FNCCI submits recommendations on upcoming government's policies and programmes

KATHMANDU, MARCH 20: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has submitted a set of suggestions to the government regarding the policies and programmes for the upcoming fiscal year 2025/26.

FNCCI President Chandra Prasad Dhakal presented them to Minister for Industry, Commerce, and Supplies Damodar Bhandari on Wednesday. While acknowledging the recent legal revisions made by the government, President Dhakal emphasized the importance of formulating the necessary regulations and procedures for their enforcement at all levels.

"The policy revisions have conveyed a positive message," he said. "However, effective implementation requires assurances that regulations will be enforced from all sides."

The FNCCI has recommended leveraging technology for business registration, renewal, revenue payments, and cancellations.

It also suggested that the upcoming fiscal year's policies and programmes of the government include provisions for offering all business services via the "Citizen App," incorporating a business icon.

Furthermore, the Federation  recommended streamlining government services under the name "Smart Services."

Acknowledging that foreign investment has remained limited to just 0.2 percent of GDP over the past two years, FNCCI proposed the launch of  a national campaign "Invest in Nepal" to be conducted both domestically and internationally to attract additional investment.

The FNCCI also suggested that the Investment Board and the Department of Industry be merged and restructured for better efficiency.

Regarding the "One Stop Center," FNCCI emphasized the need for arrangements ensuring that investors do not need to visit multiple offices after submitting their documents in one place.

The Federation also proposed the creation of an integrated legal code, rather than annually changing revenue-related laws, which should be passed by the Parliament. This approach is expected to reduce the arbitrariness in budget implementation and maintain policy stability.

FNCCI believes that ensuring business facilities provided by various laws will encourage investment in the country.

In its submission, FNCCI noted that more than 600 billion rupees have accumulated in Nepal's banking system over the last six months, with interest rates having dropped by three percentage points in the last three months. However, FNCCI pointed out that there is still little demand for investment.

The FNCCI expressed concerns that the capital loan guidelines introduced by the central bank two years ago were the first policies to discourage loans. "These guidelines, while necessary at the time, need to be revised, especially given the current market despair," said FNCCI. "The guidelines should be suspended for at least two years or made more flexible, allowing banks and borrowers to make decisions independently."

Additionally, FNCCI suggested that refinancing and other facilities be made available to small and medium entrepreneurs to ensure smooth fund flow, addressing challenges in cooperatives and microfinance.

The Federation also highlighted the importance of remittances as the lifeline of Nepal's economy and suggested increasing tourism and exports to counter the reduced demand in the domestic market.

Regarding exports, FNCCI stressed the need for policy and program support to facilitate the export of Nepalese agricultural products and water to Gulf countries. Given that approximately 12 flights depart from Nepal to the Middle East daily, FNCCI proposed the establishment of cold storage, X-ray machines, and warehouse facilities at airports to facilitate the export of Nepali products.

The Federation also demanded the introduction of loan facilities up to 10 million rupees based on project collateral, with the risks shared between business houses, Credit Guarantee Corporation, government, and development partners.

FNCCI further suggested extending support to entrepreneurs through initiatives like Startup Nepal, the Small Entrepreneur Development Program, and Technology for Prosperity programs.

To attract Indian tourists and investment, FNCCI recommended offering facilities for the establishment of hotels, resorts, polytechnic institutes, educational institutions, and teaching hospitals near hill stations close to the Indian border.

FNCCI also suggested arrangements for supplying electricity as a raw material for industries and eliminating load shedding in industrial areas.

Lastly, the apex body of Nepalese business fraternities called for the immediate formation of a task force, with private sector participation, to prepare for the transition to a multi-rate Value Added Tax (VAT) system. This transition is expected to require comprehensive managerial arrangements, including widespread tax awareness, skilled manpower, and systemic infrastructure development.