KATHMANDU: Hard to believe, but it is true and happening in Nepal. The government is providing land for industrial purpose thousand-fold cheaper than market rates. Industrial District Management (IDM) Ltd is providing one ropani of land for a lease amount of Rs 275 per month in Patan Industrial District.

According to IDM, the industrial district concept was developed to boost industrial growth in the 1970s and IDM is providing land with basic facilities — road, electricity, water and sanitation — for industries.

Land lease rates have not been revised since 1997 so the entrepreneurs of Patan

Industrial District are paying just Rs 3,300 yearly for a ropani while the surrounding market price is in millions.

Market rate of lease of a ropani of land was Rs 8,000 per month in 2006 and it has grown six-fold in the last four years. IDM cannot pay lease tax

from the earnings as the government has already adopted a taxation policy for industrial land. IDM is earning Rs 20 million by leasing out 4,000 ropanis of land in the industrial districts throughout the country.

IDM is reluctant to adjust the lease amount based on market price since the last 13 years. “IDM is not adjusting the lease rates as it wants to boost industries,” said Surendra Thapa, general manager. But the performance of industries based in industrial districts does not reflect it. Entrepreneurs

in industrial districts are

blaming the government for poor infrastructure.

Like Patan Industrial District, land lease rate in Balaju and Pokhara industrial district is also cheaper than the market rate. IDM is providing land in Balaju industrial district at Rs 5,000 per year (Rs 416 per month for a ropani) and in Pokhara at Rs 2,500 per year (Rs 208 per month for a ropani).

IDM is a government entity with investment of Rs 10 million and Rs 120 million from Nepal Industrial Development Corporation (NIDC) and the government, respectively. Around 564 industries have leased land in industrial districts. Of them, 64 industries have shut down.