FNCCI seeks support from government to revive business sector

Published On: April 11, 2020 09:19 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, April 11: The private sector has asked for support from the government to revive the business sector that has been hit hard due to the coronavirus (COVID-19) outbreak in the world.

Stating that the business and industries have remained shut due to the fear of transmission of COVID-19, followed by the nationwide lockdown in the country, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said that it will be hard for the companies and firms to manage cash flow even in the post lockdown period. The federation on Friday submitted suggestions to the Minister of Finance, Yubaraj Khatiwada to revive the private sector.

The private sector has demanded the government to arrange refinancing with only 2% interest rate to companies and firms working in tourism, import, production based and agriculture sector for the payment of a year's worth salary and wages to employees. They have stated that the loan repayment period should be for two years and should have the provision of payment in installments. “Also the loan interest rate should apply to all small, medium and big companies and firms for the payment of salary to the workers for six months since mid-March,” the suggestion read, adding, “For them, the repayment period should be six months and have the provision of payment in installments.”

They have demanded the banks to increase the lending amount of working capital loan and over draft loan by 10%. And the working capital should be valid even if there is imbalance in debt equity ratio for a year.

As per the direction of Nepal Rastra Bank on March 29, to waive 10% off the payment on the installment on term loan, they have also suggested expansion of the provision to working capital loans and other types of loans as well.

As tourism sector has been hit hard, tourism entrepreneurs assume that it will take at least a year to recover from the impact of the COVID-19 crisis. FNCCI in its suggestion has mentioned that there should be an arrangement for retaining only required manpower, deducting salaries and facilities of the employees accordingly to manage the crisis.

“Nepal Electricity Authority (NEA) should not charge demand charge until lockdown continues when the industries and factories have remained shut,” the FNCCI suggested, “The NEA should rather provide electricity at cheaper rate for six months.”

They have voiced that it would be easier for the companies to make their staff work if the risk of COVID-19 was automatically added in the insurance policies.

The suggestion submitted to the government further added, “If any company or firm wants to lower its size or capacity or even shut down, there should be a law to let the employees go with minimum amount and the size can be predetermined by the company.”

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