Study highlights need for clarity in regulatory provisions
Kathmandu, May 15
Lack of clarity between the federal and provincial governments in terms of regulating the banks and financial institutions, labour market, industries, corporate and corporations could adversely affect private sector growth in the future.
A study carried out by an independent research organisation - Samriddhi Foundation - has said that clarity in regulatory provisions and jurisdiction among federal, provincial and local governments is a must to leverage the benefits from federalism.
Along with the aforementioned three areas, jurisdiction of the federal and sub-national governments must be identified for promotion and facilitation of agriculture and tourism sectors. These five key areas, which are considered as the drivers of growth, should be given priority for the larger benefit of the country.
There is no clear differentiation between federal and state governments' scope of powers in the operational policy of banks and financial institutions, which means that the financial institutions could also be regulated through the provincial central bank, as per the study. “On the other hand, legislation governing co-operative sector and non-NRB-controlled financial institutions is still lacking.”
In the study dissemination programme organised by the Samriddhi Foundation, former finance secretary Rameshwore Khanal said that the banks and financial institutions should be regulated through the central bank and there should not be separate central banks of the provinces.
He, however, pointed out that the provinces should be given the right to certify the professionals like that being done by Nepal Bar Council, Nepal Medical Council and Institute of Chartered Accountants of Nepal (ICAN) to fulfil the requirement of qualified human resources in the provinces.
The study has highlighted the possibility of an unjust federal pavilion controlling trade unions and an inhospitable employee-employer relation due to political inference if the regulatory rights are not delegated to provinces. It has also highlighted the need for localised skill development policies to improve the human resources capacity of the country.
Likewise, equal treatment must be ensured for public and private enterprises through same laws to prevent anti-competitive practices. The report has underscored the need to amend earlier business laws and reflect responsibilities of all orders of government, thereby reducing federal dominance.
Similarly, it has stressed on the need for clear roles and exact scope of responsibilities amongst the three layers of the government to end the inter-jurisdictional conflict in promotion and facilitation of agriculture and tourism sectors.
The report has also underscored the need of de-concentration of federal agencies or creation of agencies at sub-national levels to help facilitate economic activity in the sector. “An umbrella act addressing the issues of inter-state tourism, especially in the case of trekking and mountaineering, which have spillover effects, is currently non-existent in the country.”