Minister for Industry Shankar Prasad Koirala took the decision. The draft ordinance has been prepared in line with the Industrial Policy 2010 that incorporates various programs for the development and promotion of industrial sector.[break]
The proposed ordinance envisages legal framework for industrial development. It promises policy consistency as well as includes incentives for prioritized industrial sectors and special economic zones, and promotional packages for industries. It also aims to remove hurdles in industrial development.
Industry Secretary Krishna Gyawali told Republica that the ministry will register the ordinance in the cabinet on Tuesday. He further added that the ordinance, which replaces Industrial Enterprise Act 1992, will be a milestone in the promotion of the industrial sector and promotion and protection of investment in industries.
At present, the industrial sector contributes mere 15 percent to Gross Domestic Product (GDP) owing to factors like energy crisis, labor problems and lack of promotional packages and incentives by the government.
The cabinet had given the industry ministry go-ahead in July this year to submit the draft of ordinance with necessary preparations.
After receiving the cabinet nod, MoI consulted with Ministry of Finance and Ministry of Law and Justice, among other ministries, to finalize the draft of the ordinance. MoI also held comprehensive discussions with the stakeholders, including Federation of Nepalese Chambers of Commerce and Industries (FNCCI), before finalizing the draft.
Talking to Republica, Pashupati Murarka, vice president of FNCCI, said they were hopeful that the ordinance would be issued soon.
“We are hopeful that this landmark law will bring policy consistency which the industrial sector has long been demanding for,” Murarka, who was also involved in the draft preparation process, said. He further added that the industrial law should be made powerful than the annual financial acts.
The new ordinance proposes 90 percent exemption on income tax for prioritized industries, including cement factories and mine based industries, for seven years. Similarly, it proposes registering small scale industries at local bodies itself, introduce duty drawbacks to exporters through banks, and waiver of VAT and excise duty on products of small industries, among others, according to Murarka.
However, some officials are skeptic about early issuance of ordinance as the government has put its focus on Constituent Assembly (CA) election.
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