Nepal Government Prepares to Ease Legal Restrictions to Attract Large Investments

Kathmandu. The government is preparing to lift existing legal restrictions to attract large investments and encourage the private sector. Addressing the 36th anniversary of the Employees Provident Fund on Wednesday, Finance Minister Rameshwar Khanal informed that laws, including the Land Act, are being amended to remove obstacles in commercial agriculture and mining.

He stated that the current land ceiling, which restricts ownership to 70-72 ropanis in the hills and 5 bighas in the Terai, makes large-scale commercial farming impossible, and this limit needs reconsideration.

Finance Minister Khanal argued that commercial agriculture is not feasible on small plots of land, expressing confidence that lifting the land ceiling, even if only for agricultural purposes, would open new doors for investment. He acknowledged that the mining sector holds immense potential, but investors are being discouraged by cumbersome processes such as Environmental Impact Assessments (EIA), tree felling permits, and forest clearances.

He claimed that the government has already simplified the environmental approval process by amending the regulations to resolve these issues, sending a positive message to the private sector.

The Finance Minister questioned, 'How can commercial farming happen on one or two bighas of land?' He mentioned that some existing restrictions have already been removed during the tenure of the current government and assured that remaining obstacles would be gradually eliminated.

He stated that the proposed amendment to the Land Act would pave the way for large investments. The government has put forward a plan to make legal processes related to environment and forest sectors more flexible and investment-friendly to encourage private sector investment.

The Finance Minister clarified that future large projects must proceed through purely private sector involvement or the Public-Private Partnership (PPP) model. He committed that the government would continue to untangle further legal knots to create an investment-friendly environment, as limited government resources alone cannot facilitate the construction of large infrastructure projects. –News Agency Nepal