Govt to announce startup support policy soon

Kathmandu, June 25

Minister for Industry, Commerce and Supplies, Dilendra Prasad Badu, has informed that the government is in the process to formulate some policies and programmes to support the startups which would be announced soon.

Speaking at CNIYEF Nepal StartUp Fest 2022 organised by the Young Entrepreneurs Forum of the Confederation of Nepalese Industries (CNI) in the Capital on Saturday, he said that the government has the responsibility to create an environment where young innovators and entrepreneurs thrive. "Success of startups will not only benefit the entrepreneurs but the entire society. You should prepare yourself to present your ideas and business at the international level," said Minister Badu, while pledging government support to the young entrepreneurs attending the event.

However, some of the government programmes to support the startups couldn't be implemented and entrepreneurs got no support from them. While the government in Nepal presented COVID-19 as an excuse for the poor progress in startup ecosystem, the challenges posed by the pandemic turned into the fertile grounds that boosted the business innovation and growth globally.

Secretary of the National Planning Commission, Kewal Prasad Bhandari, said that the government did not put any effort to facilitate and develop the new startups and businesses during the pandemic. There was a great deal of indifference on the part of the government in terms of supporting startups.

"Political leaders and bureaucracy still live with the concept that the government should run businesses and enterprises and the latter doesn't want to facilitate private sector industries. Nepal is not a country that doesn't have resources to fund or support startups but our understanding and orientation to business and development is quite poor and misleading as well," said Bhandari.

He said that the policy makers and bureaucrats have not understood the importance and intensity of the startups and need of the young entrepreneurs.

According to him, the government has discussed mobilising grant and investment to support the startups but the young entrepreneurs denied to accept the tax-payers' money in grants. "Young entrepreneurs have a high level of responsibility to the society, and integrity. I was surprised to hear that!" Bhandari stated.

No single-window in 3 decades

He also mentioned that the Foreign Investment and Technology Transfer Act was created about three decades ago but governments failed to implement the 'single-window system' envisioned by the law, yet.

"We lack knowledge, capacity and proactiveness in terms of developing startup ecosystem. Likewise, the announcement by the budget of the next year to offer some tax discount for startups is not a significant step," said Bhandari.

Swati Rungta, Managing Partner of Nepal Global Equity Fund, said that proper hedging mechanism is needed to attract more Foreign Direct Investment. Investors are apprehensive about the prospects of their businesses.

She said that private equity and venture capital is the major source for FDI in Bangladesh and India but Nepal lags behind in this initiative which has adversely impacted the startup ecosystem.

'Don't create rules for startups'

Similarly, Suman Rayamajhi Upaya, Managing Director of Upaya City Cargo, stated that transportation has always been a blue-collar job, not a white one. "We want to change this concept with the adoption of technology. We want to expand our services to the remotest parts of the country as well," he said while urging the government not to create rules for the startups and instead facilitate their path to entrepreneurship.

Likewise, Vishnu Prasad Agrawal, President of CNI, stated that innovative businesses have received more support from out of the country rather than by the government. Funding is the single largest challenge for the startups so this programme aims at creating awareness and generate funding.

NPC and MoICS had prepared a procedure to provide funding to the startups but it couldn't move ahead. A new procedure is recently formulated by the NPC, I hope it will be implemented soon and the startups will get policy and financial support, he said.

Binod Chaudhary, President Emeritus of CNI and lawmaker, said that the country has failed to create a supportive environment for startup business. According to him, the government has allocated Rs. 500 million to the NPC but a single penny was not utilised. NPC said later that the Ministry of Finance just gave them the plan not the money.

He urged the young innovators and entrepreneurs to shed off the hesitation and shyness from their mind while initiating and operating startups.

Prasanna Shrivastava, Counsellor of the Embassy of India in Kathmandu, suggested creating a mechanism to promote startups to transform business, society and the economy.

He said that India has institutionalised innovation and startups in the country by promoting young innovators and idea creators. There are multiple programmes to support and inspire the startups in the country. "There are 42 unicorns – a startup business larger than US$ 1 billion, and it aims to increase the number to 100 this year," he said.

Amun Thapa, President of CNIYEF, said that Nepal needed to redefine its introduction from the country of Sagarmatha and Lord Buddha to some great business as well. This is a campaign and it will continue in various forms in the days to come, he informed. 

Published in The Rising Nepal daily on 26 June 2022.