WORKSHOP ON FEDERALISMManaging Challenges

Confederation of Nepalese Industries (CNI) organizes a workshop on ‘Resource Management in Federal System

Aug. 5, 2015, 5:45 p.m. Published in Magazine Issue: Vol: 09 No. -3 July. 24- 2015 (Shrawan 08, 2072)

At a time when Constituent Assembly is in the process of finalizing the draft of the new constitution, CNI organized a workshop on resource management in Federal System.

Four distinguished personalities, Dr. Shanker Sharma, senior advocate Anil Kumar Sinha, charter accountant Sudarshan Raj Pandey and senior vice president of CNI Hari Bhakta Sharma presented their papers at the program, which concluded with the remarks of finance minister Dr. Ram Sharan Mahat.

“There are many clauses which contradict with an open and market economy. I have already registered my views on the issues,” said finance minister Dr. Ram Sharan Mahat. "The draft will be improved by making it a document compatible to liberal and market economy.”

Highlighting the program, senior vice president Sharma said, “It is a major concern for us how the Tax Administration role is shared between Center and State? Where does the tax revenue get routed? Through State or Central Coffers?  How is the oversight on Refund? How will a Company having a corporate office in 1 State, Factories in another, and selling products across the country – organize its tax planning?”

With the purpose to understand the fiscal perspectives of federalism, looking forward to possible economic challenges and opportunities in the federal structure, CNI hosted the workshop. “Private sector’s concerns and questions need to be addressed,” said Sharma.

Despite making political consensus on federalism, political parties are yet to look into the economic issues seriously.

“Eight years have passed since the promulgation of the interim constitution. Nepal is now finalizing the new constitution. Political stability is a prerequisite for a sustainable development and economic prosperity,” said Narendra Kumar Basnyat, president of CNI.

“As the country is heading towards federalism, there is the need to settle the issue of taxation at the local, central and provincial levels. Distribution of resources and taxation at various stages are important components for industrialization. New constitution, laws and regulations need to define them clearly,” said Basnyat.

CPN-UML leader and former finance minister Surendra Pandey assured business community that the new constitution will give them freedom to do businesses. “There is no question to contain liberal economy,” said Pandey.

However, business communities held different views. “The draft of the Constitution of Nepal 2072 does not give importance to liberal and market economy. The draft also underestimates the fiscal aspect of federalism as expected by private sector. We know private sector is going to be the most affected by the federal system. We urge political parties to correct the provisions which are contradictory to liberal and market economy and against fiscal federalism,” said president Basnyat.

However, UCPN-Maoist leader and former finance minister Barsha Man Pun said  that the socialism orientation does not mean Nepal is going for communism. “Don’t be panicky on the word socialism. We are committed to free economy,” said Pun.

“We need private property rights  unequivocally guaranteed by the Constitution. We need right to free movement of citizens, free working rights across provinces and equal social net across the country, equal right of every citizen to use all natural resources of the country, development and resource management, financial and monetary management, tax system, business and legal regulations in federal system, rights of employers/employees, free movement of labor and capital (in addition to goods and services) and framing laws,” said senior vice president Sharma.

“We have reservation over article 61 (6 ) and  Article 63 (1),” said Sharma . “Article 225 (1) – Local Bodies to frame working manual/directives for implementation.”

Senor advocate Anil Sinha said that the frequent changes of laws and regulations are creating a lot of problems for doing business in Nepal. “ Nepal needs to have a stable legal system and laws need to be given time for evolution."

 

 

 

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