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V.No. On May 15, 2080, the then finance minister Prakasharan Mahat announced the budget for the financial year 2080/81. It included the announcement that the information technology sector can use 10 percent of its foreign exchange earnings to open liaison offices in third countries, purchase software and install equipment for that. For the same management, Nepal Rastra Bank published Integrated Circular 07/2080 on 27th January 2080. In which seven conditions were laid down to be fulfilled by information technology companies to open a branch office. It is currently being updated.
In that circular, IT companies must earn US dollars before opening a branch office abroad and it is unreasonable not to allow companies that cannot earn dollars living in Nepal to open a branch office to sell their services or products abroad. The policy was made a key condition . Because of this, startups and small companies could not take advantage of it .
On June 24, 2081, the Federal Parliament approved an ordinance and once again allowed Nepali institutions to transfer technology abroad based on their knowledge or ability (franchise) and to open branch offices with the approval of the Department of Industry. But most of the IT and start-up companies did not get any benefit from this arrangement as they did not fall under the jurisdiction of the Industry Department and were registered in the company registrar's office as they had a paid-up capital of less than 100 million .
Now again in 2081, the government brought an ordinance that information technology companies can invest abroad . But it was insisted that it will be according to the instructions of Nepal Rastra Bank. According to the Ordinance, Nepal Rastra Bank has not yet issued a circular that information technology companies are allowed to invest unconditionally. And since such a circular is not even prepared, it can be easily assumed that this time's ordinance is also turning into a game to distract the people .
This ordinance appears to be a series of confusing and contradictory rules . After the Ordinance, the Minister and the Prime Minister, surrounded by employees and activists who have never had business experience, seem very excited, but here is a series of confusing and contradictory rules Seen .
Earlier, the rule stated that IT companies had to earn a large amount of foreign exchange before even thinking about opening a branch office abroad. This effectively crippled the industry, as many startups require initial investment to establish themselves in foreign markets.
Meanwhile, the government continued to issue contradictory instructions . They passed ordinances that raised hope, but the ordinances added new and stricter regulations. This created an environment of uncertainty and fear, stifled innovation and discouraged investment.
IT companies in the IT farm, despite their intelligence and ambition, were powerless to resist the whims of the government. They were trapped in a system where bureaucratic inefficiency and self-interested regulations constantly undermined their abilities. As a result, many talented IT entrepreneurs left Nepal in search of greener pastures in other countries. This brain drain further weakened the Nepali IT sector and deprived the country of valuable human capital.
This story of the Nepali IT industry mirrors the sad story of Animal Farm. Our pursuit of information technology outsourcing, which has contributed about ten percent of the total GDP in India and China, is to guide the future of the country towards prosperity. India embarked on its journey to prosperity by issuing the Foreign Exchange Management Regulations (FEMA) in 2000, allowing companies to invest up to 15 percent of annual sales or 25 percent of net worth abroad. But even after 25 years, we are entangled in the jargon of politicians and bureaucracy.
Indeed, only a flourishing information technology sector can determine the future of Nepal if we embrace the reality of lack of investment in other sectors. However, this is only possible when the government creates an enabling environment to encourage innovation and empower its entrepreneurs. However, high family businessmen have made a family member a NRN and even become a billionaire through foreign trade and this issue is not through them, it is only for a common Nepali.
The constitution of Nepal has not yet established economic freedom as a fundamental right, many rules have been made targeting foreign investment, but Nepalis have been restrained from investing abroad. B.S. The country, which has been trapped in economic darkness since August 13, 2021, has not been able to become independent yet. Nepal Rastra Bank or other agencies of the Nepal government not only reject the financial freedom of the people, they consider the people's property as the property of the state.
If economic freedom was respected, the Nepali people today could have easily prospered through world trade, just like the people of other countries. If the rules or circulars issued by the National Bank are to be printed, it will not even fit on a truck, although the purpose of which is to regulate economic activities, over time, it has started to prevent the people from doing economic activities freely . Seven conditions imposed on information technology firms to open branches abroad is a vivid example of that.
At the end, some questions to the government. There is no procedure for registering a branch office in the company registrar's office, without a letter from the company registrar, there is no rule for the tax office to reconcile the accounts of that branch, and which agency of Nepal will the government register the dollar branch opened abroad? Similarly, why does the government need the approval of the National Bank to bring the benefits of foreign countries to the country when there is a provision for the tax office to audit the income and expenditure? Isn't it because there is waste? There will be other currencies including other Nepali currencies, then will all Nepali companies be handed over to Rashtra Bank and all the rest will go to Ranchi? If one agency of the government cannot trust another agency, then who will the people trust?
