Chandra Prasad Dhakal FNCCI: Private Sector Role in Nepal Economic Transformation & Wage Policy
25th April 2025, Kathmandu
Chandra Prasad Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), stressed that economic transformation in Nepal will not succeed without active participation from the private sector.
Chandra Prasad Dhakal FNCCI
He shared this view during a workshop in Kathmandu on effective wage policy formulation and implementation. The Ministry of Labour, Employment, and Social Security organized the event with technical support from the International Labour Organization (ILO).
Private Sector Must Be Mobilized
Dhakal emphasized that the private sector must be fully mobilized to support national goals like economic growth and social prosperity. According to him, effective wages for workers are essential, but the strategy must align with the economic realities of the country. He noted that unless the private sector feels confident and supported, wage reforms alone cannot drive broader transformation.
Challenges in the Current Economic Landscape
Nepal’s economy faces multiple hurdles. Dhakal pointed out low economic growth, shrinking industrial activity, and poor productivity. He explained how these issues directly affect business performance. Rising wages, without increased productivity, place extra pressure on employers.
He warned that rising labour costs could force many employers to cut operations or even shut down. “Higher wages increase costs, but many employers may not afford them,” he said. He called this a serious concern that deserves urgent attention.
Need for Balanced Wage Growth
Dhakal referred to the ILO Global Wage Report 2024–25. The report shows that real wages in Asia and the Pacific have grown faster than in other regions. While positive, Dhakal noted, wage increases must remain in balance with productivity and business sustainability.
He also acknowledged the ILO’s global contribution to fair wage discussions. Nepal, he said, has followed international standards while developing its Labour Act (2074) and Labour Regulations (2075). These legal frameworks help determine minimum wages in a structured way.
Concerns About Implementation
Despite the legal frameworks, Dhakal noted gaps in analyzing how wage increases impact the economy and productivity. He said there is no strong system in place to measure these effects. According to him, Nepal needs a detailed method to understand how wage policies affect private sector efficiency.
Dhakal underlined the need for wage sustainability. He explained that employers must be able to offer fair pay without risking their businesses. At the same time, a stable business environment helps attract investment and support job growth.
Private Sector Recommendations
According to Dhakal, employers consistently suggest wage structures that ensure clear returns on investment and manageable liabilities. He believes the government should listen to these voices while shaping wage policies.
Dhakal concluded by urging the government and development partners to work with the private sector to build a fair, competitive, and productive labour market. The three-day workshop was officially opened by Labour Minister Sharat Singh Bhandari.
Moving Forward
The event brought together employers, trade union leaders, policymakers, and international experts. Discussions focused on creating wage policies that support both economic development and worker rights.
The message was clear: to build a prosperous Nepal, the government must engage the private sector as a key partner in every step of the economic transformation process.
For more: Chandra Prasad Dhakal FNCCI
