Fiscal Policy Most Crucial for Economic Development: CNI President

Confederation of Nepalese Industries (CNI) President Birendra Raj Pandey has said that the government’s fiscal policy plays the most critical role in driving economic development.

Addressing the “Budget Watch” programme focused on industrial development, Pandey said that the effective implementation of the national budget is essential to increase capital expenditure, achieve targeted goals, bring policy reforms, and expand the overall economy. He stressed that while fiscal policy sets important targets, supporting policies must work in coordination to ensure those targets are met.

“Although important goals are included in the budget, weak implementation has been a persistent problem. This is why we launched the ‘Budget Watch’ initiative to focus on making budget implementation more effective,” he said.

Pandey noted that the private sector routinely provides policy recommendations during the budget formulation process, many of which are incorporated. “Their inclusion encourages us. However, when it comes to implementation, the process becomes extremely weak, which is disappointing,” he added.

With the objective of providing constructive support for effective budget execution from the private sector, the CNI has been running the ‘Budget Watch’ initiative for the past three fiscal years in collaboration with the Society of Economic Journalists of Nepal (SEJON). Pandey said the programme serves as a public–private dialogue platform to support the effective implementation of budget provisions directly linked to the private sector and the broader economy.

Highlighting the importance of industrial development for overall economic growth, Pandey said the matters related to industrialisation included in the budget must be implemented effectively. “We need to move forward with a focus on industrial development and align policy reforms accordingly. This will help boost domestic production and promote import substitution,” he said, adding that self-reliance is not possible without increasing domestic production.

At a time when global trade competition is intensifying, Pandey said Nepal must set clear national economic goals. “Sustainable economic prosperity can be achieved only through a self-reliant economy. Along with the effective implementation of the current fiscal year’s budget, the objectives of the next budget should also be directed toward this goal,” he said.

He further pointed out that countries with economies similar to Nepal have already made significant progress. “Policymakers and regulatory bodies must study why and how those countries advanced. If policies remain stable, productive industries are protected, and investment in industrial establishment is encouraged, Nepal can also advance rapidly through industrialisation,” he said.