Kathmandu. KATHMANDU: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has suggested to Prime Minister Balen Shah that the role of the government should be that of a facilitator and coordinator rather than a regulator for the promotion of investment and economic development in the country. During the meeting with PM Shah at Singha Durbar on Wednesday, Chairman Shrestha underscored the need for a bold decision to break the cycle of protectionism, informal economy and administrative hassles to make economy dynamic again.

He urged the Prime Minister to move ahead collaborating with the private sector to translate into practice the concept of change, transformation, generational and handover forwarded by the government. Stating that the private sector which contributes 81 per cent to the country’s economy and 86 per cent to the job creation was facing serious challenge at present, he said low demand in market, sluggishness in investment and excessive regulatory pressure have weakened the morale of entrepreneurs.

On the occasion, Prime Minister Balendra Shah said the private sector has an important role to play in the economic development and prosperity of the country.

“During the meeting, we openly discussed with the Prime Minister about the problems of private sector, the present condition of the economy and the ways of resolving it. Stating that the government would take care of the infrastructure development and the economic development of the private sector would take care of it, Chairman Shrestha expressed commitment that the government was ready to facilitate it. He also said that such meetings will continue. The private sector has given it positively. ’

Stating that the government’s target of 7 per cent economic growth rate, per capita income to reach USD 3,000 in the next 5-7 years, to build a Rs 150 trillion economy and to create 1.2 million jobs was a welcome task, he said that there is a challenge to take the economy out of credit, liquidity and asset trap to meet these targets.

Stating that Nepal’s economy was becoming consumption-oriented instead of production-oriented and around 70 per cent dependency on imports was a matter of concern, he underscored the need of a policy to give priority to local production. He also suggested adopting separate policies by categorizing industries based on the use of raw materials as hundred percent domestic, mixed and imported industries and encouraging assembling and contract manufacturing.

The FNCCI has also urged the Prime Minister to bring the provisions of the Sunset Act, Debt Recovery Act and Intellectual Property Protection Act into implementation at the earliest. On the occasion, the federation drew the attention of the Prime Minister to bring a special restructuring and stimulus package for the revival of small, cottage and medium enterprises that have been in crisis.

The federation has suggested that the banks should fully comply with the limited liability provision in the Companies Act for the management of excess liquidity and increasing bad loans in the banking sector, expand the provision of soft loan and revive the sick industries through the Insolvency Act.

Likewise, the bank has also urged banks to review their watchlist, blacklist provisions and current capital loan guidance with the consensus between banks and customers and adopt a flexible policy on dividend distribution to increase liquidity flow in the market. Likewise, the federation has asked the Prime Minister to bring a policy of contract farming for the commercialization and mechanization of agriculture sector and develop the areas around Bheri-Babai, Sikta and Sunkoshi-Marin Diversion Project as agriculture pocket areas.

Likewise, the federation has also suggested the development and operation of special economic zones (SEZs), export promotion zones (EPZs), dry ports, exhibition centres, tunnels and road infrastructures and construction of exhibition halls in the districts with potential for tourists.

The FNCCI has expressed its disagreement over the provision of submitting property details to the representatives of the private sector who participate as institutional representation in government boards and committees. On the occasion, Chairman Shrestha said that it would not be justified to compel a person who is an institutional representative to submit personal property details as a person who serves as an Editor-in-Chief of the Board for a certain period is neither a government appointment nor an office of profit.

The FNCCI has suggested addressing the mistakes in the financial sector through fine rather than criminal cases, making arrangements for anticipatory bail and stopping the media trial by respecting personal privacy on the matters under investigation. Stating that Nepal’s tax-to-GDP ratio is the highest in South Asia, the FNCCI has proposed to implement a unified tax code by integrating the taxes at the federal, provincial and local levels to reduce business costs.

Shrestha also demanded special exemption on land ceiling for industries, simplification of Environmental Impact Assessment (EIA) and Preliminary Environmental Examination (IEE) process for ease of industrialization and immediate payment of export incentive allowance worth Rs 5 billion to exporters through tax or customs adjustment. On the occasion, President Shrestha urged the Prime Minister to immediately implement the recommendations of the Private Sector Protection and Promotion Strategy (PSPP) and the High Level Economic Reform Commission, which have been prepared at the initiative of the FNCCI and approved by the government.

Stating that the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) was always committed to working together with the government in the journey of economic development and prosperity of the country, he said that it was the main responsibility of the government to create an environment where the private sector could contribute.