KATHMANDU, May 31: While noting that the government may face serious challenges in its implementation in view of the ongoing COVID-19 pandemic, private sector bodies have welcomed the budget 2021/22 with a cautious note.
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries and Nepal Chamber of Commerce-- the umbrella organizations of the private sector-- said the government will have tough time to realize its ambitious targets of revenue collection worth Rs 1.02 trillion as the country’s economic sector is battered by the COVID-19 pandemic. They have also concluded that the government’s target to achieve an economic growth rate of 6.5 percent for the next fiscal year is unrealistic.
Amid sharp criticism that the caretaker government should not introduce a full budget through an ordinance, the government on Saturday introduced its full package financial plan for the fiscal year 2021/22. Of the total expenditure size of Rs 1.647 trillion, the budget has come up with an allocation of Rs 122.77 billion for the health sector and more than Rs 45 billion for agriculture sector. Rs 374 billion has been earmarked for development projects.
The private sector hailed the new budget for its decision to scrap excise duty on import of electric vehicles and a number of electric equipment, 50 percent tax exemption on agricultural income and income tax subsidies for pandemic affected sectors like tourism, transport and movie industry, among others. An increase in the threshold from Rs 5 million to Rs 10 million for the commercial tax payers and VAT refund in the purchase of diesel and liquefied petroleum gas for businesses are also the provisions welcomed by the private sector.
The private sector bodies, however, have maintained that the budget fails to incorporate the issues of small and medium enterprises, informal workers and VAT refund on hydropower businesses. FNCCI President Shekhar Golchha expressed dissatisfaction over the failure of the budget to provision asset tracking system that can help to ensure effective implementation of the Money Laundering Prevention Act, 2008.