Govt support for ailing industries: Sick industries indifferent to govt’s incentives offer

Despite the government’s recent call to Nepali factories to apply for incentives if they have been facing hardships, there have been no takers yet. The Ministry of Industry (MoI) said it had not received a single request from the private sector in the last one week.

The government had issued a public notice on Oct 19 asking industrialists, entrepreneurs and business associations to suggest how sick industries should be defined and which industries should be categorized as sick, present reasons behind their being sick and state the probability of revival of such industries and what relief packages should be designed to ensure their normal operation.

In a bid to take stock of sick industries and make arrangements to revive them, the government formed a Sick Industry Rehabilitation High-Level Taskforce a month ago under the coordination of Dipendra Bahadur Kshetri, vice chairman of the National Planning Commission (NPC).

The taskforce comprises representatives from the MoI, the Ministry of Finance , the Ministry of Energy, Nepal Rastra Bank, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Confederation of Nepalese Industries (CNI).

According to MoI officials, the committee will examine the status of sick industries in Nepal and make recommendations to the government for their revival within a month. “The government will take the necessary action following the recommendations of the taskforce to boost the confidence of sick industries in Nepal which will include several incentive packages,” said an MoI official.

Industry Secretary Shankar Koirala said the taskforce would also interact with the industries after they apply for incentives, and as per their recommendations, it would ask the government to introduce appropriate policy to take care of them.

He added that the government had made efforts to identify the root causes of the problems of sick industries and would create short- and long-term incentive packages including refinancing, easy access to loans and loan rescheduling, legal protection, and incentives on tax and customs, among others. “The government will also introduce an act on sick industries on the basis of the recommendations made by the taskforce,” added Koirala who is also a member of the taskforce.

Kshetri said that he expected the factories that are facing hardships to approach the government within the stipulated time frame to ask for incentives. “If they fail to do so, the government will consider that the industries in Nepal are running without any problems,” he added.

Kshetri said that around eight factories including Gorakhkali Tyre Industry, Janakpur Cigarette Factory and Birat Shoe, among others, had applied for the programme before the government’s formal call and that they would be included in the programme.

Industrialists, however, said that they couldn’t trust the government as most of their previous proposals for incentives had gone unheard. They also blamed the government for giving a short deadline to apply for the programme. The taskforce has been asked to proceed with the programme within 15 days.

FNCCI sources said that though it had recommended the names of around 100 industries to the government asking it to provide them special care a decade ago, most of them were left disappointed. “Apart from four-five small projects, a larger number of factories did not get anything,” said an official seeking anonymity. “In this context, how can the industrial community trust the recent words of the government?”

FNCCI vice president Pashupati Murarka said that industrialists weren’t moved by the fresh call of the government as most of its similar offers in the past have gone unimplemented. “We are not sure if the government is serious this time,” he said.