KATHMANDU, June 1: The Federation of Nepal Cottage and Small Industries (FNCSI) has welcomed the budget for Fiscal Year 2019/20 with open arms, emphasizing on the need for its proper implementation.
The federation has praised the government for its priority of decreasing imports by promoting the use of domestic products. It said that this was an area that the federation had always wanted to contribute in.
The government emphasized on developing a list of most-imported products, and increasing their production within the country itself. The federation is in support of the government's emphasis on building the local market, stating that this will help promote cottage and small scale industries in the country.
"The government's plan to make the country self-reliant on two dozen industrial products is a very positive step," Shyam Prasad Giri, chairman of the federation, stated. "The products should be listed, and budget should be separately allocated to industries producing these products."
The budget announced on Wednesday has encouraged promotion of sewing industries using cotton, silk, wool, bamboo, and allo, among other products. Seventy percent discounts on electricity tariff and a grant of 5 % toward bank interest, as announced in the budget, will further assist these industries, according to the federation. It is hoped that these policies will help limit import of clothing products and make the country self-reliant in this sector in the upcoming days.
However, as extensive strategies have not been stated, the federation doubts the effectiveness of the government's policy to promote small scale industries based on local raw material.
A fund which was announced to provide initial money to produce skilled entrepreneurs has not been implemented so far, which makes the federation further doubtful.
Though the upcoming year's budget has focused much on establishing industrial areas across the country and promoting public-private partnerships, going by past years' dissatisfactory results, the federation is not very upbeat about its effectiveness.
The budget has also been unable to include the federation's plans for scientific study to develop industrial technology. The FNCSI interprets that the 400,000 small scale industries will not be encouraged for technological development this coming year as well.
The increment of social security budget and less-than-expected budget for capital expenditure make it challenging to achieve 8.5 % economic growth target, the FNCSI said.