Budget neglects Investment Board

The Investment Board of Nepal (IBN) has lost its teeth after the government failed to propose any concrete plans in the budget for fiscal year 2013/14 to improve the institutional capacity of the high-level body established to facilitate the implementation of large-scale projects in the country.
The IBN that was established more than one and a half year ago through the Investment Board Act, 2011 had an ambitious target to bring in US$ 1 billion foreign direct investment (FDI) in the country in the first half of the fiscal year 2012/13. The whole fiscal year that was supposed to be celebrated as Investment Year 2012/13 was gone almost without unveiling any programs, let alone bringing in such a huge amount of FDI.
Unveiling a full budget of Rs 517.24 billion for the fiscal year 2013/14, Finance Minister Shankar Prasad Koirala announced several programs claiming that they would boost the confidence of the private sector. But the budget has remained vague when it comes to upgrading the institutional capacity of the IBN that even lacks adequate human resources and technical capacity to facilitate large scale infrastructure projects in the country.
"The Investment Board will be equipped with resources," reads the budget. The budget has no specific plans to upgrade the status of the IBN. The IBN had sought Rs 280 million for the fiscal year 2013/14 to hire different technical experts for different large-scale projects. But the government has allocated just RS 120.9 million to the IBN for the fiscal year.
Radesh Pant, chief executive officer of the IBN said that the board is in a ´wait-and-see´ mood for the time being as there is no parliament to carry out the policy reform process. "We are in the wait and see mood to kick-start the actual roadshow for the celebration of Investment Year," Pant told Republica.
The Babu Ram Bhattarai-led government had handed over a total of 14 mega projects, including five large hydropower projects, to the IBN in May 2012. The IBN that was also supposed to unveil different programs to lure investment from the foreign as well as domestic private sectors has lost its vigor as the government has earmarked a meager budget, and, that too, with no concrete plans, says a high-ranking official at the Office of the Prime Minister and Council of Minister, requesting anonymity.
A few development agencies are also in the wait-and-watch mood to actually provide technical assistance to the IBN as the government fails to show strong ownership to improve the institutional capacity of the board. Millennium Challenge Corporation (MCC), a United States Governmental agency, has been studying whether to support the IBN or not to develop infrastructure in the country.
"MCC is currently working to identify whether the government would move forth toward improving institutional capacity of the IBN or not," a source privy to the issue told Republica. MCC is trying to work in Nepal for poverty reduction by developing hydro infrastructure, improving labor relation and transport connectivity."