Industrialists have commented that although the system is private sector-friendly and tax reform-oriented, implementation may be weak and the goal is overly ambitious.
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Birgunj's industrialists and businessmen have given mixed reactions to the budget for the fiscal year 2083/84 announced by the government. Although some provisions to encourage private sector, reform the tax system and encourage investment are positive, they comment that the budget is overly ambitious and the implementation may be weak.
Birgunj Chamber of Commerce and Industry President Hari Gautam said that the budget's revenue and economic growth targets are not realistic. 'Revenue is not expected to rise as per the target, capital expenditure is also difficult to meet the target,' he said, 'Financial management expenses will increase, and foreign loans will not be received as per the target. In such a situation, 7 percent economic growth does not seem possible.'
Former president Subodh Kumar Gupta said that the budget has some important provisions to provide relief to the private sector. According to him, the personal income tax exemption limit has been increased to Rs 1 million, excise duty on 340 items has been removed, customs concessions on raw materials of 273 items have been provided and the tax rate has been reduced by 10 percent in the 39 percent tax slab.
He also described the removal of the provision related to Article 57 on family transfers, recognition of capital gains tax as a final tax for individuals, the provision for mortgage of leased land and mandatory salary payment through banks as reform-oriented steps.
According to Gupta, intraday trading, short selling, e-assessment scheme, full audit within three years and digital excise sticker system have also been seen as positive for capital market reform. 'There are signs that the government is trying to create an industry and business-friendly environment,' he said.
Ganesh Lath, former president of the Madhesh Chamber of Commerce and Industry, said that the budget has tried to restore the confidence of the private sector. According to him, the increase in the income tax exemption limit, the maximum income tax rate of 29 percent, customs and excise reforms, and the abolition of unnecessary government agencies are positive issues.
He also welcomed the issues of customs concessions on raw materials for industries, promotion of export-oriented industries, efforts to control smuggling, and prioritizing Nijgadh International Airport. 'The budget seems to be industry-friendly, technical, and has addressed minor problems that have been stuck for years,' he said.
However, he called the budget highly ambitious and said that the current international economic situation would add challenges to achieving the target.
Senior Vice President of Birgunj Chamber of Commerce and Industry Madhav Rajpal said that the increase in personal income tax exemption, the decision to remove excise duty, the arrangement to reduce tax rates, and customs concessions on raw materials were a relief for the industry sector. 'There is also talk of streamlining the Credit Act, which can help in fiscal discipline,' he said.
Former president of the Madhesh Chamber of Commerce and Industry Ashok Kumar Temani described the budget as a private sector, foreign investment, capital market and technology-friendly budget. According to him, the announcements related to LLP law, simplification of FDI process, intraday trading, derivatives, AI compute center, offshore bonds and energy trade can have a positive impact on the economy in the long term.
He also considered the 10-year tax exemption for the agro-processing industry, concessions for startups and IT sectors and the concept of Alternative Development Finance Fund as positive.
However, Temani warned that many budget announcements may be limited to paper if the implementation capacity is weak. 'Small investors may be at risk if arrangements like short selling and derivatives are implemented without preparation,' he said.
According to him, tax exemptions may put pressure on revenue, the risk of foreign exchange outflow may increase as foreign investment becomes easier, and the lack of skilled manpower may become a challenge in technology-oriented projects like AI.
Industrialists and businessmen conclude that although the budget is encouraging for the private sector, its success will depend on implementation capacity, administrative reforms, and political stability.
