Kathmandu, July 19 (IANS) A tax concession offered by Nepal’s new budget and the government’s efforts to bolster security for industries have appeased Indian company Aarti Strips Pvt Ltd that has given up its plan to leave the country and relocate in India and elsewhere.
Aarti Strips, a venture in which India’s Bhushan group has a stake of nearly Nepali Rs.3 billion, became one of the biggest manufacturers of corrugated steel sheets in Nepal after it began operations in Biratnagar city in eastern Morang district in 2002.
Aarti, one of Nepal’s largest forex earners with its annual turnover of around Rs.6 billion, had announced that it would pull out of Nepal due to the worsening security situation and an export tax.
“We produce about 100,000 tonnes yearly, about 87 percent of which is exported to Assam and Bihar,” said Rosit Unnithan, general manager at Aarti.
“However, Nepal used to levy a half percent tax on the sale price, which made us lose nearly Rs.2-3 million,” Unnithan told IANS.
In addition, industries in Nepal, particularly in the southern plains, were also hit by rising extortion by a growing number of new armed groups, frequent shutdowns and labour trouble as the Maoist-affiliated unions began vying with the other unions for supremacy.
Finance Minister Ram Sharan Mahat had expressed concern at Aarti’s announcement that it would exit Nepal.
Subsequently, when Mahat tabled the new budget for 2007-8 earlier this month, the export tax was scrapped.
“This year, our turnover will increase to around Rs.6.5 billion,” Unnithan said.
In addition, the government has also announced the formation of an industrial security force to ensure safety to beleaguered companies.
The Morang inspector-general of police has called a meeting with industry representatives to discuss the deployment of Armed Police Force.
The waiving of export tax as well as the establishment of an industrial security force has been hailed by other industrialists from the region.
Jagdish Rathi, former president of Morang Trade Association, was reported as saying that the deployment of security forces, especially along the highways, would boost Nepal’s ailing industries.