In the aftermath of the destructive earthquake, Samriddhi organized a program titled “Reviving Nepal’s economy/ The role of Private sector” at Hotel Annapurna on 2nd June, 2015 attended by, amongst many others Dr. Hemant Dawadi, Mr. Anil K Shah, Mr. Pashupati Murarka, Mr. Kamlesh Aggarwal, Mr. Hari Bhakta Sharma. The program was moderated by Dr. Bishwambar Pyakurel. A team from Biruwa led by Mr. Vidhan Rana also attended the event.
The program was organized majorly to discuss the post disaster economic scenario of Nepal, what can be done to create sustainable economic recovery, what can be done to revive the economy and to make Nepal more prosperous than ever before. The Macroeconomic situation of Nepal was diagnosed and additionally the role of private sector and their scope was also discussed. Special acknowledgement of private sector was done by all the panelist for being resilient and continuing with the good work even in the dire situation in post disaster scenario.
First up was Mr. Anil K Shah, VP, Bankers Association. He started with facts about the earthquake with the human and physical casualties. He expressed his concern about the economic consequences of fear in investment perspective. He was also concerned about the loss of productivity in the economic sector. However on a positive note he mentioned remittance has increased and was optimistic about the flow of bag packing tourists sooner, tourists who flew to Nepal even in time of insurgency. From his professional standing, he said, since the Banks were also directly related to destructed infrastructure; relief to Banks should also be in government priority. On the question of insurance sector he said how insurance penetration has the opportunity to go unprecedented. He also underlined the importance of holistic co-ordinated efforts from all stakeholders including the Government, Bankers, FNCCI, CNI and all parties involved.
Mr. Haribhakta Sharma, VP, CNI, said everyone should work on a same platform for national interest. Government cannot solve all the problem on its own and needs to find the strategic partners in all sectors for efficient functioning. He said the problem was primarily of labor who were traumatized after the disaster and that has directly impacted their productivity in work. He appealed the government to work for increasing the demand and production and making rehabilitation arrangement for equipment and technology that were lost. He demanded that the government should decrease the income tax and VAT and give the firms tax breaks so that the disposable income shall increase for all. He was adamant in providing LOC for increase in cash flow of insurance companies.
Mr. Hemanta Dawadi, Senior Associate Samriddhi, said he didn’t quite expect too much from the government. He asked the government not to be emotional and bring on laws that are short term and unsustainable, like provision of only two storied buildings in Kathmandu. On a question of relocation, he said that relocation can be done only on places where there is economic activity going on. He highlighted the fact that private sector should look to capital market for funding purpose. He also expressed his optimism from venture capitals and alternate financial models.
Mr. Kamlesh Agarwal, Secretary General, NCC, said 50% of GDP was disturbed in economic front due to the quake. He expected the GDP growth rate to hover around 3%. He said government should increase the spending and should work towards minimizing the catastrophic affect of monsoon. He stressed the private sector for “Service first and profit next” approach. He also said since that since international community is emotional, its high time, Nepal could ask India to decrease or abolish CVD. Also, Nepal government in his words, could work to increase export to India and other nations. He was also apprehensive about insurance sector and said that out of 10000 deaths only 400 were claimed which depict the low penetration of insurance in Nepal.
Mr. Pashupati Murarka, Officiating Prez, FNCCI, said economic assessment is pretty tough and 85MW hydroelectricity produced by private sector is disturbed. According to Mr. Murarka, the sale of construction and luxury item was as low as 5% of normal demand. He projected the loss to private sector at 1 kharab(100 Billion) NPR. Cash flow is badly affected and differing with other panelist he said it was not in capacity of government to reduce tax but he would appreciate it if the government didn’t introduce new tax.
Then the floor was for all for discussion and questioning. Mr. Madhukar Sumsher JBR said that the government should go for zero based budgeting and financing from lottery amongst other. He stressed the importance of land bank and the position of BOP. He also said competition between firms should not be sacrificed in the name of co-ordination. Mr. Vidhan Rana, from Biruwa ventures asked about the possibility of foreign Investment in real estate sector of Nepal. He also inquired about the project based financing and its feasibility in Nepal.
Concluding the event, moderator, Dr. Bishwambar Pyakurel shared information about the ad-hoc nature of data collection in Nepal and how the overall situation was not helped by unscientific economic assessment. He was not happy with government agencies for giving varying degree of facts and figures which was confusing to Nepalese as well as foreigners alike. He appealed for dis-aggregated data from each sector so that all data could be in line with reality. He asked the government to introduce fast track decision making mechanism.
Overall, the program was informative and worth attending. Varying degree of opinions could be heard from distinguished panelist which helped to increase our horizon and understanding of post- disaster economic scenario.