The High-Level Economic Reforms Recommendation Commission has presented its report to the government, outlining a series of strategic proposals aimed at fostering an investment-friendly environment and reducing manufacturing costs in Nepal. The report emphasizes the need for comprehensive legal reforms as a foundational step toward achieving these economic goals.
Chaired by former Finance Secretary Rameshwar Khanal, the Commission has recommended the repeal of several outdated laws that it considers obstacles to economic modernization. Among the laws suggested for repeal are the Income Ticket Charge Act of 2019 BS (1962), the Black-marketing and Some Other Social Offences and Punishment Act of 2032 BS (1975), the Private Forest Nationalisation Act of 2013 BS (1957), and the Administrative Procedures (Regulation) Act of 2013 BS (1956). Other laws identified include the Birta Abolition Act of 2016 BS (1959), the Compensation Act of 2019 BS (1963), the Revenue Leakage (Investigation and Control) Act of 2052 BS (1995), and the Act Restricting Investment Abroad of 2021 BS (1964). The Commission also recommended repealing the Nepal Agency Act of 2014 BS, the Act to Implement Provincial Development Projects of 2013 BS, the Import and Export (Control) Act of 2013 BS (1957), the Social Practices (Reform) Act of 2033 BS (1976), and several others considered irrelevant to the current legal framework.
In addition to repeals, the Commission has proposed updating and merging key legislative frameworks. It has called for the replacement of the existing Drugs Act of 2035 BS (1978) with a new Drug and Health Materials (Regulation) Act, which would govern the import, marketing, and distribution of drugs, supplements, cosmetics, and human cell-based devices for transplantation. It has also suggested consolidating the Immovable Property Reacquisition Act of 2013 BS and the Land Acquisition Act of 2034 BS into a unified Private Property Reacquisition Act. Likewise, the Patent, Design and Trademark Act of 2022 BS (1965) and the Copyright Act of 2059 BS (2002) would be merged to form an Intellectual Property Right Conservation Act under the Commission’s recommendations.
The Commission has further proposed structural reforms in the public sector. It has advised the government to close down five state-run institutions that have failed to sustain operations: Janakpur Cigarette Factory, Butwal Yarn Factory, Nepal Engineering Consultancy Service Centre, National Construction Company Nepal, and Nepal Orind Magnesite Pvt. Ltd. It recommended that the assets of these institutions be transferred to the government and repurposed for more productive uses.
In the industrial sector, the Commission has suggested merging Hetauda Cement Industry and Udayapur Cement Industry following an assessment of their assets and liabilities. The remaining shares would be opened up to private investment. Regarding the aviation sector, the Commission advised restructuring Nepal Airlines Corporation to function as a commercial entity through the involvement of international strategic partners, even proposing temporary foreign management to restore commercial viability.
Decentralization has also been addressed. The Commission recommended transferring the Dairy Development Committee to all seven provincial governments, allowing it to function as a public institution at the provincial level.
To improve governance, the report called for amendments to existing company laws to ensure that public institutions are managed professionally and free from political interference. It emphasized the importance of timely audits, merit-based appointments, and restricting public institutions from borrowing funds for salaries or day-to-day expenses.
Finally, in a significant move, the Commission proposed abolishing the Revenue Investigation Department, arguing that its functions could be absorbed by other existing bodies with enhanced capacity. The report was submitted to Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel and is expected to serve as a roadmap for wide-ranging economic and institutional reforms in Nepal.
