Historic Business Strike!
Despite criticisms from all quarters, businesses all across the country defied a court order and closed down for on October 17 responding to a call from FNCCI, the apex chamber, and making history.
Similar strikes were held only three times so far, according to some old generation businessmen - the first being some 47 years ago opposing the introduction of income tax and the second, some 38 years ago, opposing the introduction of sales tax. The most recent other such strike was seven years ago opposing the introduction of VAT.
Though the previous business strikes were not successful in their objective, this time it has been kind of successful. However, FNCCI President Chandi Dhakal has been keeping dates with the Patan Appellate Court responding to a contempt-of-court case.
The major demand of the protesting businessmen was extension of the time for the bank loan defaulters till mid-January to adjust their accounts with the banks. Though the time set by the government expired on September 10, this demand of FNCCI seems to be fulfilled as the necessary legal arrangement for the actions against the defaulters are just approved by the Parliament and its implementation is not likely to start before mid-January as the final preparations are still underway. Immediately after the business strike, the government formed a cell in the Ministry of Finance to hear the complaints of the businesses and find amicable solution to this problem.
Meanwhile, another demand that the right of the chambers of commerce to issue recommendation letters for registering new businesses in their respective locality be restored has been fulfilled. The decision to this effect was taken by the Ministry of Industry in October-end reversing its earlier decision that had scrapped this right of the chambers. However, the ministry has capped the recommendation fee at Rs. 100 for new firm registration. Earlier the chambers used to charge as much as Rs. 650.
Among the other demands for which the FNCCI is still pushing ahead is bringing an end to two Maoist drives - donation collection from businesses and intimidation to the factory workers to join the Maoist trade union. Both are expected to be fulfilled now as the peace negotiations between the Maoists and the government have been successful.
Also fulfilled is the demand to stop the syndicate system in transport services. The government has recently issued directives to the local authorities to take actions against the transport operators if they are found forming monopoly in such services.
Economy Booming
If the revenue collection is any guide, the country's economic activities are booming. According to the Finance Ministry, the revenue collection during the first three months of the current fiscal year was higher by 26 per cent as compared to the same period last year. The targeted growth rate for the current fiscal year in revenue collection is only 18 per cent. Ministry officials claim, the first quarter trend is maintained also in the first half of the fourth month
The officials also claim that the revenue collection would have been even higher if the Maoists had not posed hurdles in the work of the revenue collectors in various localities. If that is the case, the growth rate in revenue collection is likely to increase in the coming months after the Maoists are inducted into the government, which is likely in the near future given the latest successful completion of the peace negotiations with the Maoists.
Earlier, the Asian Development Bank had, in its updated Asian Development Outlook report, forecast a 4 per cent growth in Nepal 's GDP during this year. While presenting the budget for the fiscal year in July, the finance minister had targeted 5 per cent growth this year whereas it was estimated to be 2.3 per cent in the fiscal year that ended in mid-July 2006. The Central Bureau of Statistics officials say that even 5 per cent growth was likely this year had the weather been favourable during the sowing season for the main crop paddy. "However, as we can see that the manufacturing and services sectors are doing well, 4 per cent growth is not unlikely," one CBS official said.
Company Act Amended
The Parliament has approved the new Company Act by amending some provisions of the erstwhile Company Ordinance.
Among the changes is the removal of the impractical provision that required the company to allot the shares two times and relieving the private companies from the obligation of submitting some of the documents that are necessary only in case of public companies to the Company Registrar.
Similarly, the new Act has also reduced the amount of the penalty for some offences under Article 81. Now the penalty amount is up to Rs. 10,000 in case of failure to submit serious information and only Rs. 1,000 in case of minor information.
However, the amendments demanded by the chartered accountants has not been incorporated. They had demanded for easing of the restriction on the reappointment of an auditor by a company more than three times in a row.
Policy for Commercialising Agriculture
Ministry of Agriculture and Cooperatives has drafted a new policy to attract business firms to invest in agriculture.
According to sources at the Ministry, the policy draft submitted to the Council of Ministers has provisions to provide 25 percent rebate on power tariff for 10 years for cold storage, agricultural wholesale market and slaughter house. Similarly, it promises 50 percent rebate on the customs duty for 10 years on import of equipment such as chilling vans and milk processor.
Among the other provision, the proposal policy says 20 percent of the local tax collected from agricultural market place will be used for the improvement of the same marketplace and arrangement will be made to provide bank loan against the security of the agricultural project without additional collateral.
