KATHMANDU, JUL 11 -The government has been working to amend the Industrial Enterprises Act 1992 to turn it into an “umbrella act” which will include a legal provision on the Special Economic Zone (SEZ). The Ministry of Industry is preparing to introduce the act though an ordinance.
Earlier, the government had planned to bring a separate act for the SEZ with the aim of boosting industrial production, banning labour protests in such areas and providing tax exemptions. However, the draft SEZ Act prepared by the Industry Ministry was opposed by the Finance and Labour ministries regarding taxation and labour relations. The government now wants to abandon the plan to create a separate law for the SEZ by incorporating the related provisions in the umbrella act.
“As there is no situation for introducing a separate law for the SEZ, we will include the issues in the umbrella ordinance,” said Krishna Gyawali, secretary of the Ministry of Industry. He added that the new ordinance would also incorporate provisions related to sick enterprises and relief packages for them.
Last week, a cabinet meeting had decided to bring the much awaited Industrial Act through an ordinance. After three years and three months of the introduction of the Industrial Policy, the government is now preparing to issue the ordinance to implement the policy. Currently, the Industry Ministry is collecting feedback on the draft act from the Finance, Commerce, Labour and Home ministries.
Even three years after the government introduced the Industrial Policy, the private sector and sick enterprises have not been able to get the promised government facilities due to lack of clear rules.
The Industry Ministry said that as soon as the new Industrial Act is enforced, it would work to issue the regulation. Gyawali said that they would incorporate as many issues as possible of the industrial sector in the act, and those left out would be incorporated in the rules. “Since an act without the regulation is incomplete, we have also prepared a draft of it,” he added.
The government has included in the new Industrial Act the concerns of sick enterprises that have not received the government ’s relief package. Two years ago, the Sick Industry Rehabilitation High-Level Taskforce had recommended to the government to give easy exit measures to enterprises beyond rescue, a three-to-five-year package for rehabilitation, loans at low interest rates and tax exemptions, among other schemes.
However, the government did not do so claiming that the relief package went against the existing Industrial Act. Meanwhile, on Wednesday, a delegation of businessmen led by Pashupati Murarka, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), met with Secretary Gyawali to discuss the new Industrial Act. The delegation requested the government to issue the Industrial Act at the earliest and also amend the Companies Act.
Dinesh Shrestha, chairman of the FNCCI’s Industry Committee, said that the government should give special focus to sick enterprises by inserting a separate section related to them in the proposed act.
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