June 15: The businessmen and common people feel betrayed when the government makes announcements but does not implement them time and again. Experts say that the practice of not implementing the announcements, which are made only to gain popularity, will have detrimental impact in various areas.

A chaotic situation has now been created due to the lack of implementation of the past policies or changes in agricultural insurance, Covid-19 insurance, cash subsidy for exports, capital gains tax, etc. The dual nature of the state has created an atmosphere of distrust on the one hand, and entrepreneurs, businessmen and the general public have become confused on the other.

After introducing the concept of agricultural insurance, the government arranged for subsidies on premiums for 10 years. Initially, the subsidy was 50 percent, which changed to 75 percent, 50 percent and then 80 percent. Experts say that the percentage of subsidy changes as soon as the government changes. For three years, insurance companies have not received the subsidy announced by the government. The arrears of agricultural insurance subsidy alone have reached Rs 3 billion and the government is reluctant to provide the amount, according to the owners of the insurance companies.

In the budget of the next fiscal year (FY 2023/24), the government has allocated Rs 950 million subsidy on agricultural insurance, which was Rs 750 million in the current fiscal year. Insurance companies consider agricultural insurance to be a loss-making business. They complain that even though they have supported the policy taken by the government, the state has put the insurance companies in trouble.

According to the insurance companies, even though claims are continuously being settled, the government is not paying the due amount and the situation has turned uncomfortable.

For the past six months, the Ministry of Agriculture, the Department of Agriculture, and the Nepal Insurance Authority have not given any assurance to release the due amount. As a result, the insurance companies issued a press statement and said that the issuance of agricultural insurance policies and settlements of claims have been postponed.

Similarly, the government had announced that it would provide 8 percent subsidy on exports of cement in the current fiscal year. The cement manufacturers were delighted with the decision but the joy was short lived. The government later prepared a work procedure according to which cash subsidy of 8 percent would be provided only to the exporters who export cement worth more than Rs 500 million a year. Others would have to settle for subsidy of 4 percent.

Raghunandan Maru, managing director of Shivam Cement, says that it is difficult for the industrialists when the reality is different from the announcements made by the government.

The Confederation of Banks and Financial Institutions Nepal (CIBFIN) has opposed the additional tax levied on income from mergers in the upcoming FY's budget. CBFIN issued a press statement and said that they are trying to impose a tax against the national and international laws and will not accept it under any circumstances.

CBFIN stated that imposing tax liability without legal basis and contrary to national and international practices will cause unimaginable damage to the banks, financial institutions and other sectors as well as the economy as a whole.