July 26: Investment commitment for Nepal in the last fiscal year was the lowest since the past three years despite the government’s claim that there has been an improvement in investment-friendly environment.

Data from the Department of Industry show that the investment commitment in the Fiscal year 2019/20 decreased by 46.13 percent as the investors were in a wait and watch mood due to the coronavirus pandemic.

A total of 277 industries, including small-scale industries as well and medium and large industries, were registered with the Department of Industry in the last fiscal year. These industries had received investment commitment of Rs 152 billion. But the investment commitment as well as number of industries registered in the last fiscal year was significantly lower than that of FY 2018/19. In FY 2018/19, a total of 439 industries were registered with investment commitment of Rs 283 billion.

The major reason for the decline in investment commitment is considered as the decrease in number of registration of industries. The registration of industries in the last few months of FY 2019/20 shrunk by 36.9 percent as the country’s economy was paralyzed by coronavirus pandemic.

Although the overall investment commitment in the last fiscal year declined significantly, there was an increase in foreign investment commitment. According to the Department of Industries, foreign investment commitment in FY 2019/20 increased by 51 percent compared to the previous fiscal year. Foreign companies had committed to invest Rs 38.35 billion in 223 companies in the last fiscal year. Such commitment from foreign investors in the previous fiscal year was 25.47 billion.

Spokesperson at the Department of Industry, Binod Khadka, told New Business Age that the registration of new companies has come to a standstill in the last few months due to coronavirus.

According to the Department, sectors like energy, tourism and production are the first choice for investors. The energy sector received the largest share of investment commitment of Rs 100 billion followed by Rs 20 billion for tourism sector.