Last Word

IT Niti

By Chanakya

The recently concluded CAN-Info Tech 2001 did showcase Nepal’s development in the IT sector. The overwhelming response received by the exhibition does demonstrate Nepali interest in IT. The words of the IT Minister kept on echoing - we missed the Green and the Industrial revolution – we cannot afford to miss this one. However, at this juncture, it will be interesting to examine – have we missed or are we going to miss.

Yes, the IT policy, that has been much deliberated upon, and the related laws are ready, but is that enough? The world-over we have been witnessing the fact that government has been a mere spectator in terms of the development of IT, as they have not been able to keep pace with developments in the IT sector. The taxman has yet to get a clue of e-commerce and now there is emergence of m-commerce. The visa rules and work permits are starting to lose meaning as people are working from round the globe for companies in other parts of the globe. When such a phenomenon has been sweeping across continents, it is quite natural for the Nepali government and regulators to be a silent spectator. But again the question is: how do we get the competitive edge?

Nepal’s business related laws are antique and do not fit even in the older economy. So the new economy would definitely have problems. The laws relating to formation of companies, setting up industries and joint ventures are outdated. The labour laws have enough problems that really discourage any company to grow in terms of size. The foreign exchange laws, especially the dependency of our hard currency rates on the Indian Rupee, leaves an element of uncertainty as the fundamentals of market demand and supply do not work. This makes transactions over the net unpredictable. The means of raising finance and funding for new ventures are tedious. Finally, the taxation system with its inherent problems makes the growth of an enterprise difficult.

Therefore, the players that exist in the market, barring a couple of them, are small, be it the cyber cafés in Thamel or the hardware vendors in New Road or the computer training institutes lined up in Putali Sadak. Though it is interesting to see the numbers multiplying, it is sad that these generally operate outside the realm of the regulators and fail to grow into larger organizations.

The time is now to look at the IT industry in a different way. The issues are known and deliberated enough. The fact is that this sector is growing at an unpredictable pace and it is very difficult for any government in the world to keep its regulations moving at the speed of innovations. A creative way of tackling this issue needs to be thought upon. Perhaps, the best way would be to have a different set of Act that would govern the IT businesses, and save them from being entangled in the provisions of various other laws of state.

However, the government should also not miss out on the increasing activities in this sector. This means that a regulatory authority needs to be set up and a system has to be there to ensure that the government is actually getting its share of the pie, be it in terms of taxation or help in developmental activities. Unfortunately, in any of the business booms we had seen in the past in Nepal, be it in terms of the upahaar programs or the real estate or the stock market, government gained very little compared to the hundreds that made good money. This should not happen in case of IT. The need of the hour is a good set of policies laid down by the law where all the stakeholders of an enterprise, including the government, benefit.

Send your feedback to the editor: bizage@ecomail.com.np
1999 © Mercantile Communications Pvt. Ltd. P.O. Box 876, Durbar Marg, Kathmandu, NEPAL. Tel : 977 1 220 773, 243 566 . Fax: 977 1 225 407. Reproduction in any form is prohibited without prior permission. No part of the articles which appear in the internet version on BUSINESSAGE may be reproduced without the permission of Mercantile Communications Pvt. Ltd. For reprinting rights, please write to us. Send us your feedback:contact us . CLICK HERE FOR PAST ISSUE. This site is best viewed at : 800 X 600 resolution