Investors Seek Security Alongside Their Investments

With the formation of a new government, optimism has spread throughout the business sector. The business community believes that political stability will bring policy consistency, opening pathways for economic progress. Meanwhile, the Ministry of Finance is preparing to draft the new budget. Additionally, election activities are intensifying at the Nepal Chamber of Commerce. In this context, we present an interview with Raghunandan Maru, Chairman of the Cement Producers’ Association and Managing Director of Shivam Cement:

How do industrialists and entrepreneurs perceive the formation of the new government?

The country now has a strong two-thirds majority government, which the industrial and business communities wholeheartedly welcome. Not only them, but ordinary citizens are also enthusiastic because the environment, which so far existed only in principle as ‘governable,’ is now expected to manifest in practice. The problems that have troubled us in the past are expected to be eliminated.

What are the concrete expectations of industrialists and entrepreneurs from a permanent government?

Policy stability is the primary expectation. Long-term policies are essential. Investors seek assurance that their investments are secure. Our group is trying to attract foreign investors who have realized that Nepal’s policies lack uniformity and change with budgets and government transitions. Therefore, stable policies are the biggest demand.

Another key issue is removing procedural complexities. Similar problems arise at every stage from company registration to operations. Unnecessary hassles in licensing must be eliminated or even completely eradicated. Such obstacles continuously disrupt industry growth during this critical time of nation-building.

Applications that have not completed international legal procedures should not be accepted, but the practice of unnecessary file processing even after completing all procedures must end.

The impractical procedures concerning forest user rights are impacting the hydropower and mining sectors. While there is no disagreement about forest protection, procedural hurdles must be reduced. Laws should require one tree to be planted for every tree cut. We expect special attention to be paid to the impacts caused by user rights in hydropower and mining industries.

Boundaries are also a challenging issue. If we aim to create an economy of 100 billion USD, establishing large industries requires a favorable environment. The government should show flexibility and introduce policies that facilitate large-scale investments. This will create employment and strengthen the economy.

A one-stop system should be implemented to simplify processes. For example, if a mining industry requests 1,200 ropanis of land, the state should define the boundaries and grant it. Rules can allow the industry to sell the land if it fails but prohibit its use for other purposes. However, the process itself must be easier. The Ministry of Land Reform’s complex procedures need reform, and the practice of unnecessary file circulation must be stopped.

What is your perspective on all tasks becoming easier through the one-stop system?

Certainly. Even in today’s IT era, the practice of passing files from one table to another only hinders progress. A system should be developed to track the status of files easily via computers. Government work should adopt faster technologies and transition to a paperless system. If achieved, the present government can bring a structural economic transformation in the country.

The Rastriya Swatantra Party has promised to scrap outdated laws, and Finance Minister Dr. Swarnim Wagle set up a committee. How has the industry reacted?

This is a significant achievement for which we remain optimistic. The Economic Reform Commission, led by former Finance Minister Rameshwar Khanal, had also recommended scrapping outdated and unnecessary acts and rules six years ago. This must now be implemented as it would accelerate reforms in the country.

The current government aims to raise per capita income from $1,500 to $3,000 within five years. How do you assess this target?

Youth migration must be halted, and despair removed—something the government can achieve. An environment conducive to entrepreneurship with flexible policies for youth is essential. All types of encouragement should be given to startups and small businesses. Once young people start businesses, the economy will benefit positively. Therefore, the goal of increasing income from $1,500 to $3,000 is achievable. Currently, youths go abroad for employment, negatively impacting social structures. An economy reliant on remittances is harmful; it must be production-based.

You are emphasizing the growth of young entrepreneurs?

Yes, if we want to create a $3,000 per capita income and a $100 billion economy, youth must be made entrepreneurial. With good thinking and vision, Nepal can rapidly develop and become a donor country.

What do entrepreneurs expect from the upcoming budget?

A review of the tax policy is necessary. Value-added tax (VAT) should have different slabs, similar to India’s system. Lower taxes should apply in essential sectors, and higher taxes should apply to luxury goods. Tax policy must be practical and balanced.

What tax rates do you find suitable?

Essential commodities like food should have low taxes to reduce the burden of expensive consumables. Luxury items can be taxed at higher rates.

What is the current state of the cement industry?

The cement industry is becoming export-oriented. While production capacity is abundant, exports remain limited. The government used to provide export subsidies but has stopped recently, causing difficulties for producers. Such subsidies must continue, as there is no revenue loss. Nepal has a production capacity of about 20 million tons, but consumption is only around 8 million tons. Hence, surplus production should be encouraged for export.

Why have cement prices increased?

Increased transportation costs, rising diesel prices, higher packaging expenses, and raw material price inflation are the main reasons.

Has the Iran–US conflict had any impact?

Though the impact is not immediately visible, multidimensional effects have begun. We hope for a swift resolution.

What are your expectations from the new government for the cement industry?

Boundaries and forest user rights are principal challenges. The user rights system itself should be abolished. Why should dual approval be required for cutting trees? Such laws need amendment. Regulations hindering mining industry growth must be simplifed so that the mining sector, like in China, can significantly contribute to GDP.

The government should remove the green tax imposed on coal imports; it is inappropriate to tax non-produced goods. Removing procedural complexities will enable the cement industry to yield great benefits.

Government spending should increase, especially focusing on capital expenditure, which will also drive cement consumption. Currently, provincial budgets are large and need reassessment.

What is the status of cement exports?

Exports are almost halted; only border regions see cement exports. After subsidy cuts, it has become difficult to compete with India. The state must provide concessions.

What do you see as possibilities for rapid national development?

Infrastructure development will trigger rapid growth. For a small country like Nepal, connectivity must be made easy—for example, traveling from Taplejung to Biratnagar should take two hours. This will strengthen the economy.

What is needed in the current budget to ensure an investment-friendly environment?

Implementing a one-stop government service system is mandatory. Although this demand was made before, it was not realized. Licensing processes should be improved, execution accelerated, and investment security guaranteed.

What role will you play in the upcoming Nepal Chamber of Commerce election?

With elections approaching, I have filed my candidacy for the executive committee on the dedicated panel of Shiv Ghimire under Anjan Shrestha. Our aim is to run the Chamber responsibly and systematically, which will considerably contribute to economic prosperity.

What are your primary agendas?

Reducing the distance between the government and the Chamber is my main priority. The Chamber must lead the government towards digitalization, where we currently lag. I will work to eliminate the disappointment among industrialists and entrepreneurs.

I want to advance the Chamber in a new direction and break the distrust between the private sector and the government. If we succeed, it will foster a more stimulating investment environment for business owners.

Anything else you would like to add?

According to the Rastriya Swatantra Party’s manifesto, legal and administrative changes will transform the nation’s framework. The Nepali people should fully trust the government, and industrialists should commit to developing the country. Such resolve will empower us to build a prosperous Nepal.