‘The demand for goods and services in the market has sharply decreased’

KATHMANDU: Representatives of various business organizations have said that the demand for goods and services in the country has seen significant contraction over the past several months.

They urged the government and the Nepal Rastra Bank to take the necessary actions to help improve the demands for goods and services in the market when speaking at an interaction hosted by the Foundation for Parliamentary Studies and Development in the capital on Tuesday.

President of the Confederation of Nepalese Industries (CNI) Vishnu Kumar Agarwal said the revenue of the government cannot be increased unless the issue of private sector is effectively addressed. “Demand in the market is contracting. While the beverage and restaurant industries have seen demand declines of at least 30%, the automobile sector has seen contractions of up to 80%, according to Agrawal.

Agrawal went on to say that it’s critical to lower loan interest rates in order to help the economy bounce back. In addition, he warned that if the government doesn’t take any decisive action, the number of companies and individuals on the blacklist will grow even more.

According to Upendra Poudyal, the chairman of Nabil Bank, stable bureaucracy and policies are essential for raising capital expenditure. He suggested working to lessen the size of the nation’s informal sector economy while also stating that public asset monetization could be a source of government revenue.

Bijay Poudel, the leader of the CPN (Unified Socialist), stated that in order to rescue the nation from the economic crisis, the government must create short-, medium-, and long-term plans. “The agriculture sector should be our primary focus, regardless of what we have planned. We also need to work out a plan for paying taxes in installments, he added.

Entrepreneur Pawan Golyan proposed classifying loans into productive and unproductive sectors in order to lower the interest rate on loans. Golyan asserted that the market requires at least Rs 2 billion to improve the liquidity situation and that the government should seriously consider raising domestic production.

Speaking on the program, Dr. Govinda Raj Pokharel, a former vice chairman of the National Planning Commission (NCP), stated that the economic crisis is affecting almost all industries, especially those related to iron, steel, and cement. Dr. Pokharel argued that despite the fact that many people are still unable to obtain loans, drastic policy changes are necessary in order to create a more robust economy.

The country needs to implement policy reforms, according to economist Prof. Dr. Achyut Wagle. Dr. Wagle raised concerns about the issues in the microfinance industry while also questioning the justification for granting permission to operate it given that all local levels now have at least one branch of a commercial bank.

Maha Prasad Adhikari, the governor of the National Reserve Bank, claimed that despite the government’s budgetary deficit caused by low revenue collection, the nation’s economy is doing well overall. Despite claiming that the country’s external sector is in good shape as a result of an increase in remittances, he added that there is no reason to be alarmed about the country’s economic situation.