Private sector seeks changes in existing laws
Kathmandu, November 8
Private sector representatives have urged the government for prompt revision of over two dozen acts, which have been creating numerous hassles to improve the investment climate.
Out of 26 acts that are related to business and industries, Confederation of Nepalese Industries (CNI) has urged the government to repeal three laws citing that the state actors often embarrass the private sector on the basis of the provision of the half-century-old laws. CNI has asked the government to scrap the act that prevents outbound investment, act related to black marketing and export-import control act.
“For instance, the Black Market and Some Other Social Offences and Punishment Act prevents businesses from generating profit over 20 per cent of the cost price and this provision is often used to embarrass traders in the name of market monitoring,” said Hari Bhakta Sharma, president of CNI. “Such laws, which are very old, have no rationality and are only being used as tools to humiliate private sector players.”
Speaking at a workshop titled ‘Laws Reform for Industry and Investment Promotion’ organised by CNI jointly with Nepal Media Society in the Capital today, representatives of the private sector expressed solidarity to put pressure on the government to amend the acts so as to contextualise them.
Private sector leaders expressed disappointment over the delay in amending laws and rules, which are obstructing potential investment.
“Most of the existing laws neither provide protection to consumers nor encourage the private sector,” said Sharma. “In the last 25 years, there has not been any thorough review of laws related to businesses or the economy so as to promote industries and investment even though the country has witnessed a profound change on the political front.”
Sharma also laid emphasis on need to merge some laws and reduce number of acts in place as often provisions of one act contradict with those of another. According to him, 56 various laws related to business and manufacturing should be consolidated and unified to bring the number down to five to six.
Another law that CNI has asked the government to scrap is the one that restricts investment abroad, which is outdated, as per Pashupati Murarka, immediate past president of Federation of Nepalese Chambers of Commerce and Industry. “In the era of globalisation, firms have their own expertise and their market may have saturated in the country so they need to be provided a window to expand their businesses abroad.”
Also speaking at the workshop, Shankar Prasad Sharma, former chairman of National Planning Commission, said that timely review and revision of legal instruments is a must for the economic development of the country. “There is competition across the globe to provide incentives to investors and even neighbouring India has been welcoming investors on a red carpet under its ‘Make in India’ campaign,” he said.
“We will lose the opportunity to tap investment and encourage domestic investors for further investment if the initiative to amend laws in not taken up promptly,” stated Shankar. Highlighting that amendments to laws to contextualise them is a major prerequisite to bring about economic reforms, he urged the government to take prompt initiative to fulfil the country’s desire to be a vibrant economy in the near future.
He, however, said that the private sector also has the responsibility to promote competition by ending cartel system that is distorting the market, particularly the cartel in trucking and transportation.
Pawan Kumar Ojha, a former Supreme Court judge, laid emphasis on the establishment of an effective institution to undertake periodic updates and reviews in the country’s laws. “Acts formulated a long time back in a different scenario do not fit all the time. The legal regime should be dynamic and friendly to investors,” he asserted.
ACTS AND RULES THAT CNI WANTS REVIEWED AND REVISED
Act Restricting Investment Abroad
Essential Commodities Control
Black Market and Some Other Social Offences and Punishment Act
Consumer Protection Act
Industrial Enterprises Act
Competition Promotion and Market Protection Act
Excise Duty Act
Revenue Leakage (Investigation and Control) Act
Banking Offence and Punishment Act
Recovery of Debts Due to BFIs Act
Value Added Tax Act
Money Laundering Prevention Act
Land Acquisition Act
Income Tax Act
Public Procurement Act
Public Procurement Regulation
Export and Import (Control) Act
Patent Design and Trademark Act
Anti-Dumping Law (not yet in place)
Environment Protection Regulation