Nepal | April 04, 2020

Government raises ceiling on land for industries

Himalayan News Service

Kathmandu, October 24

Issuing the ‘Land Ceiling Exemption Order 2017’, the Ministry of Land Reform and Management (MoLRM) has eased the limitations on land purchase for industrial institutions.

As per a provision of the order, educational or health sector-related institutions, hydropower projects, industries and cooperative farming programmes will be able to buy land in accordance to their need. However, the projects have to clearly justify the necessity of the land in its detailed project report.

The productive sector-related industries are now allowed to purchase up to 500 ropanis of land in mountainous and hilly regions and 50 bighas of land in Tarai region. But the government has not fixed ceiling on land for hydropower projects through this order.

Similarly, construction sector-related industries can purchase up to 300 ropanis in the hilly and mountainous regions and 50 bighas of land in the Tarai region.

Jungle resorts are free to buy up to 300 ropanis of land in hilly and mountainous regions and 25 bighas in the Tarai region and film industries are free to buy up to 500 ropanis of land in hilly and mountainous regions and 50 bighas in Tarai region. Likewise, hospitals that have capacity of 100 or more beds are free to buy 200 ropanis in hilly region and 20 bighas in Tarai region.

Moreover, if the industries want to enhance their capacity within the rules and regulations of the government, the government can provide them additional land based on the findings of a study committee formed by the government. The industries would have to submit their five-year business plans to the MoLRM to get authority to buy additional land.

As per the provision, the government will monitor the industries to check if they are running according to their objectives submitted to the MoLRM and operating business in the said area. The MoLRM can form a committee in coordination of director general of Department of Land Reform and Management. “If the committee finds that the industrial institutions are not running as per their objectives submitted to the government, the provided land could be seized by the government,” said Shambhu Koirala, secretary of MoLRM.

Industries are not allowed to exchange or sell the land purchased for construction of industries. Likewise, industry owner or operator can take loans of up to only 50 per cent of total valuation of the land from banks and financial institutions.

Pashupati Murarka, former president of Federation of Nepalese Chambers of Commerce and Industry, said that introducing new policy regarding the use of land is welcoming. He added however that the industries are still facing hassles in the approval process and the government should ease it too. “Also, if the industry shuts down, the owner should be allowed to do as he or she pleases with the land. The government should clarify on this issue.”

Earlier, the land ceiling for industries had been set at 75 ropanis. If the industries needed more land, they needed approval from the meeting of the Council of Ministers. Private sector investors had long been lobbying for relaxation of the rules.

A version of this article appears in print on October 25, 2017 of The Himalayan Times.

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