In KTM Voice’s regular series ‘Business Voice’, we feature the voices of individuals from the private sector. We started this series with the aim that the voices of industrialists and entrepreneurs—not only from the Kathmandu Valley but from across the country—reach Singha Durbar. In this edition of Business Voice, we present an edited excerpt of Sargam Tamang’s conversation with Krishna Prasad Sharma, President of the Lumbini Province chapter of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

1. What is the overall economic condition of the province at present?

Lumbini Province is full of potential and is very important in terms of industry and tourism. However, the current economic condition has still not returned to the pre-COVID rhythm. Production capacity is operating at only around 50 percent, enough employment opportunities have not been created, and youths continue to leave the country. Nevertheless, the current budget has shown some positive indications. If the plans included in the budget are implemented effectively, we hope for an encouraging transformation in Lumbini’s economy.

2. Which sector (industry, trade, services, etc.) has been most affected?

It is not just a single sector—rather, the entire economy is under pressure. Due to decreased consumption, sectors like grocery, retail, services, and manufacturing have all been directly or indirectly affected. When one sector suffers, its ripple effects spread to others as well. The lack of consumption has weakened the overall business cycle. Nabil Bank 2082 Box Kumari Bank

3. How have rising prices affected businesses and consumers?

The main issue right now is not only inflation—it is that people’s purchasing power has decreased. When construction activities come to a halt, liquidity in the market drops, workers become unemployed, and businesses collapse. The demand for products like cement, iron rods, and sand has decreased, affecting the entire supply and construction chain. It is essential to implement the issues addressed by the budget as they are.

4. What challenges are small and medium enterprises (SMEs) facing in the province?

SMEs are under tremendous pressure due to the sluggish market. Products exist, but taking them to the market, selling them, and earning profit has become extremely difficult. Until the economy becomes dynamic, the condition of small businesses cannot improve. These challenges can be overcome only through cooperation between the government and the private sector.

5. What economic reform suggestions have you given to the provincial government?

We proposed suggestions related to tourism promotion, increasing production, and export-based improvements. It is positive that these suggestions have been included in the budget. If the plans are implemented properly, they will help energize the economic cycle.

6. Are government policies business-friendly? If not, where is improvement needed?

On paper, the policies look good, but implementation is weak. Lack of good governance, negative attitudes within the bureaucracy, and delays have prevented business-friendly policies from becoming effective. Improvement is needed not only in policy but also in its implementation and monitoring system.

7. Do you see signs of economic improvement in the next 6 months to 1 year?

Signs of improvement are emerging, but it depends on how well the budget is implemented. If the government works transparently and cooperatively with the private sector while maintaining accountability and good governance, positive changes are possible within 6 months to a year.

8. What strategies has the private sector prepared for economic reform?

The private sector has prioritized transparent partnerships, a corruption-free business environment, and cooperation with the government. We have put forward plans for investments in productive activities, creating employment opportunities for youth, and promoting exports. These measures will bring long-term improvement.

9. The budget has reportedly made the private sector quite happy. Now that the monetary policy is also coming soon, what kind of monetary policy do you expect?

The budget has encouraged the private sector. Now, the monetary policy should continue that momentum. We expect a policy that supports an investment-friendly environment, ensures easier access to loans, and guarantees the financial flow needed for industries. The monetary policy must be business-friendly and development-oriented.