The economics policies and reforms of Nepal.

1. PRIVATIZATION

5.  Privatization can refer to the act of
transferring ownership of specified
property or business operations from a
government organization to a privately
owned entity.

6.  Nepal launched initial privatization program
in mid eighties. Privatization policy can be
traced back to the Sixth Plan(1980-85) which
was continued to the Seventh Plan (1985-90).
It was in the Eighth plan (1992-97) during
which it took concrete shape.

7.  The policy of privatization in Nepal was
specified for the first time in 6th plan. A
privatization cell was created in 1989 in
ministry of finance to plan and implement
the privatization program. The legal
provision to implement privatization policy
are contained in privatization act 1994.

8.  To increases the productivity through the
enhancement of the efficiency of the state-
owned enterprises
 To mitigate the financial and administrative
burden to the government, and
 To achieve the all round economic development
of the
country by promoting wider participation of the
private sector in the operation of such
enterprises

9.  The main features of this act is as follows
 1.) Formation of private committee:
 A private committee should be formed under
chairmanship of ministry of finance to
organize the privatization of enterprises.

10.  To recommend the programs and priorities of
privatization to govt.
 To conduct study or research in order to
formulate private programs
 To remove hindrance faced in privatization
programs and maintains coordination.
 For privatization of enterprise, the committee
shall appoint a team of National experts and
foreign experts .

11.  If the govt. seems necessary to private
enterprise, it shall publish notice to this
effect in the Nepal gazette.

12.  The govt. may privatize any enterprise by any or
all of the following processes:
 By sales of shares of the enterprises to the
general public, employees, workers. Any person
or company interested in the mgmt. of such
enterprise.
 By formation of cooperatives
 By selling of assets of the enterprises.
 By leasing out the assets of the enterprise.
 By involving private sector in the mgmt. of
enterprise.
 By adopting any other modalities consider
appropriate by the govt on the basis of the
recommendation of the committee.

13.  The govt. shall invite proposal relating to the
privation by publishing a notice in a national
newspaper giving necessary details of such
enterprises.

14.  The committee shall evaluate the proposals
received on the following basis:
 Attractive price.
 Managerial experience.
 Expansion of business and enterprise by a
good business plan and making additional
investment.
 Priority shall be given to Nepali investor is
the proposal of two or more investors are
found to be identical.

15.  Proper handling over an enterprise an
agreement shall be entered specifying the
term and condition. The terms of payment
and time schedule for handling over the
enterprise and other terms and condition
shall be clearly specified in the agreement.

16.  Disputer shall be resolved through mutual
consultation among consult parties
attribution.

17.  The govt. may ensure the continuity of
service of the present workers of the
enterprise to be privatized .If the continuity
of services could not be maintained, on the
recommendation of committee; govt. may
retire such employee and workers. While
retrenchment is granted, the govt. shall
arrange reasonable compensation for the
benefits for employees and workers.

18.  (i) Share-sales:
Share-sales privatization is called share issue
privatization. In this method of privatization,
share of public sector undertaking firms or
organization sales on the stock market.
eg. Nepal telecom company, Nepal lube oil Ltd.
 (ii) Management Contract:
Management in public sector undertaking is
political the management of Rashtriya Banijiya
Bank and Nepal bank limited was contract out
to foreign consultant for some time.
eg. Biratnagar jute mills company Ltd.

19.  (iii) Lease:
By leasing out the assets of the enterprise the
government may PVT any enterprise.
eg. Bhaktapur brick factory,Lumbini sugar
factory etc.
 (iv) Assets and Business sale:
It is a process of privatization in which the
process of selling of entire org or part of it. To
a strategic investor usually by auction .
e.g. – Bhrikuti paper factory , Harisiddhi brick
& tile factory , Bansbari leather shoe factory .

20.  (v) Voucher privatization:
 In this method of privatization share of
ownership distributed to all citizen usually
for free or at a very low price.
 Eg. Himal cement industry, Tobacco Dev.
Co. , Birganj sugar factory etc.

21.  A Privatization Cell was created in 1989 in
the Ministry of Finance. The legal provisions
to implement privatization policy are
contained in Privatization Act, 1994.
 According to the Act, the Privatization
Committee shall conduct studies, evaluate
the enterprises, remove hindrances faced in
privatization, formulate privatization
programs, and recommend the scheme to the
government for execution.

22.  As many as 14 public enterprises were privatized
within a span of six years covering the period
from 1992 to 1998 in three different phases:
three in the first phase, five in the second, and
six more in the third phase.
 Some of the important government
organizations in Nepal which are privatized
include Bhirkuti Paper Factory (1992), Nepal Film
Industry Ltd. (1993), Tobacco Dev. Co. (1994),
Nepal Bank Ltd. (1997), Nepal Tea Dev. Corp.
(2000), Himal Cement Ind. Ltd. (2002), Birganj
Sugar Factory(2003), Nepal Telecom Company
(2008).

23.  • Up to the end of 2012, thirty govt.
enterprises have been privatized. However,
the deteriorating condition of the privatized
ventures indicates that mere private sector
cannot show any magic.

24.  Benefits
 Disbenefits

25. • The best way to rebuild weakened Public
sectors.
 • Stops loss making public sector from adding
to government debt.
 • Raises more money for government through
taxing.
 • Expands an enterprise and an industry.
 • Creates more jobs and generating wealth
for the country.

26.  • Ownership to a privileged few
 • Restructuring
 • Social Safety Net
 • Managing the Process
 • Laborers would be at the mercy of the
private owners
 • Loss of experienced managerial expertise
 • Short-term gain, Long-term loss

27.  Vision
 Enable the tourism sector to develop as an
important segment of the national economy,
which could contribute significantly in
economic growth, employment generation
and poverty alleviation.

28.  To develop the tourism sector as a major
segment of the national economy
 Development of tourism related
infrastructures
 Promotion diversification and expansion of
tourism
 Employment and improvement in the living
standard of the people.

29.  Through tourism promotion in feasible
tourism markets, the image of Nepal will be
re-established.
 By giving high priority, the tourism sector will
be developed as the foundation of the
economy.
 By considering regional balance as well,
diversification and expansion of the tourism
sector will be carried out.

30.  Through rural tourism, the tourism sector
will be developed, so as to contribute in
raising the living standard of the people.
 In order to develop capable and professional
human resources in the sectors of culture,
tourism and civil aviation, institutional
strengthening of the concerned training
institutes will be carried out.

31.  Special tourism promotion programs will be
launched, targeting neighboring countries like
India and China.
 An integrated tourism infrastructure
development program will be launched.
 Necessary initiatives will be taken to involve the
Nepal Tourism Board, Development Committees
and various organizations, in the development of
tourism infrastructure and in addition to
publicity works.
 Using modern information technology and
equipments, tourist services will be further
enhanced.

32.  Youth, backward groups, castes or religion,
the poor and women will be encouraged with
priority to get involved in tourism related
awareness and employment generation
programs and training and skill development
programs.
 In order to rehabilitate the hotels that went
to be sick due to the unavoidable
circumstances, rehabilitation programs will
be launched and subsidy, discount or other
support will be provided .

33.  Environment-friendly tourism activities will
be promoted, and while searching for new
possibilities in eco-tourism .

37.  Monetary Policy for 2016/17 aims at
containing annual average CPI Inflation at
7.5%
 Monetary policy is geared to facilitating the
economic growth rate of 6.5 percent.
 The broad money, as an intermediate target
of monetary policy, is projected to increase
by 17 percent in 2016/17.
 The monetary policy set the target of
internal credit growth rate of 25 percent and
the private sector credit is projected to grow
by 20 percent.

38.  Nepali foreign currency account holders
allowed to purchase goods and services
worth & 15000 per year from abroad.
 Interest spread for microfinance institution
fixed at 7 percent.
 Commercial banks directed to channel 15
percent of total loans towards agriculture
and energy sectors from 12 percent

39.  Investors interested in building luxury hotels
in underdeveloped tourist destinations sucha
as Pathibhara, Mai Pokhari, Halesi, Langtang,
Swargadwari, Upper Mustang, Gadimai,
Janakpurdham, Rara and Khaptad to be
provided refinancing facility at 4 percent.

40.  Over Rs. 3 million of financial transactions to
be conducted through Cheques, previous
ceiling stood at Rs. 5 million.
 Microfinance development banks directed to
raise minimum paid-up capital to Rs. 600
Million within mid-july ,2018.

43.  The government, which has not been able
to meet 50 per cent of the annual
expenditure target even ten-and-a-half
months into this fiscal, has expanded the
size of the budget for the next financial
year by 28 per cent to Rs 1,048.9 billion.

44.  The government has decided to raise the
salary of civil servants by 25 per cent in
the next fiscal year. This will cause
government spending on salaries and
benefits to jump by 26.9 per cent to Rs
132.3 billion. This amount accounts for
12.6 per cent of next fiscal year’s budget.

45.  The government had fixed revenue
collection target of Rs 475 billion for this
fiscal year, which was 21 per cent of the
gross domestic product. But the
government is likely to meet only 96.8 per
cent of the target by the end of the year.

46.  Rs 10 billion has been appropriated to
begin construction of the much-talked-
about Kathmandu-Tarai Fast Track; Rs 7.2
billion has been allocated for Gautam
Buddha Regional International Airport; Rs 5
billion has been embarked for Pokhara
Regional International Airport.

47.  With spending on these infrastructure
projects, the government expects the
economy to grow at a roaring pace of 6.5
per cent in the next fiscal.

48.  The Industrial Policy, 1993 was framed with
the objective of accelerating industrial
sector.

49.  In the context of Nepal, in the sector of
industry, the industrial policy is based on
the industrial policy act 1992.
 Industrial Enterprises Act was formulated
in 1992.

50.  To make remarkable contribution in
national economy through sustainable and
broad-based industrial development in an
effective, coordinated and collaborative
partnership of public, private and
cooperative sectors thereby to support
poverty alleviation.

51.  1. To increase export of industrial products
 2. To increase contribution of industrial sector
in the balanced national and regional
development
 3. To establish industrial entrepreneurship as a
sustainable and reliable sector by utilizing
latest technology and environment friendly
product.
 4. To create strong basis of investment having
developed productive human resources
 5. To protect industrial intellectual property
rights.

52.  1. Assistance shall be provided to increase
export of industrial products thereby
contributing in foreign currency earning
and balance of payment;
 2. Priority shall be accorded to develop or
acquire new technology at national and
industrial unit levels in order to enhance
competitive capacity, quality and
productivity of industrial products and
services;

53.  3. The no pay for no work principle shall
be followed as provided by the labour law .
 4. Additional facilities and concession shall
be made available as incentives to export-
oriented industries, industries established
in Special Economic Zone,

54.  6. Special emphasis shall be given to
promote the industries that use local
resources, raw materials, skills, labour and
technology.
 7. The industrial base shall be made strong
and sustainable having identified and
utilized the areas of competitive benefits
and comparative advantage.

55.  9. Technical and financial assistance shall
be made available to the industries that
use environment-friendly and energy
saving technology on their own costs;

56.  10. Special measures shall be taken to
promote green industries and to make the
established industries pollution free and
zero to carbon emission; development
thereby establish Nepal as an attractive
place for investment in the South Asian
region and in the world.

57.  The Ministry of Commerce and Supplies
(MoCS) launched a new Trade Policy, which
includes provisions aimed at promoting
service trade, protecting intellectual
property rights.

58.  Export-oriented industries in Nepal will get
tax refund facilities on the purchase of raw
materials, according to the amended Trade
Policy 2015 unveiled on Wednesday.

59.  The government will provide additional
benefits if the exporters use locally
produced raw materials. The move is
aimed at boosting exports and promoting
local products to reduce the ballooning
trade deficit that has been hurting the
economy. Nepal’s trade deficit rose to Rs
689.36 billion in the last fiscal year, from
Rs 622.37 billion in 2013-14.

60.  “The new policy aims to promote domestic
industries, manage growing imports and
boost exports, so that trade becomes an
engine for economic development of the
country. We hope the policy will also help
frame appropriate programmes to lift the
country from grouping of least developed
countries to developing nations within the
deadline of 2022 .

61.  The policy, as in the past, says government
will play the role of a facilitator, guardian
and regulator.It also includes measures to
promote exports of goods with comparative
and competitive advantage by
strengthening capacity of standard-testing
laboratories and establishing additional
common facility and processing centres.

62.  It’s State’s responsibility to build an
environment that enables a life that is full
of dignity, exploitation-free and just with
at least the minimum social and
professional security by ensuring access to
income-generating employment
opportunities for all citizens of the country
without discrimination.

63.  Long-term Goal
 The long-term goal of the Labour and
Employment Policy 2005 is to provide
productive, non-discriminatory,
exploitation-free, decent, safe and healthy
work opportunities for citizens of the
working ages by building an environment of
friendly investments, in addition to
building and managing a labour market that
contributes to the national economy so
that it can compete at the global level.

64.  1.) To pave the path of sustainable
economic development by offering
opportunities of productive and full
employment for the entire workforce .
 2.) To augment productivity by eliminating
forced labour practices in both formal and
informal sectors.
 3) To make the labour market safe,
healthy, competitive and open by
developing a social security system .

65.  5) To ensure equal access of women, dalits,
indigenous nationalities and the displaced
people to employment.
 6) To eliminate child labour.
 7) To make labour and employment
administration smart, up-to-date, efficient
and effective.

66.  1. National Development Programmes shall
be implemented upon developing a system
of analysing issues from labour and
productivity .
 2. All labour-intensive employment sectors
with economic development potentials
shall be identified and investment in such
sectors encouraged.
 3. Priority shall be accorded to
employment-oriented investments.

67.  4. The employment promotion perspective
shall be followed while formulating annual
sectoral development programmes.
 5. The master plan on child labour shall be
effectively implemented by establishing cordial
relations with other sectoral work plans
prepared for the protection and development
of children.
 17. Quality vocational training and skill
development training shall be made more
effective and developed as a means of fulfilling
the requirements of the economic system and
labour market as well as to create
opportunities for employment and self-
employment.