During the Make in Nepal Summit 2024 on Tuesday, Finance Minister Barshaman Pun detailed an ambitious economic strategy centered on enhancing domestic production and revamping regulations related to corporate misconduct.
Speaking as part of the government's "Swadeshi" or self-reliance campaign organized by the Confederation of Nepalese Industries, Pun announced a series of measures aimed at promoting indigenous products that will be incorporated into the upcoming fiscal year's budget.
"Since the private sector is represented in the Revenue Consultative Committee, the demands of the private sector will be addressed as much as possible," Pun stated. "In order to promote domestic production, it is positive to make two levels of customs rates different for raw materials and finished goods."
Pun revealed that the government is actively considering implementing differential customs duties, with lower rates for raw material imports and higher tariffs for finished goods. This policy shift could provide a major boost to local manufacturing by making domestically-produced goods more competitive compared to imports.
The Finance Minister also disclosed that the government will institute a policy allowing public procurement of Nepali products at prices up to 20 percent higher than market rates for foreign equivalents.
"The government will make policy reforms in the purchase of domestic (indigenous) products even at a 20 percent higher price than in the past," Pun said. "The demand for domestic products to buy the necessary items for the government is positive."
In addition, Pun announced plans to create a centralized web portal where all levels of government from municipalities to federal offices can view and purchase indigenous Nepali goods digitally.
"By creating a web portal, the government will make arrangements to purchase Nepali products by all three levels of government through the technology that allows domestic products to be viewed digitally at one place," he explained.
Emphasizing the importance of protecting local industries, Pun stated, "Even if it is higher than the market price, it is necessary to protect the domestic industry and production."
The upcoming budget is poised to embrace the strategy of advancing local domestic goods and the strategy of exclusively utilizing local products in government establishments. This impending budget is positioned to be a pivotal moment for the
Separately, Pun also indicated that the government will reform how economic crimes are prosecuted to avoid the current trend of treating even normal business disputes as criminal matters requiring detention.
"We will build a budget in such a way as to send a message to the young generation that there is a future within the country," Pun remarked, promising policies to bolster confidence and morale in the private sector.
The Finance Minister's comments set the stage for a significant change in Nepal's economic strategies, moving from a free market approach to a more protective position focused on nurturing local industries through various preferential purchasing and tariff actions.
His pledge to overhaul the handling of corporate crimes could also provide relief to businesses that have faced harsh prosecutions and reputational damage over civil disputes classified as economic offenses.
With the annual budget presentation just weeks away, the private sector and economic analysts alike will be closely watching whether Pun's words translate into concrete policy measures that could fundamentally reshape Nepal's economic landscape.
