Lawmakers slam confusing provisions in investment billConfusing provisions in the bill to amend the Foreign Investment and Technology Transfer Act will not help to increase foreign investment despite its stated purpose to do so, lawmakers said on Thursday.
Confusing provisions in the bill to amend the Foreign Investment and Technology Transfer Act will not help to increase foreign investment despite its stated purpose to do so, lawmakers said on Thursday.
The government moved to revise a number of laws, including the Foreign Investment and Technology Transfer Act in the run-up to the Investment Summit 2019 slated for March 29, in a bid to create a more welcoming environment as investment pledges made during similar previous summits did not materialise.
Lawmakers slammed the bill even as the government tried to rush it through Parliament before the start of the summit. Their main criticism was that it talked about providing a one-stop solution, but potential investors need to obtain permission from various government agencies including the Ministry of Industry, Nepal Rastra Bank and Investment Board Nepal.
Speaking at a meeting of the parliamentary Industry, Commerce, Labour and Consumer Welfare Committee, Member of Parliament Gagan Thapa expressed doubts that the proposed legislation would help to increase investment from domestic and foreign sectors.
“Non-resident Nepalis and diplomatic missions, who play a major role in encouraging foreign investment in the country, have expressed scepticism about the so-called simplified laws,” said Thapa.
According to him, the act, if implemented in its present form, will put off domestic investors.
“It allows foreign investment in primary sectors including agriculture and cottage and small industries, and this will discourage domestic investors from putting their money in these sectors,” Thapa said. Foreign capital has been barred only in the poultry business in the farming sector. The bill also talks about allowing foreign investment in previously out-of-bounds service businesses such as education consultancy and computer training, among others.
Lawmaker Yashoda Subedi raised concerns over the government’s failure to include goods in the negative list for foreign investment. “In this regard, even though there is a separate regulation in place, the government has completely ignored the existing framework of negative lists,” Subedi said.
Lawmakers also questioned why the government had delisted goods that the Ministry of Agriculture had put in the negative list. “The draft act that was approved by the Law Ministry had poultry, fishery and bee keeping in the sensitive list, but the last two were later removed,” said the lawmaker Rekha Sharma.
According to government statistics, the country’s milk production has increased around 50 percent in the last eight years. Milk production reached 2,115 tonnes in 2017 from 1,497 tonnes in 2010, the Ministry of Agriculture and Livestock Development said. Over the same period, fish output surged from 640,000 tonnes to 1.53 million tonnes.
Finance Minister Yuba Raj Khatiwada said the government had decided to allow foreign investment considering the entire supply chain of primary businesses. “The government has been pouring a lot of money into subsidising major farm products, but productivity is still low,” Khatiwada said. “Farm products have failed to secure markets, and the government has sought to correct this by involving both domestic and foreign sectors.”