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Monetary policy should address energy sector: stakeholders

Stakeholders called for reforms in policy, easy interest loans, and renewal of loans so that the entrepreneurs could pay the interest and installment of the loan.

KATHMANDU: The stakeholders have recommended introducing an economic policy that could revive the infrastructure sector as it is being adversely affected due to the COVID-19 outbreak. Taking part in a virtual dialogue organized by the Society of Economic Journalists Nepal (SEJON) here today, the stakeholders called for reforms in policy, easy interest loans, and renewal of loans so that the entrepreneurs could pay the interest and installment of the loan.

Entrepreneurs of energy-producing sectors stressed on addressing the problems of the energy sector through economic policy. They suggested extending the volume of renewal of loans with stable interest from banks and financial institutions. The monetary policy should attract foreign investment in the energy sector as it was nominal in volume. On the occasion, Finance Secretary Suman Prasad Sharma opined to review the interest rates in energy sectors. He pledged to address the energy sectors that have been severely impacted. Sharma also agreed in the proposal to attract foreign investment in the energy sector as capital to revive the sector is utmost and it could be addressed with the increased foreign investment. “A majority of the Indian laborers have returned home due to COVID-19 pandemic. There’s a slim chance of their return at this moment. Amid this, the monetary policy of Nepal should consider engaging the Nepali laborers returning from abroad and those at home rendered jobless in the physical infrastructure sector,” he suggested. Stating that around 80 percent of the development budget was occupied by a handful of construction entrepreneurs, he urged the government to ensure that more and more construction entrepreneurs get jobs proportionately. “Now is the opportune time.” “To create jobs at the local level, we have suggested the government to allow construction works with a budget up to Rs 50 million to be carried out at the local level,” he shared. Since the government has aimed to upgrade the country to mid-income country by 2030, it is imperative that the physical infrastructure is further strengthened, he emphasized. “Earlier we had undertaken works with a budget of Rs 8 billion in collaboration between the government and private sector.

It is estimated that Rs 3 billion of expenditure would incur this time,” he said urging the government to enable a favorable working environment in the physical infrastructure sector and change the perspective towards entrepreneurs. Energy entrepreneur Gyanendra Lal Pradhan viewed that the government should bring the policy which encourages optimum use of the energy generated in our country. He recommended that the monetary policy should consider providing grants at five percent interest and allow the signing of the power purchase agreement (PPE) for those Chinese and Indian investors willing to invest in the energy sector in their own currencies. He argued that if PPE was signed in Nepali currency, we could barely attract foreign investment in the country. Asserting that the monetary policy should play facilitating role in inviting foreign investment, he pressed for setting up hedging fund at the earliest, Computer Association of Nepal (CAAN)’s former Vice-President Sunaina Ghimire Pandey opined that the internet should be considered as a basic need and the waiving tax imposed on it should be considered. She further said, “Among the other South Asian countries, Nepal has imposed the highest royalty, additional charges are to be paid for VAT and purchase of internet wires. Internet should be made accessible to one and all by considering exemption of custom and tax.”

Furthermore, she underscored more investment in internet infrastructure, and cybersecurity-related issues should be incorporated in the monetary policy. “A high-powered mechanism should be made to invite more and more foreign investment in the information technology sector.”

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