After 18 years of involvement with Nepal Chamber of Commerce (NCC), Suresh Basnet was recently elected as the president of NCC. The chairperson of Basnyat Company Limited, proprietor of Sujit Concern & Brothers, proprietor of Om Shanti Pashmina Udyog and director of Jal Pure Drinking Water is also engaged in other industries like cotton, textile, and handicrafts.
He spoke to Prakriti Pathak of THT Perspectives about the current economic scenario and his vision for taking NCC to new heights. Excerpts:
What are the challenges facing the industrial sector at the moment?
Since Nepal is in a trans-itional phase, the economy has witnessed severe setbacks. The challenges are political in-
stability, labour dispute, never-ending power crisis, unreasonable demands for donations, to name a few. However, lack of
security is the biggest hurdle we need to overcome at the moment. The importance of this has been reiterated in recent weeks with a couple of incidents in which businessmen were murdered. This shows how irresponsible the government and security system of the country is. It has also adversely affected the manufacturing industries and businessmen do not feel safe enough to invest or expand their business.
Recently there was labour dispute and industry was shutdown for more than a week, and the companies and the nation
as a whole had to incur huge losses because of it. What do you think would be required for a lasting solution?
Though labour dispute is not a big problem, political parties are using labourers as cadres and displaying the strength of their party through trade unions for their own vested interests. Trade unions are actually only making a mountain out of a molehill. Is it fair to shutdown industries just to make the labourers attend political parties’ programme? Such examples clearly show the motivation and interest of political parties. It seems that political parties do not understand the reality and problems of labourers and are just politicising the labour issue as a means to their own end. Had it not only been politicised, we could have come up with a quick and long lasting solution. The government should formulate strong policies and take steps as soon as the problems are identified rather than waiting to hold talks when things have blown out of proportion.
There is an ongoing discussion on which economic model to follow. Which one do you think will be appropriate for the country?
Economic experts have differing ideas. I feel some of them are even the mouthpiece of political parties and are led by their ideologies. For economic growth, we must ensure free economy and there is no other alternative to it. We must learn lessons from our two neighbouring countries — China and India, which are economically strong and free economies. The government needs to realise this and then play the role of facilitator and regulator. But the responsibility of leading the economy has to be left to the private sector.
What is your take on liquidity crunch?
The economy of the country is getting worse by the liquidity crunch. To overcome it, new systems need to be implemented and changes need to be made, like not making the disclosure of income source compulsory for transactions up to Rs 5 million. Similarly, there should be no
provision of capital gain tax up to Rs 10 million transactions and imposition of 0.5 per cent capital gain tax exceeding the amount.
There was much talk about fake VAT bills. What kind of support will NCC give to the government?
VAT defaulters have to be punished according to law, and for this we are ready to revoke the membership of businesses that are involved in the fake VAT bill scam. It is the responsibility of Inland Revenue Department (IRD) to investigate and punish the culprits. To tackle fake VAT bills, a transparent multi-VAT system must be formulated and implemented effectively. One of the reasons illegal trade is as large as legal trade is because of our porous border.
The industries are forced to donate to various entities and there is no provision of showing this donation anywhere. To recover this amount, the industrialists are in the practice of presenting fake VAT bills. If there is a provision of showing these donations on paper, then the practice of fake VAT bills may be reduced.
What will be the solutions to overcome these problems?
Firstly, there should be political stability, concrete progress in the peace process and if possible, the constitution should be
completed by the stipulated time. An efficient law and order situation in the country depends on all these factors. The government is also equally responsible for an economic revolution, but right now all the focus is concentrated on vying for power.
What are your plans for NCC in the coming year?
NCC will put more emphasis on facilitating and encouraging sectors that will generate employment like cash crops, agriculture, hydropower, irrigation and non-timber products. We are willing to support and coordinate with the government regarding new policies and upcoming budget. We will hold talks with Nepal Association of Foreign Employment Agencies to attract investment from NRNs and Nepali migrants working abroad in hydropower. This will be crucial, since we are planning to invest in generating 10 to 25 Megawatts of energy to help minimise the load-shedding, which will eventually assist in developing the businesses in the country.