2082/83 budget in Nepal allows Nepali businesses to invest abroad

2082/83 budget in Nepal allows Nepali businesses to invest abroad

Private sector issues in the budget: Free land for indigenous industries Open to foreign investment


The government has addressed the demands of the private sector including making the industrial sector viable, increasing production capacity and increasing investment. Finance Minister Bishnu Paudel addressed the demand of the private sector through the budget of the financial year 2082/83.

From the report of the High Level Economic Reform Suggestion Commission chaired by former Finance Secretary Rameshwar Khanal and its action plan, the private sector-friendly policy has been adopted through the budget of the next financial year. Presenting the budget in both Houses of Parliament, Finance Minister Paudel said on Thursday that from the next fiscal year, licensed industries that establish new industries in special economic zones and industrial areas will be given a rent discount for the first three years.

"The monthly rental rate of the special economic zone will be reduced from 20 rupees to 5 rupees per square meter," the budget statement said, "if the industrial sector exports more than 30 percent of its production, it will be given facilities similar to those of the special economic zone."

Finance Minister Paudel said that the monthly rental rate set for the industrial sector will be reduced by 50 percent. "I have allocated 1 billion 55 million for the construction of industrial infrastructure," said Paudel. The government has said that it will develop Nepal into an excellent destination for foreign direct investment. "Investment promotion and double tax exemption agreements will be made with countries that have investment potential," he said.

In Nepal, the process of bringing in foreign investment and taking out the earned profit was difficult, so the inflow of foreign direct investment was less than the commitment. The government has also announced that the process of bringing in foreign investment and repatriating profits from the budget of the next financial year will be simplified. Finance Minister Poudel said that the government will adopt an anchor investment policy to attract foreign direct investment as compared to foreign direct investment commitments.

Chandra Dhakal, President of Federation of Nepal Industry and Commerce, said that some of the demands put forward by the private sector have been addressed. "Concessions given in special economic zones and 30 percent exports from industrial zones will have a positive impact on the productive sector," he said.

It is mentioned in the budget statement that within the financial year 2082/83, the project development agreement (PDA) worth 7 billion rupees with the private sector and the construction work of the project worth 4 billion rupees will be started. The government has allocated a budget of Rs 74 crore to the Board of Investment, Nepal for the next financial year. The government has also adopted a policy of allowing 25 percent foreign investment from the next financial year and the investment board will give its approval.

"Nepali businessmen or companies will be allowed to set up a processing factory by exporting sales branches or semi-processed materials abroad," the budget statement said, "for this, a legal provision will be made to allow up to 25 percent of the annual income from exports to be invested abroad."

The government is going to encourage industries operating in Kathmandu Valley to control pollution in the capital by transferring them to industrial areas outside the valley. According to Paudel, land will be provided free lease to such industries. The government has brought a policy to provide relief to the private sector and real estate businessmen.

The government has a policy to open up the sale and distribution of housing and apartments that have been granted permission but have not been able to sell it due to the land exceeding the limit. In order to prevent excess land from coming under the name of the government, businessmen will be allowed to construct houses, housing and apartments and sell them even on the land previously held in the name of various industries and companies. In Section 12 (g) of the current Land Act, there is a provision that no sale and distribution of land in the name of the cooperative farming organization designated by the Government of Nepal through a notified order shall be permitted.