KATHMANDU, OCT 08 -
More than half a dozen bills and policies related to reforms in the industrial sector
are languishing in oblivion although they are vital components of the
second generation reform programme unveiled by the government this
fiscal year.
According to the Ministry of Industry (MoI), seven bills and two
policies are awaiting approval by the government. They are Industrial
Enterprises Bill 2014, Foreign Investment and Technology Transfer Bill
2014, Special Economic Zone Bill 2014, a bill for the amendment of
Company Act 2006, a bill to amend Nepal Standard on Quality Control Act
1980, a bill to manage Nepal Accreditation Act and a bill to manage
intellectual property.
Likewise, the policies awaiting approval are Foreign Investment Policy
2014 and the policy for safeguarding Intellectual Property Rights.
The government has planned to introduce new laws and policies to
improve the country’s investment environment so that domestic and
foreign capital will be forthcoming. The country’s industrial sector
is estimated to have grown just 1.9 percent in the last fiscal year,
and the growth rate has been disappointing over the last several years.
The contribution of the industrial sector to the gross domestic product (GPD) has decreased to 6.1 percent in the last fiscal year from around 10 percent a decade ago.
Policy inconsistency, power crisis, poor road network and rigid
industrial and labour laws have been identified as the four key
constraints to realizing Nepal’s economic potential, according to a
joint study done by Nepali and US experts under the Millennium Challenge
Corporation, a US aid agency.
“Industrial growth has remained at a dismal position following the
failure of appropriate laws and policies,” said Yam Kumari Khatiwada,
spokesperson at the MoI. “Hence we have come up with plans to follow up
the status of the bills and polices that are awaiting government
approval and act accordingly.”
The MoI has accorded priority to the endorsement of the necessary laws
and has asked the concerned departments to complete the task required
for the specific acts and bills by allotting a concrete time frame.
The Industrial Enterprises Bill is presently being reviewed by the bill
committee of the Cabinet. According to Khatiwada, the MoI is mulling
efforts to make sure that the bill is passed at the earliest possible.
After a new Industrial Policy was introduced four years ago, the
Industrial Enterprise Act had to be introduced soon to implement the
provisions in it. However, it has not seen the light of day.
The government had tried to introduce the act through an ordinance
during the Khil Raj Regmi-led government, but it failed to do so.
Similarly, the SEZ bill which was been awaiting passage for the last
five years, has just been sent to the Ministry of Law for its approval
before being presented to the Cabinet. The government had planned to
incorporate some provisions regarding the SEZ in the proposed Industrial
Enterprise Act during the Regmi-led government, but the idea was
abandoned and new homework has begun to introduce a separate SEZ Act
through the parliamentary process.
“It has been taking several years to introduce a single vital act,”
said Poshraj Pandey, a trade expert. “This is a situation of policy
paralysis, and it has conveyed a negative message to both domestic and
foreign investors.”
Meanwhile, the government is mulling operating the Bhairahawa SEZ
through a directive as it is taking time to introduce the SEZ Act.
The MoI has prepared a Bhairahawa SEZ Operation Directive based on
which it will be operated. According to the MoI, the directive will soon
be presented to the Cabinet for its go-ahead. The Bhairahawa SEZ will
be operated based on the directive.
Similarly, another important bill on Foreign Investment and Technology
Transfer will be sent to the Cabinet this month. “The act will be
prepared based on the policy approved by the Cabinet,” Khatiwada said.
Likewise, the MoI has completed a private-public dialogue regarding the
new Company Act and is making preparations to send it to the Law
Ministry by mid-December.
Senior vice-president of the Federation of Nepalese Chambers of
Commerce and Industry (FNCCI) Pashupati Murarka has said that the
changes in legal provisions which have been enforced in the last two
decades need to be changed at the earliest possible for the growth of
the country’s industrial sector .
According to him, the government should be broadminded and provide
appropriate services and facilities to the sector for its growth.
“Bringing the act only won’t do much good. The kind of legal provision
that is endorsed will be the key for investors,” said Murarka.
He added that the existing Industrial Enterprises Act offered a lot of facilities for the industrial sector
, however, they had been cancelled by the Financial Act. “We have urged
the government to bring in clarity in the acts so that there won’t be
problems,” Murarka said.
Acts
- Industrial Enterprises Bill 2014
- Foreign Investment and Technology Transfer Bill 2014
- Special Economic Zone Bill 2014
- Bill for amending Company Act 2006
- Nepal Standard on Quality Control Act 1980
- Bill for managing Nepal Accreditation Act 2014
- Bill for managing Intellectual Property Protection
Status
- Under review at bill committee of the cabinet
- The preliminary draft policy has bee already prepared. Once the proposed Foreign Investment Policy is passed, a public and private dialogue will be held based on the draft
- The bill will be sent to the Ministry of Law for approval before presenting it to the Cabinet
- Will be sent to several stake holding authorities by making the investment policy compatible with international polices
- Will be sent to Ministry of Law and other stakeholder agencies after preparing final draft
- Will be sent to Ministry of Law and other stakeholder agencies after preparing final draft
- The draft will be finalized once the Intellectual Property Rights Policy is passed
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