CNI Raises Concerns Over Government's Minimum Wage Increase, Citing Economic Challenges
The Confederation of Nepalese Industries (CNI) has responded to the government's recent decision to increase the minimum wage for workers, stating that the government cannot bear the financial burden of paying the new minimum wage. The government officially announced the wage hike through a notice published in the gazette last Thursday.
The Confederation has expressed its concerns over this wage increase, emphasizing that the private sector is currently ill-equipped to meet these elevated wage requirements. They pointed out that several pressing issues are exacerbating the situation. These include the ongoing economic recession, dwindling morale within the private sector due to high interest rates, low demand, and reduced production.
In light of these circumstances, the Confederation reported a significant 70 percent decline in production within various industries. Industrialists have also indicated that investment plans are being delayed due to the prevailing economic challenges.
The Confederation further elaborated that even if production were to increase, the existing economic conditions would result in limited demand. This would place an additional financial burden on industries already struggling to cope with the rising cost of production. While the Confederation acknowledges the importance of raising the minimum wage for workers, they maintain that, given the current predicaments, the private sector lacks the capacity to meet these increased wage obligations.
In response to these issues, the Confederation has called for essential reforms to make the economy more sustainable. They have urged the government to adopt policies aimed at boosting overall market demand, reducing production costs, and reinvigorating the private sector's morale.
The situation remains complex, with both the government and private sector facing considerable challenges in navigating the economic landscape. The Confederation's plea for reforms underscores the urgent need to address these issues and find a balanced solution that benefits workers and sustains economic growth.
