The Confederation of Nepalese Industries (CNI) has issued a response indicating that the current economic landscape presents challenges to the industries’ ability to meet the government’s revised minimum wage mandate for workers. The government, in a notice published in the national gazette on Thursday, unveiled an adjustment to the minimum wage for laborers.
In light of this development, the CNI has expressed its reservations. The CNI stated, “Given the prevailing circumstances, CNI holds the view that the private sector finds itself ill-equipped to shoulder the increased wage burden.”
CNI’s statement highlights the economy’s current recessionary state, compounded by factors such as elevated interest rates, diminished demand, and decreased production, which have collectively dampened the private sector’s morale. Industries, aligned with their unique operational characteristics, have reported a staggering 70 percent drop in production output. Furthermore, business leaders have voiced concerns over the deferral of investment initiatives.
While expressing a desire to bolster workers’ minimum wages, the CNI underscores that existing challenges within the private sector constrain their ability to implement such increases. “The economy risks deceleration, domestic production stagnation, and even if production persists, demand could remain sluggish. Amplifying the predicament is the prospect of inflated production costs, ultimately burdening industries,” states the CNI.
In response to these circumstances, the confederation has advocated for strategic reforms to render the economy more sustainable. Their recommendations encompass the need for comprehensive policy adjustments to stimulate broader market demand, curtail production expenses, and elevate the private sector’s confidence.
