'Govt's budgetary measures not enough to revive business'

Published On: May 29, 2020 12:00 PM NPT By: Muna Sunuwar  | @TheMunaSun

“It should have come up more openly for the private sector”

Bhawani Rana, president, Federation of Nepalese Chambers of Commerce and Industry (FNCCI)  

Though the budget size is small, it has managed to allocate a significant amount for the health sector which is an immediate priority at present. It has tried to address some concerns of the private sector by supporting the industries to revive. But it should have come up more openly for the private sector. We had demanded that the government introduce a stimulus package of at least five percent of the country’s GDP but the government has introduced a package of about four percent. These supports will help us revive but we are weak in the implementation part so it needs to be taken into consideration. We had asked for tax and electricity bill exemption for the industries but that was not included.

“Budget is not enthusiastic for the tourism industry”

Shreejana Rana, President, Hotel Association of Nepal

The expectations we had from the government regarding the budget plan were not met. We had particularly focused on a Job Retention Fund for the survival of the industry. The tourism industry cannot be revived right after the COVID-19 risks are curbed; it is expected to be affected for a long time. There are a few positive pointers the government has introduced but the main thing is the implementation part and evaluation of the projects to make sure that the investment made is protected. The budget the government has presented this fiscal year is not enthusiastic for the tourism industry. There is an immediate crisis in the tourism sector but instead of addressing that, the government has introduced programs for the long run. The concern is surviving the tourism industry and the government should have prioritized that part.     

“It was an opportunity for the country to rise above traditional way but sadly that could not materialize”

Dilli Raj Khanal, Economist

If the programs were concretized, it would have been easier in implementation and make them result-oriented. The government should have interlinked programs and prepared a strategy but it failed to do so. There is ambiguity in the intention of the government. Though it has mentioned the decentralization of the power in the beginning, the statement has not been established in the program presentation. Power for the programs like agriculture and social security fund (SSF) that can be mobilized by provincial and local level has been exclusively held by the central government and simply put by stating that it will be implemented through coordination. It seems the government has taken the situation and economic context we are in, very lightly. It was an opportunity for the country to rise above the traditional way but sadly it could not materialize this time also.   

“Much-needed packages to protect the existing enterprise were not delivered this fiscal year”

Sharada Rijal, CEO, United Nepal Felt Industries Pvt Ltd

Entrepreneurs and Industrialists had raised concerns of loan interest in response to which the government is now making loans available at five percent interest rate. There was no clear plan for export which is very important at a time when the country is seeing a fall in remittance. It would have helped balance trade deficit by bringing in foreign currencies. The programs have been repeated despite the fact that their implementation had been weak. The overall concerns of small and medium-sized enterprises (SMEs) have not been addressed. Much-needed packages to protect the existing enterprise were not delivered this fiscal year. The government’s decision to exempt SMEs from income tax is appreciable. There is a good package for industries running inside industrial estates but there are no women entrepreneurs in the area. Women and enterprises operating from home will have a hard time to survive.

“The budget is balanced and contextual given the situation the country is in”

Kailash Prasad Dhungel, Minister for Economic Affairs and Planning, Bagmati Province

The budget is as per the current need of the country. It has focused on the prevention and protection of the economy and life of Nepalis that have been affected by COVID-19. The budget has addressed the management of employment generating sectors like agriculture and industries. The government could have done better than this but given the situation the country is in, the budget is balanced and contextual. The budget size is also appropriate as per the needs of the country.  

“There should have been a new vision”

Minendra Rijal, member of House of Representative, Nepali Congress

The current expenses in the upcoming fiscal year will increase by 35 percent due to COVID-19. But the government should have been able to restrain it. As per the WHO, Nepal is expected to see more COVID-19 cases, so there will be bigger expenses to revive the country's economy, and for relief activities. The government plans on increasing the tax collection by 22 percent but the size of the country's economy is less likely to increase. So, the target of tax collection is not realistic. There is no base for capital expenditure as the budget will not be sufficient. It is a hard time for the country but there should have been a new vision on how it is planning on getting out of the trouble. 

Govt set growth target to draw popularity

Prof Ram Prasad Gyanwaly, Economist, Former Head of The Central Department of Economics, TU 

This is the financial plan of the government enforced during the great crisis of the century. Expenditure for the health sector has increased remarkably, which is appreciable. But the programs to rescue the health sector are not clear. Regular expenditure is higher than the revenue of the government which is not a good symptom. Though it talks to minimise the regular expenditure, the measures are not noteworthy. This is the weakness of the budget. Further seven percent growth target might not be achievable because it is uncertain how long the impact of the corona crisis will prevail. The growth target has been set for political popularity. Again expenditures are very scattered  which is another weakness of the budget.

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