While presenting the budget on May 15th, Deputy Prime Minister and Finance Minister Bishnu Paudel mentioned the issue of investment in the context of the existing challenges of the economy. He said that the private sector's contribution to the country's total fixed capital formation has not increased as expected. He also said that the new financial instruments developed to manage investment risk could not be effectively deployed and the required amount of financial instruments could not flow to the productive sector. Of course, the investment may have decreased recently. But it is not that there is less investment in the country, it is more that the problem has come.

After 2046, the open market economy adopted by the democratic government suddenly opened all the doors that were closed, the private sector identified many potential areas for investment and expanded the investment. The private sector invested heavily in airlines companies, banks and insurance companies, hospitals, schools, medical and engineering colleges, industries, star hotels, transportation, power generation. It also played an important role in increasing the revenue of the government in addition to increasing employment. As a result, within three to four years, the size of the country's total economy and GDP growth rate continued to be around 7/8 percent. At that time there was an opportunity. It would have been possible to invest in any field. Everywhere was 'virgin land' for investment. The government was private sector friendly. According to the wishes, needs and suggestions of the private sector, draft laws were drafted, and the parliament passed them without a hitch. Investments were also being made, and the results were coming as desired. 

However, within a few years, the government fell into the chaos of instability. The Maoist conflict began. Private sector investment also stopped. At that time, many did not invest in industry, some only invested in land. After 2046, the pace at which private sector investment expanded, political instability slowed investment expansion. But after the people's movement of 2062-63, peace reigned in Nepal. After that, the private sector again increased investment in cement, dandy, medicine, insurance sector, power generation, hotel and other tourism related industries, manufacturing sector. Investments were so high that supply exceeded demand in some areas. At that time, the price of land from Kathmandu to the main cities of the country was skyrocketing. The government was also happy that the property tax was coming in high. The government kept increasing the government price of land to collect more property tax. 

It also affected the youth who dreamed of building a small house in the city. Even now, the dream of owning a house in the city has not been fulfilled for such youth due to the unexpected and excessive increase in land prices. Now the young generation chose to migrate abroad saying that they cannot fulfill their dreams by staying in Nepal. On the one hand, new investments increased the supply more than the demand, on the other hand, the demand was shrinking due to the migration of young people. The sudden onset of Covid-19 also disrupted the cycle of demand and production. Many industries, transport sector and small and medium businesses fled, many banks were blacklisted, banks and financial sector are also in crisis due to non-payment of loan principal and interest. 

Financial resources are now all stuck in real estate. The main reasons for over-investment in land are the inability of the government to regulate cooperatives and the increase in government valuations and excessive lending from financial institutions. On the other hand, due to supply exceeding demand, the operating industries are producing only around 30/40 percent, thus not getting good returns. They have not been able to pay the bank installments as they are operating at a loss. Even the government could not get income tax. Not only businesses and banks, but also the government's revenue has been affected.

Can we now increase investment with the private sector and use the money saved in the bank to run the economy? Can we attract the private sector by identifying new areas of investment? Every day the private sector and the government are concerned about similar issues. Discussions and deliberations are going on in the media looking for a similar solution. 

Now it's time to encourage investment growth in the problem areas with more investment, not to discourage it. For that, it is necessary to identify other areas with investment potential. Now our first priority area for investment should be information technology, second organic agriculture, third tourism and then hydropower.

The recently announced budget will provide a 75 percent discount on the tax on income from information technology service exports, foreigners living in Nepal and working in Nepal will be charged only 5 percent income tax for exporting information technology services abroad, startup businesses will not be charged income tax for 5 years, loans will be given from 2 to 20 lakhs at 3 percent interest for startups. This is a positive step of the budget, but still not enough. If we want to make a big leap in this field, let us make income tax zero for at least 5/7 years on the income of the youth working in the IT sector. Let's give full income tax exemption for 5 years to companies that invest in information technology and export abroad. Let's build an information technology sector (IT park), which can retain skilled manpower in Nepal. This will open many doors of investment.

Similarly let's encourage organic farming through commercial agriculture rather than conventional agriculture. By 'branding' organic farming, our agricultural produce can fetch a fair price in any corner of the world. On the other hand, unless we have our own airline network, our tourism sector cannot progress. In order to run the 3 international airports that are currently operating at full capacity, there is a need to add 12-15 aircraft by operating the national flag carrier under the Public Private Partnership (PPP) model as the mouthpiece of a foreign airline company. Which will increase the number of tourists from 11 lakhs to 30/35 lakhs annually. Let us encourage Nepal-India tour operators by giving concessions to bring in Indian tourists from the border areas. The tourism sector drives the economy from villages to cities and creates jobs.

With the entry of the private sector into the energy sector, today we have become an energy exporting nation. This is our pride. We are targeting to export 10,000 MW of electricity to India and 5,000 MW to Bangladesh within a few years. Some infrastructure is also being built for that. Now, let's amend the laws and regulations to gradually allow the private sector to participate not only in electricity generation, but also in electricity transmission lines and distribution. If we involve the private sector in the construction of transmission lines, it will not matter even if the MCC project in America is closed. Let's arrange to install solar power at home and connect it to the national grid. It has also been tested successfully. But infrastructure is still needed. Anyone with capital wants to invest now. It is the job of the government to show potential areas and make policies for that. The private sector is now waiting for more investment.