as the guidelines prepared for the distribution of the incentive is gathering dust in Cabinet since four months.



Ministry of Commerce and Supplies (MoCS) had forwarded the guidelines to the cabinet for approval in January. The proposal is languishing in the Cabinet’s finance bill committee. [break]



“Given that we have just over two months remaining in the current fiscal year, it seems that we will not be able to implement the program,” said a MoCS official.



The government through the budget for fiscal year 2010/11 had announced cash incentives of 2 to 4 percent (of the exports value) to the third-country exporters depending on the degree of value addition in an effort to boost exports in convertible currency.



As per the new export subsidy scheme, exporters of commodities generating up to 80 percent value addition will get cash incentive of 3 percent and those exporting goods generating value addition of more than 80 percent will enjoy 4 percent cash incentive.



The program had received warm response from the business community. However, the non-implementation of the program has left business people worrying.



“The implementation of export subsidy scheme has become uncertain. We still don’t know why the cabinet has not endorsed it,” the MoCS official told Republica.



Purushottam Ojha, secretary at Economic Affairs and Infrastructure Development Division at the Prime Minister’s Office, said the guideline is pending at the cabinet’s finance bill committee. “The guideline is in the process of getting endorsed, but I can’t say when it will get the cabinet’s nod,” Ojha added.



The government has allocated Rs 240 million to provide cash incentives to exporters in the current fiscal year.



Exporters have flayed the government’s failure to live up to its commitments. “How can we trust the government if the government keeps on failing to implement its programs?” wondered Uday Raj Pandey, president of Garment Association of Nepal.



Pushpa Man Shrestha, president of Nepal Pashmina Industries Association, said the government has betrayed the exporters by showing lack of seriousness in implementing the scheme.



Nepal exported goods worth Rs 47.98 billion during the first nine months of the current fiscal year, up by 7.4 percent compared to the figure recorded during the same period last year.

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