Print Edition - 2015-07-08 | MONEY
CNI seeks aid for new industries
Jul 7, 2015-
The Confederation of Nepalese Industries (CNI) has asked the government to provide grants amounting to 25 percent of the fixed capital to new industrial enterprises that are set up during the next five years. The association has also requested the government to fix the amount to determine the eligibility of new companies to receive the grant funds.
Presenting its demand to the Ministry of Finance on Tuesday, the CNI has also sought a 25 percent one-time grant for industrial enterprises that are established in new industrial estates during the next 10 years.
“The upcoming budget should be able to address the issues and challenges of the private sector,” said Narendra Basnyat, president of the CNI. He added that the budget should be export-oriented and able to look beyond collection of revenue.
Basnyat said that the private sector was ready to coordinate with the government for the post-earthquake reconstruction initiative, and added that a public-private partnership (PPP) model should be developed for effective implementation.
The CNI also repeated its demand for a 5 percent cut in corporate tax for five years to and a 2-3 percent cut in value added tax (VAT) for three years to help the private sector recover from the effects of the April 25 earthquake.
“Industrial contribution to the economy has shrunk to 6 percent from 12 percent. We are heading towards de-industrialization. This sector needs stimulus for growth,” said Hari Bhakta Sharma, senior vice-president of the CNI.
He added that the reduction in corporate tax would help the private sector offset the losses suffered during the earthquake while the reduction in VAT would help to boost consumption of products and services in the market.
Apart from this, the CNI has also asked the government to allocate a fund of Rs20 billion in the upcoming budget as a stimulus for the private sector. Likewise, the private sector body has also asked the government to allocate Rs500 million as seed money to establish a Business Recovery Centre to support business enterprises.
“We need a fund of Rs5 billion for this. Once the government initiates this with seed money, we will mobilize private sector resources to increase the fund,” said Sharma.
After listening to the CNI’s demands, Finance Minister Ram Sharan Mahat said that the government would try to address most of the issues raised by the private sector.
“We are committed to economic betterment. However, there is a limit to what the government can do,” Mahat said. Stating that the reconstruction initiative would help the economy to some extent, Mahat urged the private sector to reap the benefits. “While there are challenges, there are possibilities too. The construction sector, in particular, will see a big boost.”
Published: 08-07-2015 08:02