Budget promises to promote industrial climate, attract FDI
KATHMANDU, July 16:
The Rs 384.90-billion budget for the fiscal year 2011/12 that Finance Minister Bharat Mohan Adhikary unveiled Friday has taken some noticeable steps to improve industrial climate and revive the confidence of exporters.
For the first time the government has introduced the concept of ´special and information technology industry´ as a group to provide them with income-tax exemptions for employing a relatively large number of people.
Income tax exemption of 90 percent will be given to any of the special and information technology industry employing 300 or more Nepalis. Similar income-tax exemption of 80 percent will be given to any special industry employing 1,200 or more Nepalis directly. An exemption of 80 percent in the income tax will be given to any special industry which employs more than 100 Nepalis with at least 33 percent of them women, untouchable and differently-abled persons.
Special package programs have been announced for industries in special economic zones (SEZs). A cent-percent exemption of income tax for ten years from the establishment and then 50 percent in the following years will be given to industries established in SEZs in hilly and mountainous regions.
Similarly, for industries in other SEZs, the government has offered a cent-percent income tax exemption for five years and 50 percent in the following years.
The budget has also introduced special incentives to promote exploration of natural gas and petroleum products.
"Companies or individuals will be provided cent-percent exemption of annual income tax for seven years and 50 percent of exemption will be given to them in the following three years," the budget provided.
In order to encourage exports of local products, income tax exemption of 25 per cent will be given to any export products manufactured in the country.
"Any industry producing brandy and wine out of fruits and established in the undeveloped region of the nation will be provided 40 percent exemption in income tax for 10 years," added the Economic Bill 2011.
The budget has declared industrial estates as peace zones and provides for deployment of security personnel to ensure peaceful operation of industries. Though industrialists are thanking the government for declaring industrial zones as peace zones, they expressed doubt over the government´s sincerity in implementing it.
"Following repeated chaos inside industrial estates, the government had announced to maintain peace, security and order so may times, but in vain," said Bhaskar Raj Rajkarnikar, senior vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
The budget has also announced several packages to attract foreign direct investment (FDI) in the nation.
"In order to attract foreign investment in the industries having comparative and competitive advantage, an international investment forum will be held in the next fiscal year," said Finance Minister Bharat Mohan Adhikary while presenting the budget.
At the same time, the budget has announced to expand the Youth Self Employment Program as a national campaign in collaboration with the government, cooperatives and the private sector.
A collateral-free loan facility up to Rs 200,000 per person has been introduced for the economically-backward classes, women, dalit, indigeneos and unemployed youths to run their own business.
The government has laid stress on creating a conducive environment for cooperatives and the private sector to expand citizen´s access to employment opportunities. To ensure the employment to all youth, the government has promised to formulate and implement Employment Guarantee Act.
What the budget means for...
Education
With primary focus on education, the government has allocated Rs 63.91 billion -- 16.6 percent of the total budget -- to the educational sector.
The budget has been proposed with a view to providing free education to girl students of community schools, Dalits and disabled students up to grade eight. The government also plans to provide free textbooks up to grade 12.
Under the budget for fiscal year 2011/12, arrangements have been made to provide mid-day meal to all students of the community schools of Karnali zone giving continuity to the scheme carried out last year.
Open University programs will be brought into implementation with the objective of increasing enrolments in higher education.
The government plans to build pilot education village with adequate infrastructure and quality education to attract students from neighboring countries.
Targeting the rural girl students of the far-east region, the government has allocated Rs 10 million for the construction of Madan Memorial Nursing Campus and an additional Rs 10 million for the construction of Martyr´s Memorial Academy in Jhapa.
The government will take initiatives to establish medical colleges in each of the development regions. Under this policy, medical college affiliated to Tribhuvan University will be established in Butwal of western region and Surkhet of mid-western region.
Health services
The health service sector has been allocated Rs 27 billion in the proposed budget. The primary focus of the government would be to provide easy access to health services in the rural areas for senior citizens, children and women.
Presenting the budget on Friday, Finance Minister Bharat Mohan Adhikari said 500 sub-health posts will be upgraded to health posts. The government has already upgraded 1,000 sub-health posts to health posts in 2010/11. Adhikari further said that the new health policy will ensure health services as the fundamental right of citizens.
The government plans to bring special programs for the increased participation of cooperative institutions in the health sector. The government further plans to make “Village Clinic Program” more effective with diagnostic service at all levels.
The government has planned to develop Bhaktapur Hospital as a well-equipped hospital for human organ transplantation and bring trauma center at Bir Hospital into operation. Further, the government has also unveiled packages for Women´s Health Improvement, Integrated Child Health Management, Model Health Village, among others.
Tourism
The government has also decided to develop Nepal as a model tourism country within 15 years. It has for the first time allocated budget focusing on specific tourism destinations in each region.
The government has also proposed to develop physical infrastructure for promotion of tourism in 17 destinations, including Khaptad-Manaslu, Lumbini, Ruru Resunga and King Birat´s palace in Biratnagar, among others.
The budget focuses on integrated development of mid and far-western regions under which government has unveiled its development programs for places such as Shey-Phoksundo and Rara Lake.
The government has also allocated budget to make air transport regular, safe and accessible for the people of remote areas. The government has decided to start construction of second international airport in Nijgadh, Bara district.
It further plans to build the proposed airport in Lumbini and develop airports in Pokhara, Janakpur and Surkhet as regional cum international airports. Besides, the airports in Biratnagar, Nepalgunj and Dhanghadhi will be developed as regional hubs and those in Rajbiraj, Danga and Phaplu will be upgraded.
IT and Communication
The government plans to develop necessary infrastructure for availability of broadband internet and telephone services in all villages. Sharing of infrastructure in telecommunication, radio, television and internet services to maximize coverage at minimal operational cost is the other priority of the government. Further, the government plans to utilize the IT Park in Banepa to develop information technology industries through Public-Private Partnership.
Agriculture
Commercialization of agriculture by encouraging farmers through subsidies is the primary focus the budget. The government has allocated Rs 12.43 billion with the aim of attaining self-sufficiency in agricultural production within next three years.
The government has proposed Rs 3 billion for subsidies in chemical and organic fertilizers. The subsidy has been arranged for the establishment of laboratories, production of pesticides and seeds and packing in places including Rukum and Rolpa.
The budget proposes credit facility at low interest rates to people involved in livestock, poultry and fish farming. Further, the government plans to set up cold storage and animal breeding centers in all development regions.
Infrastructure development
Under infrastructure development, the budget mainly focuses on constructing blacktopped roads and improving the existing ones. The government has also allocated necessary budget for Kathmandu-Tarai expressway. The government has allocated Rs 4.98 billion for the construction of bridges and postal highway.
Energy
A high priority is given to the energy sector by the new budget. Hydropower Development and Investment Company with paid up capital of Rs eight billion, has already been registered. The government is planning to mitigate energy crisis for carrying out different projects in the energy sector.
A master plan on hydropower development is going to be prepared in this year. A study will be started from next year that will access the total hydropower generating capacity. Cooperatives have been encouraged to operate Micro Hydro Electricity Project. The government is planning to make the licensing for the hydropower scientific and transparent. Additional facilities are going to be provided to those who will establish a hydropower project during the energy emergency period.
The government is also planning to make necessary policies for land acquisition and planned resettlement and implement them. Budigandaki Project will be implemented by a special committee. Special arrangements for Tamakoshi Hydropower Project are being made. Construction of other hydropower projects will be accelerated by the government. The government also plans to reform Nepal Electricity Authority. All street lamps are going to be transformed into lead lamps or solar lamps.
Source: Republica
The Rs 384.90-billion budget for the fiscal year 2011/12 that Finance Minister Bharat Mohan Adhikary unveiled Friday has taken some noticeable steps to improve industrial climate and revive the confidence of exporters.
For the first time the government has introduced the concept of ´special and information technology industry´ as a group to provide them with income-tax exemptions for employing a relatively large number of people.
Income tax exemption of 90 percent will be given to any of the special and information technology industry employing 300 or more Nepalis. Similar income-tax exemption of 80 percent will be given to any special industry employing 1,200 or more Nepalis directly. An exemption of 80 percent in the income tax will be given to any special industry which employs more than 100 Nepalis with at least 33 percent of them women, untouchable and differently-abled persons.
Special package programs have been announced for industries in special economic zones (SEZs). A cent-percent exemption of income tax for ten years from the establishment and then 50 percent in the following years will be given to industries established in SEZs in hilly and mountainous regions.
Similarly, for industries in other SEZs, the government has offered a cent-percent income tax exemption for five years and 50 percent in the following years.
The budget has also introduced special incentives to promote exploration of natural gas and petroleum products.
"Companies or individuals will be provided cent-percent exemption of annual income tax for seven years and 50 percent of exemption will be given to them in the following three years," the budget provided.
In order to encourage exports of local products, income tax exemption of 25 per cent will be given to any export products manufactured in the country.
"Any industry producing brandy and wine out of fruits and established in the undeveloped region of the nation will be provided 40 percent exemption in income tax for 10 years," added the Economic Bill 2011.
The budget has declared industrial estates as peace zones and provides for deployment of security personnel to ensure peaceful operation of industries. Though industrialists are thanking the government for declaring industrial zones as peace zones, they expressed doubt over the government´s sincerity in implementing it.
"Following repeated chaos inside industrial estates, the government had announced to maintain peace, security and order so may times, but in vain," said Bhaskar Raj Rajkarnikar, senior vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
The budget has also announced several packages to attract foreign direct investment (FDI) in the nation.
"In order to attract foreign investment in the industries having comparative and competitive advantage, an international investment forum will be held in the next fiscal year," said Finance Minister Bharat Mohan Adhikary while presenting the budget.
At the same time, the budget has announced to expand the Youth Self Employment Program as a national campaign in collaboration with the government, cooperatives and the private sector.
A collateral-free loan facility up to Rs 200,000 per person has been introduced for the economically-backward classes, women, dalit, indigeneos and unemployed youths to run their own business.
The government has laid stress on creating a conducive environment for cooperatives and the private sector to expand citizen´s access to employment opportunities. To ensure the employment to all youth, the government has promised to formulate and implement Employment Guarantee Act.
What the budget means for...
Education
With primary focus on education, the government has allocated Rs 63.91 billion -- 16.6 percent of the total budget -- to the educational sector.
The budget has been proposed with a view to providing free education to girl students of community schools, Dalits and disabled students up to grade eight. The government also plans to provide free textbooks up to grade 12.
Under the budget for fiscal year 2011/12, arrangements have been made to provide mid-day meal to all students of the community schools of Karnali zone giving continuity to the scheme carried out last year.
Open University programs will be brought into implementation with the objective of increasing enrolments in higher education.
The government plans to build pilot education village with adequate infrastructure and quality education to attract students from neighboring countries.
Targeting the rural girl students of the far-east region, the government has allocated Rs 10 million for the construction of Madan Memorial Nursing Campus and an additional Rs 10 million for the construction of Martyr´s Memorial Academy in Jhapa.
The government will take initiatives to establish medical colleges in each of the development regions. Under this policy, medical college affiliated to Tribhuvan University will be established in Butwal of western region and Surkhet of mid-western region.
Health services
The health service sector has been allocated Rs 27 billion in the proposed budget. The primary focus of the government would be to provide easy access to health services in the rural areas for senior citizens, children and women.
Presenting the budget on Friday, Finance Minister Bharat Mohan Adhikari said 500 sub-health posts will be upgraded to health posts. The government has already upgraded 1,000 sub-health posts to health posts in 2010/11. Adhikari further said that the new health policy will ensure health services as the fundamental right of citizens.
The government plans to bring special programs for the increased participation of cooperative institutions in the health sector. The government further plans to make “Village Clinic Program” more effective with diagnostic service at all levels.
The government has planned to develop Bhaktapur Hospital as a well-equipped hospital for human organ transplantation and bring trauma center at Bir Hospital into operation. Further, the government has also unveiled packages for Women´s Health Improvement, Integrated Child Health Management, Model Health Village, among others.
Tourism
The government has also decided to develop Nepal as a model tourism country within 15 years. It has for the first time allocated budget focusing on specific tourism destinations in each region.
The government has also proposed to develop physical infrastructure for promotion of tourism in 17 destinations, including Khaptad-Manaslu, Lumbini, Ruru Resunga and King Birat´s palace in Biratnagar, among others.
The budget focuses on integrated development of mid and far-western regions under which government has unveiled its development programs for places such as Shey-Phoksundo and Rara Lake.
The government has also allocated budget to make air transport regular, safe and accessible for the people of remote areas. The government has decided to start construction of second international airport in Nijgadh, Bara district.
It further plans to build the proposed airport in Lumbini and develop airports in Pokhara, Janakpur and Surkhet as regional cum international airports. Besides, the airports in Biratnagar, Nepalgunj and Dhanghadhi will be developed as regional hubs and those in Rajbiraj, Danga and Phaplu will be upgraded.
IT and Communication
The government plans to develop necessary infrastructure for availability of broadband internet and telephone services in all villages. Sharing of infrastructure in telecommunication, radio, television and internet services to maximize coverage at minimal operational cost is the other priority of the government. Further, the government plans to utilize the IT Park in Banepa to develop information technology industries through Public-Private Partnership.
Agriculture
Commercialization of agriculture by encouraging farmers through subsidies is the primary focus the budget. The government has allocated Rs 12.43 billion with the aim of attaining self-sufficiency in agricultural production within next three years.
The government has proposed Rs 3 billion for subsidies in chemical and organic fertilizers. The subsidy has been arranged for the establishment of laboratories, production of pesticides and seeds and packing in places including Rukum and Rolpa.
The budget proposes credit facility at low interest rates to people involved in livestock, poultry and fish farming. Further, the government plans to set up cold storage and animal breeding centers in all development regions.
Infrastructure development
Under infrastructure development, the budget mainly focuses on constructing blacktopped roads and improving the existing ones. The government has also allocated necessary budget for Kathmandu-Tarai expressway. The government has allocated Rs 4.98 billion for the construction of bridges and postal highway.
Energy
A high priority is given to the energy sector by the new budget. Hydropower Development and Investment Company with paid up capital of Rs eight billion, has already been registered. The government is planning to mitigate energy crisis for carrying out different projects in the energy sector.
A master plan on hydropower development is going to be prepared in this year. A study will be started from next year that will access the total hydropower generating capacity. Cooperatives have been encouraged to operate Micro Hydro Electricity Project. The government is planning to make the licensing for the hydropower scientific and transparent. Additional facilities are going to be provided to those who will establish a hydropower project during the energy emergency period.
The government is also planning to make necessary policies for land acquisition and planned resettlement and implement them. Budigandaki Project will be implemented by a special committee. Special arrangements for Tamakoshi Hydropower Project are being made. Construction of other hydropower projects will be accelerated by the government. The government also plans to reform Nepal Electricity Authority. All street lamps are going to be transformed into lead lamps or solar lamps.
Source: Republica
