Print Edition - 2014-06-06 | MONEY
CNI seeks Rs 10b ‘stimulus’ for industrial development
Jun 5, 2014-
Confederation of Nepalese Industries (CNI) has asked the government to allocate Rs 10 billion as a “stimulus package” for industrial development in the budget for the next fiscal year.
Presenting its suggestions to the Finance Minister on Thursday, CNI also emphasised on the need for a common minimum economic agenda for policy stability and economic development.
The private sector body suggested the government amend the existing industrial acts and policies so that they remain stable. It also proposed setting up of a Research and Development Fund (R&D Fund) for ensuring minimum fundamental infrastructure to attract investment and for encouraging industries to increase their capacity. “There is also a need for a concrete policy on human resource (HR) development for creating an industry-friendly environment,” read a CNI statement.
“Both the finance minister and the finance secretary are positive on most of our demands. We are quite optimistic that our agendas would be accommodated in the budget,” said Bashanta Raj Mishra, vice-president at CNI, adding the confederation strongly lobbied for the development of infrastructure and tourism sectors during the meeting with the minister.
CNI has said the government should set a target on industrial development and the development of new industrial estates. It said the Investment Board Nepal (IBN) should also be restructured in such a way that it incorporates the use of technology. CNI is of the view that the IBN should be strengthened as it has not been able to function at an optimum level, Mishra said.
The confederation has recommended converting the spaces used by former Maoist combatants into industrial estates. The government is also working to build industrial zones or special economic zones in Nawalparasi, Dang, Surkhet and Kailali where the cantonments were located. There has not been expansion of industrial estates since the establishment of the Rajbiraj industrial zone in 1988.
CNI has said the budget should focus on converting the imports-based economy to an economy based on production. It also sought continuation of the provision of purchasing locally-manufactured goods by the government even if the goods are expensive by up to 15 percent compared to imported ones.
The confederation has urged the government to create a taxpayer-friendly environment, by eliminating the VAT threshold, introducing a multi-VAT provision based on the product type, and allowing payment of tax from any banks. Currently, only stated-owned banks and a few private sector banks are allowed to collect government revenues. Terming energy “backbone” of economic development, CNI asked the government to provide Rs 20 million subsidy on 1MW electricity generated, and make hydropower projects free of taxes for the next 10 years.
It also proposed a provision of providing electricity to industries by developing a separate grid. “The budget should provision 50 percent subsidy to industries for setting up alternative energy sources,” it said.
It has asked for the implementation of the Industrial Policy 2067 to ensure safety of investment. It said acts like Industrial Enterprises Act, Labour Act, Special Economic Zone Act, Foreign Investment and Technology Transfer Act, Negotiable Instruments Act and Intellectual Property Act should be introduced.
Published: 06-06-2014 09:24