KATHMANDU, March 12: The Ministry of Finance (MoF) has sent letters to industrialists seeking their suggestions to promote the production sector in the country. The ministry plans to incorporate their suggestion in the upcoming budget for the fiscal year 2021/22.
According to an official of the MoF, the ministry has sent an email to over 1,000 entrepreneurs for their suggestions. This is probably the first time that the government has sought advice on an individual basis from the business community.
The ministry has started the process to prepare a budget for the next fiscal year to be announced on May 29. For this purpose, the ministry has formed a task force led by Joint-secretary Ram Prasad Ghimire.
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Currently, the government has been facing challenges to revive the production businesses that were hard hit by the COVID-19. Although the government issued stimulus packages, a large number of industries have failed to reap benefit out of such relief measures to revive their businesses.
According to a study report of the Ministry of Industry, Commerce and Supplies, the industrial production went down by 73 percent, while 10 percent of industries were completely shut due to adverse impacts of the COVID-19. Similarly, the COVID-19 pandemic had taken down the production capacity of around 54 percent of the industries to almost half of their potential.
Due to the same reason, Nepal’s economic growth in the last fiscal year went down by 1.99 percent, according to a report published by the Central Bureau of Statistics (CBS) last week. In the first three months of the current fiscal year too, Nepal’s economy has shrunk by 4.6 percent, the CBS report said.
The source said that the government through the upcoming budget is targeting to revive the economy by boosting domestic production. “The budget will consider the recommendations of the industrialists to solve the underlying problems seen in the sector.”
As per the MoF official, the government could possibly revise the duty on the import of raw materials to support the domestic production businesses. Industrialists have also been demanding the government to maintain a difference in duty rate of finished goods and raw materials by notable amount.
