June 14: The government had mentioned in the budget speech for the upcoming fiscal year (FY 2022/23) that it will provide facilities for the establishment of production-oriented industries and for importing industrial raw materials. The country can become self-reliant if the government genuinely wants to promote home-grown products. However, the government’s announcement often contradicts its acts. Most of the times, the announcement made by the government gets limited to papers.

Although the government had announced to promote production-oriented industries, it has increased the customs duty and excise duty on industrial raw materials through the finance bill.

Stakeholders say this will have a negative impact on the industries contrary to the government’s claim of promoting such industries.

GI wire and sanitary pad manufacturers have said that the change in tax rates has made it impossible to compete with foreign goods. Manufacturers of GI wire and sanitary pad have already met the prime minister and informed him about the problem.

Dolraj Adhikari, president of the Nepal Sanitary Pad Producers' Association, accused the government of trying to discourage self-reliant industries. "Domestic pad industry, which has a higher production capacity than consumption, has become uncompetitive," said Adhikari.He said that they can sell country-made pads at a cheaper price if the government provides them tax exemption on raw materials just like it has given exemption for the import of foreign sanitary pads.

Adhikari warned that if the exemption given on the import of ready-made pads is not removed soon or other measures are taken to save the indigenous industry, they would hand over the key of the industry to the finance minister.

Production of pads requires many raw materials, out of which 7 types should be imported. According to the association, there are 35 pad manufacturing industries in the country so far, with total investment of Rs 6 billion. 

Likewise, the oil industry, which imports 100 percent raw materials and exports refined oil, has also been hit hard by the government’s new policy. They have met a large part of the domestic demand. 

Stating that the provisions of the new finance bill have hit the industry hard, Sandeep Agrawal hoped that the discussions with the government would help resolve the problems. He said that the government has fixed 5 percent customs duty for the import of ready-made cooking oil but the customs duty for importing raw materials required to produce oil is 10 percent. 

According to the concerned industrialists, the investment of billions of rupees will be at risk as this arrangement will facilitate the import of refined oil.