Private sector against minimum capital requirement

Private sector players have urged the government to remove the provision of fixing minimum capital for micro-enterprises. They have said that by fixing minimum capital for small industries, the government is hindering promotion of small, medium enterprises (SMEs). The recently passed Industrial Enterprise Act has given industry status to micro-enterprises. However, it has defined micro-enterprise as small industries having fixed capital of at least Rs two million. According to industrialists, minimum capital requirement that the government has fixed for micro-enterprises has discouraged small entrepreneurs willing to set up businesses with small capital. “On one hand, the government vows to promote small industries and on the other hand, it is discouraging investment in micro-enterprise sector,” Pashupati Murarka, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said at a programme organised by Ministry of Industry (MoI), adding that the government should not fix capital requirements for other industries either. According to Murarka, entrepreneurs today are more attracted to trading businesses than setting up industries due to policy hassles they face in industrial sector. Hari Bhakta Sharma, President of the Confederation of Nepalese Industry (CNI), said that local level industries are facing lots of hassles due to lack of strong local administration.“The number of investors in the local level is dwindling as they don’t have strong support of the government to address their immediate concerns. Local industries have been entangled in enormous day-to-day challenges in terms of obstruction, insecurity and connectivity at the local level,” Sharma said.