The budget for the next fiscal year presented by Finance Minister Yubaraj Khatiwada on Wednesday received mixed reactions from the private sector.
The Rs 1.53 trillion financial plan bets on achieving economic growth of 8.5 percent and envisions generating half a million jobs by the next fiscal year, which begins in mid-July.
The budget has mentioned the tourism sector as a major contributor to economic growth, employment and foreign exchange earnings, but it has failed to allocate budget and bring programmes targeting the Visit Nepal 2020 campaign that aims to attract 2 million visitors, the Hotel Association of Nepal said.
The association has welcomed government’s decision to managing the congestion at country’s sole international airport in Kathmandu and completing two international airports in Pokhara and Bhairahawa in time.
The budget has targeted to achieve 8.5 percent economic growth but without making favourable business climate, the growth is unlikely, it said. The association has also expressed concern over high interest rates charged by the banks.
Around 26.6 percent of the budget has been allocated for capital expenditure but poor spending record has resulted in liquidity crunch and higher interest rates, the association said.
“Overall the budget is positive, but if it is not implemented in an effective way it will impact the economy,” Nepal Chamber of Commerce said in a press statement.
The increased investment in infrastructure and social sector including the agriculture would drive demand leading to favourable economic growth, the Confederation of Nepalese Industries said.
It welcomed the government’s move to introduce VAT refunds for general public two months earlier compared to previous provision and policies to encourage domestic production and industries.
“The overall budget is in line with the expectations of the private sector. Most of our suggestions have been incorporated,” it said in a press statement.
Meanwhile, business community from Dang, Rupandehi and Banke in Province 5 has given a mixed response to the budget, raising suspicions over its implementation.
“The budget has addressed the grievances of national level industries and business but we are more concerned about the implementation part,” said Khim Bahadur Hamal, chairman of Butwal chapter of Chamber of Commerce. “The budget allocated to provinces is not enough and it is sad that the government has failed to appropriate funds for development of the Motipur Economic Zone.”
According to Padam Prasad Shrestha, president of Rupandehi Merchant Association, the overall budget is balanced, but its effectiveness depends on the implementation part.
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