With high expectations, private sector awaits pro-growth budget
Jul 12, 2014-
The government is presenting the budget for the fiscal year 2014-15 at Parliament on Sunday. Expectations are high from this budget as it is being presented by the government that was formed after the second Constituent Assembly (CA) election. With Finance Minister Ram Sharan Mahat vowing to initiate the second tier economic reforms through the budget, the private sector has become very optimistic about it. The Kathmandu Post caught up with the cross-section of the private sector to talk about their expectations from the new budget. Excerpts:
Vice President, FNCCI
In my opinion, the budget should be able to boost investors’ confidence. Due to lack of confidence, investors are only willing to invest in the sectors that require short-term investments. The recently unveiled economic survey too paints a bleak picture of the country’s industrial sector, with a dismal growth rate. In fact, the manufacturing sector has been witnessing a negative growth in the past few years. The budget should accord top priority to the energy sector In a bid to give a leg up to the industrial sector and shift focus of the private sector towards it. Another crucial factor to be emphasised by the budget is infrastructure. The inadequate energy and infrastructure adds up to the cost of domestically manufactured products, making them incompetitive against the imported products. Likewise, the budget should also prioritise those sectors that can generate more job opportunities. We have suggested the government to take necessary measures to address the labour issues at industries and about job creation and I am hopeful that these suggestions would be incorporated. Likewise, the government should change its perception towards the automobile sector through this year’s budget as the sector is being heavily taxed.
Hari Bhakta Sharma
Hari Bhakta Sharma
Vice President, CNI
The new budget should take a big shift and come up with ways to change our economy from import-based into production-based. For doing so, the government should prioritise the manufacturing sector. The budget should create conducive environment for the manufacturing sector and stimulus package should be announced for the private sector engaged in the manufacturing sector. The budget should be allocated properly. Since we have a huge demand for power, the government should allocate abundant amount of budget for the development of hydropower projects. The budget should also resolve the problems facing the private sector engaged in the hydropower development. Infrastructure development is another important sector. Sizable amount of resources should be allocated to the national priority projects. The govenrment should take a leaf out of the recently announced Indian budget which has largely promoted the private sector. Nepal has a potential to compete in some of the pharmaceutical products. The government should promote such sector with proper plans and polices. We are importing even those products that can be manufactured in Nepal itself.
Managing Director, Nimbus
The budget being tabled so far seems to be distributive and small amount are distributed in several sectors. The government should leave this tendency from this new budget. Rather than being distributive, the government should identify core areas and distribute the budget accordingly with proper policies and programmes. If the budget is concentrated in a few areas, not only will it help the government increase its spending capability but will also show a direction for the private sector to shift its focus. The government is talking about prioritising energy, agriculture, tourism and infrastructure sectors. But I feel there is a need for further segregation of priorities within these sectors. Time has come for the government to think about agriculture in a new way. As of now our agro products are either consumed domestically or it is exported without any value addition in the process. The government should offer some incentive to the private sector to improve on this matter. Priority should be given to cultivation of paddy, maize, wheat, among others, which have a significant contribution in the country’s economy. Development of proper market management mechanism and supply chain management are other aspects that the budget should lay its emphasis on.
Khadga Bahadur Bisht
The budget should concentrate on certain sectors rather than being distributive. As we have a coalition government, it might be difficult to do so but the government’s priority should be specific. Development of hydropower has been already established as fundamentals of the country’s economic development and prosperity. Hence, the budget should allot abundant resource in the development of transmission lines and Budhi Gandaki Hydropower project which is a storage-type project being initiated by the government itself. Butwal-Gorakhpur transmission line should be prioritised. Developers should be provided with some shorts of VAT and TAX subsidies while importing the construction materials and developing hydro projects. We are quite optimistic that the government will endorse it. Likewise, works in Marsyangdi, Kali Gandaki and Koshi corridor should be taken ahead. There have been a lot of talks on the development of solar power plants to meet the country’s energy requirement. Development of solar energy might be a good concept for rural areas and for meeting household demands even in urban areas. However, since hydropower in itself is a clean energy and has immense potentiality, the major focus should be on hydropower development.
CEO, Himalayan Bank Limited
The new budget must be development oriented. It is necessary for the banking sector too as only development activities will pave the way for excess liquidity with bank to flow out. There should be more capital budget to spend on, which will increase economic activities and help the banks to increase their lending. The budget’s supposed priority to infrastructure and agriculture is welcome. Boom in infrastructure investment leads to the growth in construction activities which will in turn help the banks to lend out more money. On the other hand, we also want the income tax being imposed on the banking sector to be lowered to 25 percent.With the banks being forced to bring down their spread rate in interest rates of deposit and credit to three percent, the government can do justice to them by bringing down tax rate. We also expect some incentives in tax for the banks and financial institutions to encourage mergers.
Published: 13-07-2014 09:51