Business community tell govt what to do

By A Staff Reporter

KATHMANDU, Oct. 29: The business community has prepared a list of suggestions for the government to deal with issues, it says, are long overdue.

The business people see a bleak future for the economy if the decline of the economic indicators is not checked. The country's GDP per capita is down by about US$ 4, and for the first time in decades, the country's exports declined last year.

The community has identified five core areas - security at business places and security at large; revenue law, policy and administration; an appellate body for hearing; labour laws and policies; and corruption - that need to be addressed immediately by the government.

These recommendations, says Rajendra Khetan - First Vice President of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI) and President of Nepal Britain Chamber of Commerce and Industry (NBCCI) - will be presented to the government for consideration and immediate implementation.

For security in business places, it has suggested forming an industrial security force. Such a force should be allowed to take action for the security of the industrial establishments, and their actions should be considered as good as those taken by the security apparatus of the government, said Khetan talking to The Rising Nepal. "The creation of such an industrial security force has already been approved by the cabinet," he said.

On revenue, Khetan said that failure to harmonise our revenue mechanism with that of the fast changing international system will put us in bad shape. Such a system has been brought forward, but the bureaucracy, government mechanism, policy and administration continue to remain traditional and even obsolete, he said.

Khetan cites the need for labour laws and policies that work equally for the employees as well as for the employers. "We want equal rights and a code of conduct for both the employees and employers."
One of the complaints about the present labour laws and policies is that it does not give the employers enough authority to take action for misconduct of the employees because there is always a labour union that is almost always biased towards the employees.

"The policy should also open up new areas for employment generation that are seasonal, part time, contractual, weekly or hourly that are paid a little higher remuneration," said Khetan. One problem the employers face is that the labour unions are always demanding that the employees be made permanent. The law has also made it virtually impossible to lay off the workers even if the industry is running at a loss.

But the business community's major focus, says Khetan, is on establishing an appellate body to look into the problems faced by the business sector. "This would give us a second option before going to court for abuse of authority; for not implementing the laws and policies honestly; for dwelling on the dual meaning of the laws, and for political intervention."

This is also expected to be an effective instrument in fighting corruption. "At present, if there is any dispute with the officials, we have no option but to go to court, which takes between three to 12 years before the issue is settled."

The business community says corruption in the government and the bureaucracy has taken its toll of the country's economic sector. Khetan cited four major places where corruption is rampant - revenue administration, public commercial banks, government procurement departments and public service delivery utilities.

He wants representatives of autonomous bodies like the Public Accounts Committee of the parliament, Auditor General's Office, Commission for Investigation of the Abuse of Authority (CIAA), or Transparency International to be stationed in those sectors to guarantee that things go smoothly.

He said that the dual meaning of the laws and policies means that you must bribe the officials if you want your work done. "It is not that we want to give bribes and kickbacks, we are forced to."

He also admitted that there were unscrupulous people in the business community trying to gain advantage of the situation. "That is why the FNCCI has just started a cell called a business ethics forum, which will work to develop a code of conduct for the businesspersons, expose the issues of corruption, and help bring change in the laws and policies to make them corruption free." He also said that the business community was willing to isolate and withdraw support and cooperation to the black sheep among them.

The suggestions have raised points that relate to making the revenue advisory committee permanent, empowering it and amending the Income Tax Act 2058, which, Khetan says, has created more problems than it has solved.

The business community is also demanding the abolition of income tax on exports so as to provide incentives for exports, both short-term and long-term policy to utilise the liquidity in the banks and the financial institutions, adoption of a process for tax returns at a flat rate and austerity in government expenditure.

The recommendations to the government also include the formation of an autonomous board of investment (BOI) to address the current industrial problems.

Khetan says the Prime Minister should nominate three persons to the BOI, of whom at least one should be from the bi-national chamber of commerce and industry. The body should comprise ideally of the Minister of Industries, Commerce and Supplies as coordinator, with the Minister of Finance, President of the FNCCI and nominee from the bi-national chamber of commerce and industries as members. Secretary at the Ministry of Industries, Commerce and Supplies will be the member secretary.

The recommendations to the government also include suggestions to support the manufacturing industries and the tourism sector.

This is not the first time that the business sector has presented suggestions and recommendations, but they have received only lip service.

Khetan blames the divided politics, weak bureaucracy and the lack of advocacy and lobbying for the government turning a deaf ear to those suggestions.

He said the bureaucracy was characterised by political domination, poor standards and performance of bureaucratic officials and vested interest that gives more importance to money.

The suggestions presented by Dr. Shanker Sharma, former member of the National Planning Commission, in his report for administrative reforms could be a good way to start reforming the bureaucracy so as to make them accountable. "Here, too, an appellate body, where people can go and complain if things do not go smoothly, would be useful to keep the bureaucracy on its toes," says Khetan.

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