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Ashok Thapa

The Kathmandu Post

Publication Date : 28-02-2013

The Nepali government has made it mandatory for its offices to purchase domestic products even if these cost more than imports. The Cabinet endorsed the Directive to Increase Consumption of Domestic Goods 2013 last week which requires state entities to buy local in a bid to support domestic industry.

The directive has ordered public offices in the country to use at least 50 per cent local products. It has also planned to give incentives to both the users and the producers. “The Finance Ministry can increase by up to 10 per cent the capital budget of offices using more than 50 per cent local products,” states the directive. It also says that the government will offer special services and incentives to the producers of the local goods used by public offices.

Industry Secretary Krishna Gyanwali said that the move was intended to develop entrepreneurship in the country, increase and develop the consumption habit of local products and make local products more competitive and reliable.  

The directive has listed 14 types of local products to be used by public offices. They are stationery materials, uniforms and materials used in uniforms, furniture and decor, medicines and biscuits and milk. Similarly, the other items are printing work and services, electronic items and transformers, farm tools, construction materials and other items.

Prime Minister Baburam Bhattarai himself was keen to have this system in place. He had announced that a provision would be brought to this effect while inaugurating the 20th National Convention of the Federation of Nepal Cottage and Small Industries (FNCSI) last September. The government’s Immediate Governance and Action Plan 2012 had also envisaged encouraging consumption of domestic products.  

“We will issue a circular to all the government agencies, departments and offices asking them to implement the directive endorsed by the Cabinet,” said Yam Kumari Khatiwada, spokesperson at the Ministry of Industry. “If the directive is implemented strictly, the government will soon be able to replace imports of goods in which we are self-sufficient.”

The directive has defined domestic products as products manufactured in the country or products made from local or foreign raw materials with at least 30 per cent value addition. 

Meanwhile, local producers and traders said they were “suspiciously optimistic” about achieving the set objectives of the directive.

Lata Pyakurel, former president of the Federation of Nepal Cottage and Small Industries (FNCSI), said that promoting domestic products among public offices despite its higher price had become a government catchword. “Though the move is welcome, I am not convinced that it will be executed,” she said.