Bad handPolitical parties shouldn’t use their sphere of influence to protect corrupt entrepreneurship
The Supreme Court finally issued a show cause notice to the government on Wednesday, asking it to clarify why it amended the Black Marketing and Some Other Social Offences and Punishment Act 1975. This comes after Advocate Jagannath Mishra had filed a writ in May 2016, accusing the government of wilfully being lenient towards black marketeers. While reforms in laws to support businesses would drive economic growth, amending laws to suit unscrupulous business practices would just allow black marketeers to continue exploiting the general public. The government cannot be allowed to amend laws to pave the way for political patronage, and public well-wishers such as Mishra should be applauded.
For a long time, representatives of the private sector have been urging lawmakers to amend or scrap laws that they deem anti-competitive or not being entrepreneurship friendly. As far back as April 2016, president of the Nepal Chamber of Commerce (NCC), Rajesh Kaji Shrestha, urged the government and lawmakers to amend parts of the Black Marketing Act that hold a harsh definition of profiteering. He highlighted the discrepancy between government run institutions such as the Nepal Oil Corporation being able to charge higher rates of profit without repercussions and private businesses being heckled for charging higher rates of profit to sustain their businesses.
As recent as November 9 this year, CNI president Hari Bhakta Sharma lamented that no thorough review of economic and business laws have occurred to make Nepal more investment friendly in the last 25 years. Foreign investors have stated that Nepal is a difficult place to invest, citing tough repatriation requirements and then need to employ middlemen to deal with bureaucracy. Nepal’s only dollar billionaire, Binod Chaudhary, lamented to The Kathmandu Post how he had to seek Non-residential status to grow his business, citing laws that do not allow Nepali companies to invest abroad. Though we agree that Nepal should reform business and investment laws to help fuel economic growth, the amendments to the Black Marketing Act by the government definitely does not help promote growth. In fact, these amendments only benefit unscrupulous businesspersons.
The then KP Oli-led government made amendments to the Act in 2015, with these coming into effect in February 2016. The amendments reduced the maximum jail sentences for offences such as profiteering, manipulating the supply of goods, cheating on quality and creating artificial shortages from between three and ten years to just one year. Black marketing activities such as manipulation of supply creates an artificial shortage of goods. In such cases, customers end up paying way over the real value of a good, thereby reducing their ability to purchase other essential goods. Manipulating the quality of products, such as adulteration of food, creates health hazards. According to constitutional provisions, cases dealing with punishment of one-year jail terms or less will be handled by Chief District Officers instead of courts. This would bring such cases directly under the influence of politicians.
It should be lauded that the SC is asking the government to clarify why they decided to amend the laws in a way that seems to blatantly favour seedy entrepreneurs that want to cheat on the quality of goods they sell or manipulate supply to raise prices.