Kathmandu: The private sector, which contributes 81 percent to the country's economy and provides nearly 90 percent of employment, is currently facing an extreme downturn. Industries are experiencing a significant decline in demand, leading to reduced production and adversely affecting the income of hundreds of thousands of people involved in production, distribution, and sales.

A study by the Nepal Rastra Bank (NRB) indicates that industries have had to cut down production by up to 60 percent, impacting government revenue as well. According to estimates from the Central Statistics Office, the growth rate of the economy's major sectors – production, construction, and trade – is expected to be negative by over two percent this fiscal year, which raises concerns about the country's economic health.

The private sector is facing challenges due to the economic slowdown and high interest rates on loans. The interest rates have increased as depositors shifted their funds to fixed deposits, making it difficult for the private sector to invest and stimulate economic activity.

Historical data shows that the flow of loans to the private sector increases when interest rates are lower, resulting in positive economic growth. Therefore, it is essential to lower interest rates to encourage investment, business expansion, and overall economic growth.

In this uncertain situation, the private sector is looking to the Nepal Rastra Bank for support and has submitted a list of suggestions to address the current difficulties. They emphasize the need for flexible monetary policies that can boost market confidence, such as different interest rates based on the timeframe of fixed deposits and a flexible debt equity ratio to encourage loan flow.

The recent policy change that affected the general public is the restriction on sending remittances from abroad through remittance companies. The private sector demands a policy revision to allow sending up to Rs 100,000 through such companies based on identity cards. Additionally, certain provisions regarding loan accounts and working capital loans need practical adjustments to accommodate different industries' needs.

The private sector also urges the provision of project loans to small and medium-scale industries, increasing the loan limit to at least Rs 50 million, and offering special interest rate discounts to encourage production-oriented industries. They emphasize the importance of refinancing in various sectors, including production-oriented, small and medium-scale, export-oriented industries, tourism infrastructure, and businesses run by women entrepreneurs.

Given the current extraordinary situation, the private sector hopes that the Nepal Rastra Bank will adopt timely and flexible policies to address the economic crisis and pave the way for growth and expansion. A well-crafted monetary policy can play a crucial role in resolving the challenges faced by the country's economy.

In conclusion, the private sector is eagerly awaiting the timely release of the draft monetary policy by the NRB, with expectations that it will effectively address the identified economic problems and provide the necessary support to revive the sluggish economy.