Pvt sector terms budget disappointing
KATHMANDU, JUL 16 -
Although the budget addressed some of its pressing demands, the private sector is less than enthusiastic over the budget, given its overall orientation.
The new budget is a mixed bag for the sector. While on one hand it tries to address some demands raised by the sector, on the other it tries to annoy them when it says cooperatives will be the medium for employment generation and productivity.
The private sector has taken the move to opt for a mixed economic system instead of a liberal one and more focus on cooperatives instead of the private sector as a major policy deviation. Last year’s budget had tried to be more private sector-friendly with policy measures, tax incentives and infrastructure support.
The business community has taken the budget’s emphasis on the cooperative sector as an attempt to minimise the role of the private sector in production and employment generation. “We are disappointed with the budget as it seeks to make cooperatives the medium of economic growth by minimising the role of the private sector and indiscriminate distribution of grants,” Bhaskar Raj Rajkarnikar, senior vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said.
He said the budget advocates for a mixed economy instead of a liberal one. “An FNCCI meeting will strongly deplore the minimisation of the private sector in the budget,” Rajkarnikar said.
Former FNCCI President Chandi Raj Dhakal echoed Rajkarnikar. “It is an irony that the budget has sought the private sector’s role in waste management and the cooperative’s role in infrastructure development and employment creation,” he said.
The budget seeks employment creation from both the cooperatives and the private sector with focus on energy, roads, irrigation, tourism and the agriculture sectors.
The budget, however, addresses some key issues of the private sector, even risking criticism from international financial institutions and the anti-money laundering body.
One of their major concerns—income source disclosure in real estate and share trading and deposits of more than Rs 1 million in banks and financial institutions—has been replaced by a provision of non-declaration of the income source. As per the new provision, one can declare that money being deposited is not earned illegally from sources such as terrorism, drug and human trafficking and organised crime.
The budget has also expanded the ceiling of the income source disclosure requirement while purchasing vehicles and trading real estate to Rs 5 million and Rs 10 million respectively. Bankers and the business community were seeking a similar provision so that deposits would come to the banking system and liquidity crunch could be addressed. This change will definitely benefit banking, the realty sector and the capital market.
Another important demand addressed by the budget is that the government will make a new arrangement in the Property Tax Act so that individuals, families or companies can make a voluntary disclosure of all the fixed and movable properties including land, ornaments, cash, deposits in BFIs, lending, investment in shares and vehicles. Arrangements will be made to allocate revenue generated from the voluntary disclosure of property to measures to solve energy problems in the country. The government has also promised a security arrangement by declaring industrial estates as zones of peace.
The government will organise an international investment forum in the next fiscal year to attract foreign investment in industries having comparative and competitive advantage. The government has also allocated budget for the installation of separate electricity feeders in Biratnagar, Birgunj, Kathmandu and Butwal-Bhairawa. This was one of the demands of the FNCCI.
Moreover, the budget has made arrangements to exempt from customs duty machinery imported by the private sector to generate solar and other alternative energy.
Finance Minister Bharat Mohan Adhikari said the government will come up with special programmes to attract both domestic and foreign investment for the development of water resources, tourism and infrastructure.
The budget also says that the remaining work for the establishment of a special economic zone in Bhairahwa will be completed within the next fiscal year. In addition to the economic zones started earlier, preliminary work to establish such zones in Biratnagar, Jumla and Panchkhal will be accelerated.
Likewise, the government will complete preparatory work to establish the Industrial Investment Protection Fund. The budget has allocated Rs 100 million to set up a Women Entrepreneur Fund.
The budget also plans to provide special facilities to those exporting agricultural products like tea, coffee, cardamom, herbs and unseasonable vegetables. In order to upgrade the quality of exportable cardamom, a latest facility of drying and packaging will be made available.
• Separate electricity feeders to be installed in major industrial and business hubs like Biratnagar, Birgunj, Kathmandu and Butwal-Bhairawa.
• A new Industrial Enterprises Act to be enacted within the next fiscal year in line with the Special Economic Zone Act, Investment Promotion Board Act and Industrial Policy 2010.
• Establishment of a single point service centre to extend facilities and concessions provided by laws, and services including infrastructure on time and without hassles
• Special programmes to attract both domestic and foreign investment for the development of water resources, tourism and infrastructure
Source: Kantipur
Although the budget addressed some of its pressing demands, the private sector is less than enthusiastic over the budget, given its overall orientation.
The new budget is a mixed bag for the sector. While on one hand it tries to address some demands raised by the sector, on the other it tries to annoy them when it says cooperatives will be the medium for employment generation and productivity.
The private sector has taken the move to opt for a mixed economic system instead of a liberal one and more focus on cooperatives instead of the private sector as a major policy deviation. Last year’s budget had tried to be more private sector-friendly with policy measures, tax incentives and infrastructure support.
The business community has taken the budget’s emphasis on the cooperative sector as an attempt to minimise the role of the private sector in production and employment generation. “We are disappointed with the budget as it seeks to make cooperatives the medium of economic growth by minimising the role of the private sector and indiscriminate distribution of grants,” Bhaskar Raj Rajkarnikar, senior vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said.
He said the budget advocates for a mixed economy instead of a liberal one. “An FNCCI meeting will strongly deplore the minimisation of the private sector in the budget,” Rajkarnikar said.
Former FNCCI President Chandi Raj Dhakal echoed Rajkarnikar. “It is an irony that the budget has sought the private sector’s role in waste management and the cooperative’s role in infrastructure development and employment creation,” he said.
The budget seeks employment creation from both the cooperatives and the private sector with focus on energy, roads, irrigation, tourism and the agriculture sectors.
The budget, however, addresses some key issues of the private sector, even risking criticism from international financial institutions and the anti-money laundering body.
One of their major concerns—income source disclosure in real estate and share trading and deposits of more than Rs 1 million in banks and financial institutions—has been replaced by a provision of non-declaration of the income source. As per the new provision, one can declare that money being deposited is not earned illegally from sources such as terrorism, drug and human trafficking and organised crime.
The budget has also expanded the ceiling of the income source disclosure requirement while purchasing vehicles and trading real estate to Rs 5 million and Rs 10 million respectively. Bankers and the business community were seeking a similar provision so that deposits would come to the banking system and liquidity crunch could be addressed. This change will definitely benefit banking, the realty sector and the capital market.
Another important demand addressed by the budget is that the government will make a new arrangement in the Property Tax Act so that individuals, families or companies can make a voluntary disclosure of all the fixed and movable properties including land, ornaments, cash, deposits in BFIs, lending, investment in shares and vehicles. Arrangements will be made to allocate revenue generated from the voluntary disclosure of property to measures to solve energy problems in the country. The government has also promised a security arrangement by declaring industrial estates as zones of peace.
The government will organise an international investment forum in the next fiscal year to attract foreign investment in industries having comparative and competitive advantage. The government has also allocated budget for the installation of separate electricity feeders in Biratnagar, Birgunj, Kathmandu and Butwal-Bhairawa. This was one of the demands of the FNCCI.
Moreover, the budget has made arrangements to exempt from customs duty machinery imported by the private sector to generate solar and other alternative energy.
Finance Minister Bharat Mohan Adhikari said the government will come up with special programmes to attract both domestic and foreign investment for the development of water resources, tourism and infrastructure.
The budget also says that the remaining work for the establishment of a special economic zone in Bhairahwa will be completed within the next fiscal year. In addition to the economic zones started earlier, preliminary work to establish such zones in Biratnagar, Jumla and Panchkhal will be accelerated.
Likewise, the government will complete preparatory work to establish the Industrial Investment Protection Fund. The budget has allocated Rs 100 million to set up a Women Entrepreneur Fund.
The budget also plans to provide special facilities to those exporting agricultural products like tea, coffee, cardamom, herbs and unseasonable vegetables. In order to upgrade the quality of exportable cardamom, a latest facility of drying and packaging will be made available.
• Separate electricity feeders to be installed in major industrial and business hubs like Biratnagar, Birgunj, Kathmandu and Butwal-Bhairawa.
• A new Industrial Enterprises Act to be enacted within the next fiscal year in line with the Special Economic Zone Act, Investment Promotion Board Act and Industrial Policy 2010.
• Establishment of a single point service centre to extend facilities and concessions provided by laws, and services including infrastructure on time and without hassles
• Special programmes to attract both domestic and foreign investment for the development of water resources, tourism and infrastructure
Source: Kantipur
