The Nepal Army, which is already facing widespread criticism for its increasing commercial activities, wants more legal leverage for the investment in profit making business.

The national defence force is particularly unhappy with the provision in Army Act 2006 that puts legal barrier for investment as a promoter. This has stopped it from investing in hydropower, banks and other business. Now, the NA leadership is knocking on the door of Defence Ministry and political leadership for the revision in the Act opening its door for investment as promoter.

Unhappy with the interest it is making from the deposit of billions of rupees of Nepal Army Welfare Fund (NAWF) in different commercial and development banks, it wants to put the money where the return is high. Brig Gen Raghu Bhandari director of NAWF told the media on Wednesday that the Army has already started homework for a revision in the existing Act. “The existing Act stops us for investment as promoter which is posing a barrier in widening the investment,” he told in a press meet. “The investment will be focused in earning to support the welfare activities for incumbent and retired army personnel.”

The NAWF currently has a cash deposit of Rs 35.77 billion while has investment worth Rs 5.52 billion in different sectors. With the current deposit, it wants to invest in two hydro projects and in Treasury bill which it expects will give more return than the interest banks are paying. It has proposed Department of Electricity Development to build 25 MW Dudh Khola and 32 MW Bhimdang Khola hydropower projects even before amendment in the Act.  Among two Manang based projects, the department is positive to grant Bhimdang Khola for the investment.

Security experts say there should be a clear demarcation of where Army can investment and where not. They say the national defence force should focus on producing the things that it needs rather than getting engaged in other commercial activities. The money it has can be used in manufacturing arms or and ammunition, producing clothes and other necessary items the Army needs. “This is the right time we set such demarcations,” Security Expert Dipak Prakash Bhatta, also a member of House of Representatives, told the Post. He said there will be a thorough discussion on the issue once the proposal for the amendment in the Act lands in the House.

The amendment to the Act needs to be first approved by the Cabinet before getting endorsed by the federal parliament.

Bhatta says the Army which is the last resort for the security shouldn’t be involved in the activities that bring it into controversy. Its move to lease the historical Tri-Chandra Military Hospital for business, running petrol pumps in different parts of the country and selling plotted lands to its staff have been dragged into controversy, saying the focus of state defence force is gradually shifting towards making money.

The NA’s engagement in the commercial activities is sure to increase if there is an amendment in the Act as per its will.