Koshi Province Industrialists React Positively to New Budget

Biratnagar. Koshi Province industrialists have given a positive reaction, stating that the upcoming fiscal year's budget brought by the government has attempted to boost the morale of the sluggish private sector. Especially, the difference in customs rates for industrial raw materials and finished goods, reforms in the tax system, and policies to encourage startups have instilled hope among industrialists.

The government's Finance Minister Swarnim Wagle presented a budget of Rs 21 kharba 24 arba 34 crore for the upcoming fiscal year 2083/84 in a joint meeting of both houses on Friday. Out of the total allocation, Rs 12 kharba 70 arba 58 crore (59.8%) is for current expenditure, Rs 4 kharba 31 arba 10 crore (20.3%) for capital expenditure, and Rs 4 kharba 22 arba 24 crore (19.9%) for financial management. 

The government has set a target to collect Rs 14 kharba 5 arba 31 crore from revenue and Rs 61 arba 74 crore from foreign grants as sources to finance the upcoming year's budget. From the remaining amount, Rs 2 kharba 47 arba will be raised from foreign loans and Rs 4 kharba 19 arba from internal loans. In the current fiscal year, the government had allocated a budget of Rs 19 kharba 64 arba 11 crore. The upcoming year's budget is 25% higher than the estimated expenditure of the current fiscal year.

Reacting to the budget, Nepal Chamber of Commerce, Koshi Province Chairman Rajendra Raut said that the government has brought a change in its approach towards the private sector. While reacting to the budget, he said, 'We are excited by the provisions made for the private sector, new ventures, and industrial development in the presented budget.' Raut expressed happiness that the budget considers the private sector not just as a means of revenue collection but as a partner in development. He said, 'The budget appears to be an effort to resolve past uncertainties by accepting the private sector not just as a means of tax collection but as a complementary partner in economic prosperity.'

Raut also considers industrial security and policy stability as important. He said, 'The commitment to maintain policy stability by stopping frequent changes in the tax system and guaranteeing the security of private property to increase investor confidence is welcome.' Regarding the removal of legal hassles, he commented, 'The announcement to simplify and make transparent the legal and administrative processes from industry establishment to exit (exit policy) will improve the investment environment.' He said that the announcement to protect domestic products and small and medium-sized industries and to end syndicates and cartels will increase healthy competition in the market.

Private sector expert and industrialist Avinash Bohara, analyzing the technical and practical aspects of the budget, has termed it a refined budget. 'This time, the government appears to have presented the budget in a very refined and result-oriented manner, from its presentation to its management,' Bohara said. 

Bohara considers the production-oriented thinking as the strongest aspect of the budget. 'It is a very positive aspect that the idea that production drives the economy and creates employment has been included in the first point of the budget,' Bohara said, 'The provision of a difference in customs rates for industrial raw materials and finished goods will provide relief to domestic industries.'

He stated that the provision of capital gains tax being considered final tax and the facilitation of repatriating returns on foreign investment will boost the investment sector. 'In the current situation, there is a lot of focus on IT and AI, which is also the demand and need of the present time,' Bohara said. 

However, he expressed skepticism about the size of the budget and the revenue collection target. He called the target of collecting Rs 14 kharba in revenue challenging. 'Collecting Rs 14 kharba in revenue in the current economic structure is hugely challenging, it is not as easy as it seems,' he said. Bohara claims that it will be like chewing a hard nut for the government to achieve 7% economic growth and maintain 6% inflation.