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| Kathmandu, Wednesday December 31, 2003 Paush 16, 2060. |
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Industrial Policy, IEA, FITTA to be amended
By Milan Mani Sharma
KATHMANDU, Dec 30 - The government is reviewing the
Industrial Policy-1992 and also amending the Industrial Enterprise Act (IEA) and Foreign
Investment and Technology Transfer Act (FITTA) to ensure WTO compatibility in the policy
framework and make investment climate friendlier.
"A team constituted recently to review the policy, has
started preparatory works," said Govinda Prasad Kusum, Joint Secretary at the
Ministry of Industry, Commerce and Supplies. The joint Act of IEA and FITTA would be
amended as soon as the policy review is completed, he added.
The amended policy, among others, would address issues like
industrial security and Special Economic Zone (SEZ), which were not incorporated in the
existing policy. It would also pledge new incentives for the foreign investors to boost
the foreign direct investment (FDI).
The changes in incentives for the foreign investors is being
worked on as per the demand of the private sector that has been advocating that previously
committed incentives were being nullified by the Acts enforced later and existing
incentives were not adequate to attract FDI.
"The policy reviewing team will work in co-ordination
with Finance Ministry while making arrangements for new incentives," he said.
The amended policy is likely to make the government
responsible for providing industrial security. However, the private sector would be asked
to contribute to the process, mainly in financing the security force.
"Detailed provisions on the matter, however, will be
devised through a separate industrial security work-plan that the MoICS will develop in
co-ordination with Defence and Home Ministries later," they added.
The policy would also contain guidelines for establishing
Special Economic Zones. "However, we feel that separate SEZ Act will be required to
devise strategies and incentives related to it," said Kusum.
Although establishing the SEZ in various parts of the country
has been integral part of the government programmes, there is no specific policy and legal
framework on it.
"Our thrust while preparing the policy will be on
streamlining the FDI in the SEZ logistically and we also will focus on diverting the major
chunk of the FDI to export-oriented sectors," said officials.
The amended policy would also propose for declaring ‘industrial
zones’ in every urban centre to systematise the set up of industrial centres.
"It will also deal with broader investment concerns of Non-resident Nepalis (NRNs)
like guaranteeing their investments, although detailed provisions on the matter will be
addressed through a separate NRN Act," said Kusum.
Also, the amended policy would lay emphasis on institution
building and defining regulatory functions of government agencies along with their
promotional activities. It would also define hydropower as an industry in the context of
FDI coming to the sector and Nepal’s impending accession to World Trade Organisation
(WTO).
"The policy will clearly prioritise the industrial
sectors on the basis of their competitive potential and impact on the national
economy," said the official.
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