Jute factories get 70% discount on electricity for another year

The government has decided to continue providing 70 percent discount on electricity tarrif to the jute producers - one of the largest foreign currency spinner industries in the country.
The government had provided 70 percent off on total electricity bill to the jute industries in 2008/09 in order to support the industry, which provides jobs to around 20,000 people, saying that the facility will hold good for for three years.
As the term of the facility was expiring soon, the Cabient decided to continue the facility last week, said a senior Ministry of Industry (MoI) official. "The facility has been extended for a year," Bishnu Dhakal, under secretary at the MoI told Republica.
The government´s decision will benefit nine jute factories operating in the country at present, enabling them to reduce the cost of production.
The MoI, entrusted to work with the private sector and industrialists to uplift the country´s industrial sector, has said that it was working on providing five percent cash incentives to jute producers who export to India. So far, such incentive is arranged for the third country exports only.
"The jute producers have demanded for five percent cash incentive in ratio of export even to India," Dhakal said. "However, no decision has been made so far to this effect but we are considering their proposal positively."
MoI officials view that extending cash incentive to third country exports, but excluding exports to India makes no sense, especially given that their earnings have been enabling the country to manage the Indian currency needs.
"It is true, chances of leakage of this facility is high. As a state, we must have the confidence that we will be able to plug its leakage," said another MoI official.
Beside, he argued that earning of Indian currency (IC) was no different than USD earning, particularly as the Nepal Rastra Bank (NRB) has been fulfilling IC supply by buying it against USD.
Data of NRB show, Nepal exported jute products worth Rs 4.06 billion to India in fiscal year 2011/12.
Prime Minister Babu Ram Bhattarai in May had said he was positive toward providing cash incentive on exports made to India by the industries employing a large number of workers. He had even assured of providing four percent cash incentive to jute factories through the new budget of 2012/13.
However, the government has failed to live up to the commitment as it failed to announce full-fledged annual budget due to deepening political rift.