As government delays in paying billions of rupees owed to the construction industry continue to upset the economic cycle and put workers, companies, and huge industries in trouble, Nepal’s economic stability is being seriously threatened. Millions of people’s livelihoods and the general capability of industries are being impacted by the three-year-old payment backlog.
Nepal’s government has withheld 45 billion rupees in payments for both major national projects and small-scale local enterprises. According to business owners in the construction industry, the actual sum might be far greater. The money hasn’t been issued yet, even though Finance Minister Bishnu Poudel previously instructed that these payments be given priority.
Impact on the Construction Sector and Industry
While workers’ wages are still unpaid, construction businesses are finding it difficult to maintain projects, which has an impact on livelihood and consumption nationwide. Contracts worth more than 600 billion rupees have been signed without securing resources, leading to years of stalled progress and a crippled economic system, according to Ravi Singh, President of the Federation of Contractors’ Associations of Nepal. “Uncertainties about resources have prevented thousands of signed projects from moving forward,” Singh saiid.
Businesses that provide vital building supplies like steel and cement have also seen significant setbacks, which has had a broad impact on the job situation. The difficulties facing the construction industry have led to a significant increase in non-performing loans in banks and other financial institutions, impacting their stability and profitability.
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