Govt unveils IAP for Economic Development and Prosperity
The government on Thursday unveiled Immediate Action Plan for Economic Development and Prosperity, saying that it will help achieve higher growth, create jobs and establish social justice.
However, except for promising tax incentives to agriculture, tourism and private investors in the upcoming Investment Year 2012/13, the Immediate Action Plan (IAP) contains few new initiatives. “It has largely repackaged the already existing programs using new terminologies,” commented a government secretary.
For instance, the IAP categorizes 11 large-scale projects as Projects of National Pride and promises uninterrupted fund availability for them. “We will also create an environment whereby locals, workers and project staff will not strike under any pretext to ensure their smooth implementation,” said Prime Minister Baburam Bhattarai, who unveiled the IAP amid a function Thursday.
Interestingly, 9 out of 11 projects were already labeled as National Priority Projects and governments in the past as well as present had pledged similar support for them.
The two new projects in this list, however, are Budhi Gandaki Hydropower Project and development of North-South Highways in the Koshi, Gandaki and Karnali regions. “We will develop the detailed project report (DPR) of Budhi Gandaki within a year,” said Bhattarai.
Under the new programs, the government has adopted an ambitious target of attracting US$ 1 billion worth of foreign investment in the country in the remaining six months of this fiscal. It has also committed to felicitate all investors who invest Rs 2 billion in the country.
“We will unveil 20 projects and also sign bilateral investment promotion and protection agreement (BIPPA) with five countries, including China, to lure foreign investment,” said Bhattarai. He also promised tax incentives for all the new industries to be established in the Investment Year 2012/13.
The IAP commits no-work, no-pay for the industries. It also promises to reduce lending rates of commercial banks and establish reinsurance company in the country.
The IAP also promises introduction of health insurance for all Nepalis, distribution of ration cards to the poor and disadvantaged groups. In order to promote commercialization of agriculture, it pledges tax incentives for companies importing modern agricultural tools and cash subsidy of Rs 100 per tree for three years to farmers pursuing apple farming.
Under tourism development, the IAP envisages to categorize the country into 17 tourism zones and instantly start development of at least six of those zones in an integrated manner.
“We will bring two wide-body aircraft for Nepal Airlines Corporation and also initiate construction of the second international airport in Nijgadh under Built-Own-Operate-Transfer (BOOT) within this fiscal year,” said Bhattarai.
The IAP also offers income tax incentives to investors opening five-star hotels in Bhaktapur, Janakpur and Lumbini, and to investors opening three-star hotels in Rara, Khaptad and Dhorpatan — the popular pilgrimage and trekking destinations.
Bhattarai declared that the government will set up a separate electricity transmission company, freeing Nepal Electricity Authority from transmission function, within two months. “The government will also provide subsidy for installation of solar energy solutions in 50,000 houses in the cities,” said Finance Secretary Krishna Hari Baskota, highlighting features of the IAP.
The government in the IAP also announced that it will start new programs to create New Nepal. To finance the New Nepal Campaign, it said a New Nepal Development Campaign Fund will be established and all the government officials and civil servants will be asked to contribute a day´s salary to it.
“We will also request non-resident Nepalis to contribute US$ 10 each to the fund,” said Bhattarai.
The IAP also commits to establish two institutions — National Institute of Strategic and Foreign Affairs and National Institute of Economic Development and Social Change — as independent think thanks to provide policy inputs to the government on foreign affairs, economic and social issues.
Projects of National Pride
1. Kathmandu-Tarai Fast Track
2. Mid-Hills Highway
3. Regional airports in Bhairahawa and Pokhara
4. Detailed Project Report of Budhi Gandhaki within a year
5. Second international airport in Nijgadh
6. Tamakoshi Hydropower Project
7. East-West Electric Railway
8. Postal Highway
9. Melamchi Drinking Water Project
10.Open tracks for north-south highways in Koshi, Gandaki and Karnali
11.Sikta Irrigation Project
