Corporate Nepal hails the budget

THE budget for 2013-14, presented on time for the first time in two years, has cheered the entire business community, private sector representatives have said. They said that budget’s optimum focus on attracting big investments, expansion of industrial areas and commitment to resolving labour problems and creating business-friendly environment has further boosted their morale. On his post-budget comment, Bhaskar Raj Rajkarnikar, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said the announcement of a full budget this year itself is a big incentive for the private sector. “The budget’s optimum focus on infrastructure, tourism and agriculture is one of the positive aspects that the private sector had been expecting,” Rajkarnikar said. He said there is “nothing to gain and nothing to lose in the budget”. The budget has announced making the Investment Board more resourceful. It has placed the private sector as a major driving force to achieve economic goals. It has called the private sector to jointly work on the areas of infrastructure development by increasing their investment. The budget has announced special incentives to export-based industries. It has pledged formulating necessary legal provisions for the development and utilisation of special economic zones (SEZ) to boost trade. “Through the budget, we had expected an export incentive, particularly on exports to India,” said industrialist Manish Kumar Agrawal. “At a time when alarming imports have become a major concern to the government, the government should have announced special incentive on exports.”However, the increase in the incentive on exports to countries other than India can be termed a positive move, he said, adding the government has increased export incentives to Rs 30 million from Rs 25 million. The government has planned to bring into operation the SEZ in Bhairahawa in the next fiscal year. Plans like developing infrastructure in Panchkhaal, Biratnagar and Simara; feasibility study of developing industrial estate in Nawalparasi, Kailali, Dang and Surkhet; and conducting detailed study of Tinau project have been initiated. The budget has also promised to address hurdles to the development of the industrial sector. Finance Minister Shankar Koirala said the government is committed to supply power to industrial zones by making a specific power supply schedule. The government is also committed to attract investment by simplifying legal and procedural hurdles, Koirala said. “To encourage more investment, the government has announced the Prime Minister Entrepreneur Award to investors investing more than Rs 1 billion,” Koirala said in his budget presentation. To uplift the industrial sector, the government will formulate a new the Industrial Enterprises Act and amend the existing Company Act and Foreign Investment and Technology Transfer Act. To ensure skill development of the people from economically backward, deprived and marginalised community, the government will extend Micro Enterprise Development Programme (MEDP) to five more districts. Currently, the programme is implemented in 45 districts. Exploration of minerals, uranium, precious stones and petroleum will be continued, while test production of electricity from natural gas will be carried out in Kathmandu. The budget has allocated Rs 1.23 billion for extending road network, electricity lines and sub-station to cement industries. The government aims to make available road access to at least five cement industries in the next fiscal year. Sensing the need of an international-standard exhibition centre in Kathmandu, the government plans to allocate a space in Chobhar for this purpose. The government has also allocated budget for developing Nepal Industrial Centre for Excellence in Kathmandu in collaboration with the private sector. “The agenda of setting up Excellence Centre was demanded by the private sector. This is a positive sign,” said Hari Bhakta Sharma, senior vice president of Confederation of Nepalese Industries (CNI). However, the most unpleasant part is only 16- 17 percent of the total budget has been allocated for capital expenditure, Sharma said, adding it should have been at least 30-35 percent. The budget has announced development of Cottage Industry Exhibition and Auction Point in Kathmandu. Also, the government has unveiled a plan to construct SAARC Handicraft and Design Centre and establish Handicraft Village and Collection Centre in five development regions. The budget’s focus on infrastructure, tourism and agriculture was what the private sector had expected