The government has announced that it’ll increase investments to help institutes involved in research and development sectors.

“The government has allocated one percent of the annual capital expenditure for research and development,” announced Finance Minister Barsha Man Pun while presenting the budget in Parliament on Tuesday. “Investments will be increased in the institutes involved in research and development.”

While presenting the budget for the fiscal year 2024-25, Pun announced an annual capital expenditure of Rs352 billion in his budget presentation for the upcoming fiscal year. As per the policy of earmarking one percent of the government’s annual capital expenditure for research and development, the sector will get Rs3.52 billion.

Following a days-long protest last year, the government had reached an agreement with Mahabir Pun, chairman of the National Innovation Centre, and pledged to allocate one percent of its annual capital expenditure for the promotion of the country’s research and development sector.

“Government last year had signed an agreement with us to allocate one percent of annual capital expenditure for the innovation and research works,” Pun, who is currently in Nawalparasi to sell his biography to collect money to operate his innovation centre, told the Post over the phone. “If the government has allocated this sum of money, it is a positive initiative.”

Last year, then-deputy prime minister and minister for defense Purna Bahadur Khadka signed a seven-point agreement with Pun. When Pun started his protest last year, many people, including civil society members, leaders from various political parties and the general public had reached Maitighar to express their solidarity to his movement.

Immediately after signing the agreement, Pun had told the Post that they ended the protest as the government committed to allocate at least one percent of the annual development budget to support innovation and research work.

Before beginning his sit-in in May 2023, the 2007 Magsaysay Award winner had met leaders and top officials, including Prime Minister Pushpa Kamal Dahal, and nearly half a dozen ministers, in order to convince them to take some concrete initiatives to promote innovation in the country.

Finance Minister Pun has also announced that the government will establish a Rs1 billion research and development fund for the upcoming year.

Meanwhile, the people who have been involved in the start-up and innovation sectors are not very optimistic regarding the budget. For the last five years, every budget has pledged to promote the start-up businesses and innovation sector. However, the government has done nothing viable to support the people involved in the field, said those active in the sector.

“The budget presented last year had mentioned the tax refund for the start-up. However, the actual plan of the government could not reach the real start-up business,” Kavi Raj Joshi, founder and managing director of the start-up company Next Venture Corp, told the Post. “Let’s hope this initiation taken by the government through the budget is implemented soon.”

Joshi says that the government acknowledging the information and technology sector is in itself a positive thing.

The government in the budget also envisioned establishing Nepal as a hub of information and technology.

The government has an ambition to export IT-related goods and services worth Rs3 trillion in the next ten years and aspires to create direct jobs for half a million and indirect employment for one million people in the sector.