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No visa for Nepali money
KATHMANDU, JUN 29 -
The government has for the time being dropped the idea of allowing Nepalis to invest abroad.
The decision comes in the wake of the prevailing balance of payment deficit, liquidity crunch and reduction in foreign exchange reserve. Though the government had been mulling allowing such investment, it is, however, yet to allow it in practice as an Act prohibiting investment abroad still exists. Unless the Act is amended, investent aborad by Nepalis will not be leaglly possible.
The government had, in its budget this year, decided to formulate an Act to open the door for Nepali entrepreneurs to expand their investment abroad.
“We have dropped the idea of allowing investment abroad for now,” Finance Minister Surendra Pandey told an interaction with officials of the Confederation of Nepalese Industries here on Tuesday.
Officials had been preparing to send the draft of the Act allowing Nepalis to invest abroad to the Cabinet.
After continuous lobbying by entrepreneurs, the government had decided to allow Nepalis to invest abroad.
However, Pandey reasoned that it would be unwise to allow Nepali resources to go abroad when the country has been facing economic hardships with reduced foreign exchange reserve, deficit in balance of payment and liquidity crunch. “It is not good to allow resources to go abroad at the moment,” he added. A senior official at the ministry also said the government will keep the current prohibition as long as the situation of BoP deficit does not improve. “We don’t have enough foreign exchange reserve to allow it to be taken to a foreign country,” the official said.
However, entrepreneurs are not happy with the government’s decision. Vice president of FNCCI Pradeep Jung Pandey said that allowing investment abroad will not hurt the Nepali economy as those who invest abroad bring home money too. “There has already been unauthorised investment abroad,” he said. Companies having a good brand image could do better abroad which would help Nepali companies grow and ultimately the nation will benefit.
Former CNI’s governing council member Atma Ram Murarka said the government could get back more money through income tax from companies investing abroad. “There has been unauthorised investment abroad in the stock market and other areas and the government does not know how the money is going abroad,” he said. The legalising of the investment abroad would open the door for Nepal to monitor investment abroad as well, he added.
There have been media reports of capital flight in the name of importing wool from Tibet.
The media reports about Nepalis depositing money in Indian banks and getting insurance policies from the Indian insurance companies are other recent stories in Nepali media which reflect how Nepali money is being diverted abroad.
Even those entrepreneurs who have invested in other countries have not come into light formally.
Posted on: 2010-06-30 08:18
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