Biz community to press for budget

KATHMANDU, Nov 9: As unwanted delay over the announcement of full-fledged budget threaten to dampen the country´s economic prospect, leaders of apex business bodies said Monday that they were mulling over launching a campaign to pressurize the parties to come to an understanding soon.



“We have had enough fiasco over the budget. If the parties did not act sensibly within few days, we will take to the street to exert pressure,” said Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI).[break]



Talking to Republica, the business leaders lamented that the long-running fiasco over budget has badly eroded confidence in the business community. While it has created confusion over government policies related to investment promotion, it has also raised question over predictability of taxation.



“Failure to announce budget is not only an economic crime but also a severe social injustice,” said Binod Kumar Chaudhary, president of Confederation of Nepalese Industries (CNI). He said the CNI would wait for the parties to come into understanding within the next few days. “If that did not happen, we will take steps to exert pressure for the parties to act prudently,” Chaudhary said.



Surendra Bir Malakar, president of Nepal Chamber of Commerce (NCC), said the parties had pushed the crucial economic agenda on the sideline in order to bargain for their political might. “If they did not correct their position, we will also appeal the people to join us in the street to build public pressure,” he added.



The business leaders noted that they were irked with the parties mainly for not being sensitive to the need of the industries and commerce. And it has not just immediate impact.



“The country is in dire need of power and we urgently need government´s plan on how it will address this constraint in the immediate and longer term,” said Joshi.



“The incentives the government promised in the industrial policy too has not come into implementation. That has raised question over the effectiveness of the policy itself.”



Likewise, downturn export sector too is direly awaiting special incentives and reforms in labor law and trade unions´ behavior. The government had promised special package in this connection a few months ago. However, confusion over budget has pushed the much-touted package to revive industries and exports in limbo.



“This is very pathetic situation. And it could turn worse given the bleak macro-economic outlook we are already in,” said Joshi, referring to re-emergence of balance of payment deficit and declining service income.



Bankers too cautioned that the banking sector could face the immediate impact of the long-running confusion as it has yet again weakened people´s confidence in the system.



“The banking sector is in serious need of liquidity and that will not happen if people´s confidence continues to deteriorate,” said Sashin Joshi, president of Nepal Bankers´ Association.



Still more, it is very important for the government to spend money that it has siphoned in its treasury in the form of revenue. In the absence of budget, the government has not been able to invest biggest chunk of some Rs 106 billion that it had earmarked for different development projects for this fiscal year.



“This lack of government spending has hindered natural flow of money in the market. If the situation continued, contractors and builders might default payment of principal and interest. This could have multiplier adverse impact,” Joshi said.

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