Nepal’s parliament has passed a new bill on Industrial Enterprises Act banning strikes in industrial units that disrupt the
production.
Nepalese industrialists have long been complaining that the strikes by different trade unions by making competing demands in a bid to the increase their influence are major hurdles to run industries.
As the trade unions are aligned with different political parties, they stage strikes in support of the political mission of their mother parties, Xinhua reports.
Another important provision made by the bill which was passed on Thursday is the provision of the “no work no pay” which is expected to discourage the tendency of workers walking out of industries to participate in rallies organised by political parties in line with the call of the trade unions associated with the particular
political party.
After President Bidya Devi Bhandari puts stamp on the bill, it will replace the 24-year old Industrial Enterprise Act. This bill was passed a month after another important bill on Special Economic Zone (SEZ) was approved, paving the way for the operation of SEZ in the country.
Nepal’s business community is elated with the passing of the two important bills at the interval of one month, terming these moves as progressive steps toward legal reforms.
Pashupati Murarka, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex private sector body of Nepal, said that the provisions of banning strikes and “no work and no pay” were the long-standing demands of the Nepalese business
community.
“This will help attract more domestic and foreign investment if they are implemented properly,” he said.
During the period from 2008-2013, Nepal witnessed a total of 4,451 strikes including bigger and smaller strikes, according to Nepal Rastra Bank (NRB) central bank which conducted a study about the impact of
the strikes in Nepal’s economy.
The central bank’s study found Nepalese economy loses $16m from a day of general strike and Nepal witnessed total output loss of $1bn as a result of high number of strikes in the five-year period.
The bill on Industrial Enterprise Act has also mentioned that it will be the umbrella law on industrial issues which means the government does not changes its provision through annual budgetary provision.
Murarka said that it would give the message of policy stability which is very essential for investors.
Former finance secretary Rameshore Khanal said that all the political parties in the parliament coming to support the bill is an indicator that they have now realised that the peaceful environment in industries are necessary for more investment in the sector.
“In the past, some major political parties were not in favour of no work no pay system but those parties have also supported the provision this time,” he said.
The new law has given tax incentives to industries with manufacturing industry getting income tax exemption by 20%. Investors who earn by investing in infrastructure such as road, bridge, ropeway, railway, airport among others will get 40% tax exemption. It has also made provision of giving full tax exemption for five years and thereafter another three years for the industries set up with investment above $9.31mn.
