EDITORIAL: Inviting FDI
The bill, approved by the cabinet, has pledged to treat the FDI and domestic investors equally when it comes to dealing with subsidy and tax exemptions
The government has given the Department of Industry (DoI) more teeth when it comes to dealing with inviting foreign direct investment (FDI) in the country. A cabinet meeting held on Friday decided to amend the Foreign Investment and Technology Transfer Act (FITTA) and authorised the DoI to approve up to Rs. five billion in the form of FDI. Earlier, the ceiling was limited up to Rs. two billion and any FDI investment above the ceiling had to go through the Industrial Promotion Board chaired by the Industry Minister. However, the FDI investors are required to get approval of the Investment Board Nepal chaired by the Prime Minister if the amount reaches above Rs. 10 billion. A bill to this effect will come into force once it is passed by Parliament. Once the Act is amended the department will be able to act independently without looking for the concerned minister’s approval. Industry Minister Navindra Raj Joshi has said the cabinet decision to allow the DoI to approve investment up to Rs. five billion will strengthen the investment climate as the investors will not have to pass through various bureaucratic channels.
The government had held an investment summit in March to attract FDI in various sectors including energy, tourism, transportation, agriculture, infrastructure development, cement and aviation industry. Various countries had pledged to make investment to the tune of US$ 13 billion during the summit for which the investors had sought the government’s clear policy on FDI including the investment-friendly environment in financing, labour and repatriation of a certain amount of profit from the investment. Minister Joshi has said that FITTA had investment-friendly provisions which will be crucial to materialise the FDI pledges the country had received from various countries during the summit. However, the government can fix the upper limit of equity investment for service-oriented industries as per the rules of the World Trade Organisation. The FITTA has also welcomed the FDI in the secondary market and institutional investors can purchase shares of companies listed in the stock market. However, FDI is not allowed in traditional cottage industry, media, real estate, arms and ammunition and network.
The bill, approved by the cabinet, has pledged to treat the FDI and domestic investors equally when it comes to dealing with subsidy and tax exemptions. Such tax waivers will be given to FDI up to for five years from the date of operation of their businesses. This is a positive move initiated by the government to attract more FDI in the areas set by the government. The foreign investors will be able to reap maximum profit from their investment as the government has pledged regular supply of electricity and has also made reforms on labour issues and other legal barriers that were the bottleneck for foreign investment. They can also feel assured of their investment and repatriation of their profit as all major political parties have also pledged to create an investment-friendly environment, no matter which party may come to power. There are many virgin areas in which foreign investors can put in their money to do fair business providing jobs to the Nepalis and boosting the country’s export.
Since May 30 the Metropolitan Traffic Police Division (MTPD) have been taking action against jaywalkers by fining them Rs. 200 or detaining them for three hours to attend classes on road safety. No doubt the MTPD has resorted to this move in order to make it safer to commute in the capital city and also for pedestrians. According to records, most of the casualties are pedestrians and motorcyclists. As the pedestrians are permitted to cross the road only on zebra crossings we see that such crossings have disappeared and most of them have not been repainted.
However, there are complaints from many who use the road about being mistreated by some errant traffic police. They include OPD patients and elderly people. Kathmandu is not pedestrian friendly. There is much talk of providing lanes for bicycles but they have yet to be enforced. Meanwhile, the National Human Rights Commission expressed concern about the ‘humiliation’ of the pedestrians by the traffic police. Furthermore, they complain about the harassment by the traffic police on duty. This issue needs to be taken up and probed.