Finance Committee holds discussion with private sector representatives; interest rate on bank loans should be slashed by five percent for at least three years

The Finance Committee of the House of Representatives held discussion with the representatives of private sector on the matters to be incorporated in upcoming fiscal years' policy and programmes, and budget.

The parliamentary committee held discussion with the office-bearers of the Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries, Nepal Chamber of Commerce and Federation of Nepal Cottage and Small Industries on the issues to be included in the government policy, programmes and budget in the fiscal year 2020/21.

The private sector apprised the committee of the unprecedented global economic crisis exacerbated by COVID-19 pandemic and its spiral effects in the entire Nepalese economy following the halt of business and industry.

Noting that the country's industry, trade and entrepreneurship is on verge of collapse owing to current situation, the private sector representatives had recommended the finance committee to revitalize economy by boosting their confidence.

The representatives also highlighted the need to bring reforms in monetary, labour and employment, electricity and policy issues for enhancing partnership in policy and relief-related programme by announcing economic resurgence package.

Among the recommendations provided by the private sector include slashing bank loan interest rate by five percent for at least for three years, setting up re-loaning fund of Rs one trillion for keeping confidence of waning industry and business and re-adjusting bank loan from spread rates.

Business communities have suggested that interest rate on bank loans should be slashed by five percent for at least three years and a re-financing fund worth Rs 100 million should set up and the fund bears loan interest for business for three years and provides loans with the concerned bank adjusting two percent from the spread rate.

They demanded a provision which manages five percent refinancing for loan interests and salaries for workers at industries and makes arrangements to pay loans in installments for two years.

There should be approval and recommendations for restructuring of bank loans and arrangements should be made for capitalising loan interests for five years.

Stating that there is no clarity in timeline relating to the payment of loans and interests set by the government, they demanded a total 10 percent concession on loan interests after giving a week's time and clarifying the timeline. Likewise, they demanded free of electricity demand charge for four months, a 15 to 20 percent concession on electricity tariffs and extension of the timeline to pay electricity tariffs.

Stressing the need to develop small and cottage industries to reduce losses caused by the infection, acting chair of Nepal Small and Cottage Federation Umesh Prasad Singh suggested that arrangements should be made to provide facilitator loans and device other policies.

Similarly, president of the Federation of Nepalese Chambers of Commerce and Industry, Bhawani Rana, president of the Confederation of Nepalese Industries, Satish Kumar More and President of the Nepal Chamber of Commerce, Rajesh Kaji Shrestha apprised the committee of hardships facing the business community.