400k lose jobs as economy bleedsTarai unrest forces 2,200 industries to down shutters: FNCCI
Around 2,200 factories have stopped operations and more than 400,000 people have been rendered jobless in the southern plains in the last five months, thanks to the prolonged Tarai unrest, the apex bodies of Nepal’s business community said on Tuesday.
The Tarai region is considered as the industrial heartland of Nepal, as 70 percent of manufacturing factories are located there.
The protests that have continued for 150 days have severely hurt country’s economy, said Saurav Jyoti, chairperson of tax and revenue
committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) at an
According to a report of Nepal Rastra Bank (NRB), one day of industrial closure causes losses worth Rs1.8 billion.
Going by the NRB statistics,
the cumulative losses faced by
the private sector have crossed
Rs 300 billion.
“The country’s economy is in a free-fall mode,” Jyoti said.
Shanker Prasad Pandeya, chairperson of bank, finance and insurance committee of the FNCCI, said that the contribution of industries to Nepal’s GDP has fallen down in the recent years. Likewise, the industrial sector is likely to witness a negative growth rate of 2.5 percent since the problem emerged in the Tarai region, according to NRB.
“Financial institutions have excess liquidity, but they don’t have areas to invest. The economic collapse unfolds as none of the sectors are performing well,” Pandeya said, adding that inflation has already touched the double-digit figure.
Subodh Gupta, vice president of Birgunj Chamber of Commerce, criticised the government for not being able to provide security for the industries in Birgunj. “The situation is going from bad to worse. We are clueless as to how to pay detention charge of cargo trucks consignments from India,” Gupta said.
Private sector leaders also urged the government to extend the deadline for making payment of bank interest as the situation has not been conducive.
Arun Pradhan of Saptari Chamber of Commerce and Industry said that the government should extend deadline for making payment of interest by at least three months. “The central bank had extended the deadline for interest payment. But the deadline is about to end within a couple of days,” he said. “As the situation has not improved, the deadline should be extended more.”
Finance Minister Bishnu Paudel said that the government is cautious about the impact of ongoing situation and stressed on the need to work together with the private sector. “Our economy is not in good shape. This is indeed an outcome of political problem and needs a political solution,” he said. “We are
committed to resolving the crisis as soon as possible by bringing the agitating Madhesi parties on board,” Paudel said.
The finance minister said that the government’s decision to establish Rs100 billion ‘Economic Rehabilitation Fund’ to bail out
the country’s economic sector hit
by the earthquakes, political unrest and Indian trade embargo is in line with the government’s commitment to work together with the private sector.