Kathmandu. Although there is a great need for foreign direct investment to speed up the Nepalese economy, which is suffering from economic slowdown and inflation, the situation of investment coming to Nepal is disappointing.
According to the statistics of Nepal Rastra Bank and Care Age Ratings Nepal, there is a huge gap between the investment commitments accepted by the government and the investment that will actually come in.
FY 2053 to FY 2081. Till the end of 1982, FDI worth Rs. 577 billion has been approved for a total of 931 projects through the Department of Industry and Investment Board Nepal. However, out of this, only Rs. 180.90 billion or 29.6 percent has entered Nepal. In the fiscal year 2081. In the year 2082, the amount of investment received was only 11 percent compared to the commitment of foreign direct investment. This amount is very small compared to the long-term average.
FY 2081. By the end of 2018, Nepal’s foreign direct investment reached 339.85 billion. This was up 2.1 percent from the previous year. The amount of foreign investment was 12 billion. Whereas in that year, the dividend amount of Rs. 4.70 billion was taken out of Nepal by foreign companies. Thus, if we look at the difference between the amount of foreign investment and the amount inflow, it is seen that the net inflow was limited to Rs. 7.30 billion. In the previous fiscal year 2080. In 81, the net foreign investment was Rs. 8.40 billion.
India’s share in foreign direct investment (FDI) is the highest at 32.8 per cent and China is 9.3 per cent. Regionally, foreign investment is concentrated in energy (27.8 per cent), manufacturing (27.8 per cent) and financial (26.3 per cent).
Various structural and policy problems are responsible for the failure of investment agreements or approvals in Nepal to convert them into real investments. Due to frequent changes in government and policies, there is uncertainty of long-term security among foreign investors.
Although it is easy to get project approval, land acquisition, environmental impact assessment, and permission from local bodies have to be stuck for years. Investors complain that the process of receiving foreign currency payment or dividend from the Nepal Rastra Bank is very cumbersome in the process.
More than 875 projects approved for foreign investment are small in nature and are less than Rs. 15 crore. But there are delays in the implementation phase of big infrastructure and hydropower projects.
At present, Nepal’s economy is going through a slowdown, due to which the common people are suffering from high inflation and inflation. In such a situation, there is an urgent need for foreign investment to increase liquidity in the market, create employment opportunities, and control inflation by increasing production capacity. If the commitment of Rs 577 billion approved on paper can be converted into work immediately, then the economy can gain momentum and the citizens will get relief.
