Private sector seeks relief package from government

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Kathmandu, March 21

The private sector in the country has demanded that the government announce a relief package for them, stating that both industry and trade have suffered a huge setback due to coronavirus outbreak.

“The coronavirus has hit the entire economy of the country and we will face major losses. It is clear that no entrepreneur will be in a position to resume business without government support, especially the hotel industry and tourism sector,” said Bhawani Rana, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

“We have urged the government to provide relief to the private sector that has been badly affected by the virus. The government needs to announce tax break for this month (mid-March to mid-April), extend loan payback period and provide refinancing facility to revive industries,” Rana said.

She added that FNCCI will conduct a study on the exact losses faced by the private sector due to the coronavirus.

However, Rameshwor Khanal, former finance secretary, said no immediate effect has been seen yet as touted by the private sector and it does not need any support at the moment. “Our industries, which rely on imported raw materials, already have enough stock for at least six months. So, the coronavirus effect will not be seen before that,” he said. He, however, added that businesses in the service sector like aviation, hotels and travel industry are facing problems and their genuine concerns need to be addressed.

Khanal further said that the government needs to provide relief to affected businesses by extending the loan payback period, capitalising the loan as working capital and providing discount or exemption on taxes for a certain period of time.

Meanwhile, he stated that daily wage labourers will be massively hit and it has already started being witnessed. The local government, especially in urban areas, in coordination with the federal government needs to provide basic essentials to the needy. “Local bodies need to build shelters and provide food to daily wage workers until the situation normalises,” Khanal said.

Bishow Poudel, an economist, said, there is no need to provide blanket relief package to the entire private sector. “In the initial phase, the coronavirus has hit the service sector and as well as small and medium enterprises (SMEs).”

Poudel has suggested the government to provide tax and loan relief packages to SMEs for at least three months so that they can revive their business in a smooth manner when the situation settles down. “I don’t think the government needs to provide any relief package immediately to the private sector.”

He further said the government does not have to provide any relief to large businesses that have substantial transactions and incomes. “The government needs to categorise those who genuinely need the relief package.”

The best way that the government could resolve the economic problems created by the coronavirus pandemic is to control and minimise unnecessary expenses and be accountable to the public, he added.

Meanwhile, the government is preparing to announce a relief package for certain sectors badly affected by virus. The Ministry of Finance has said that it is carrying out an impact assessment of the virus on different sectors.

In his address to the nation on Friday, Prime Minister KP Sharma Oli had announced the government would provide necessary relief package to those badly affected by the coronavirus.

Additionally, on March 12, Finance Minister Yubaraj Khatiwada had also stated that the coronavirus impact on the economy would be temporary and all affected sectors, including tourism, would start reviving soon. However, he had vowed to introduce relief packages in the near future addressing the key concerns of the entire private sector. “The government is considering renewal of loan, restructuring of loan, extension of time to pay tax among other measures to provide relief to the affected sectors.”

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Written by Madhavi Marasini
This news first appeared on https://thehimalayantimes.com/business/private-sector-seeks-relief-package-from-government/ under the title “Private sector seeks relief package from government”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.