NCC President Malla calls for investment-friendly environment
KATHMANDU: Nepal Chamber of Commerce (NCC) President Rajendra Malla has identified the lack of an investment-friendly environment as the main challenge to the nation's economy. He voiced concerns that despite the presence of liquidity and investable funds, businesses are not thriving due to a lack of investment opportunities.
Speaking at the General Assembly of National Business Association, Malla revealed that nearly Rs 500 billion of investable funds are idle in banks and financial institutions (BFIs), as the government has been unable to capitalise on these resources. He stressed that an investment-friendly environment is yet to be established.
Malla suggested that if the government could utilise its capital expenditure as planned, it would lead to a sustainable economy. He noted that high interest rates in BFIs have deterred investment. While there are signs of improvement in the external aspects of the economy, he stressed that the internal aspects have not seen similar progress. He proposed a review of the economic and fiscal policies to optimise capital utilisation.
The NCC President also recommended the introduction of a timetable to ensure timely capital expenditure. He said, "Even after seven months into the current fiscal year, development expenditure is limited to 21%. The practice of proposing an ambitious budget at the outset and then amending it if the capital expenditure cannot be achieved on time should be abolished."
Moreover, Malla urged Nepal Rastra Bank to implement a fiscal policy that would extend loans to small and medium enterprises. He highlighted the trade deficit of Rs 693 billion in the current fiscal year, attributing it to a lack of internal production. "To reduce the existing trade deficit, it is necessary to adopt a fiscal policy that promotes investment in sectors such as agriculture, energy, tourism, and information technology," he added.
Finally, Malla expressed that increasing investment in the productive sector could help control the unemployment rate to some extent.
