Bikalpa an Alternative organized a Sambad (dialogue) with the different stakeholders from the private, development, and government sector of the Koshi Province. The event was held at the premise of the Bikalpa an Alternative dated 9^th March 2025. The Sambad’s objective was to discuss the opportunities and challenges of the Koshi province’s economic growth and explore the roles of central, provincial, and local governments in overcoming these opportunities and challenges.

The participants included Mr. Mohan Subedi, Economic Advisor of the Koshi Province Chief Minister, Mr. Chudamani Bhattarai, Director General of Chamber of Industries Morang, Entrepreneur Mr. Pratik Raut, Mr. Bishnu Kafle, BDS lead at DAI Global UK/Udaya Project, Mr. Chudamani Neupane, Computer Officer at Ministry for Industry, Agriculture and Cooperatives of Koshi Province and Mr. Basanta Adhikari, Executive Director of Bikalpa an Alternative with other Bikalpa an Alternative team member named Ranu Sah, Samir Chhetri, and Isha Guragain as observers.

The Sambad revolved around the structured questions where Mr. Adhikari raised the questions allowing participants to share their views. The discussion facilitated a robust exchange of ideas, concerns, and potential solutions. Participants raised several critical issues, emphasizing the need for collaboration between central, provincial, and local governments for the economic growth of Koshi Province. Below are the responses from the distinguished guest based on the issue raised by Mr. Adhikari.

1. In regard to business regulations, what are the tasks that can be done from the province level, which previously required going to Kathmandu?

The decentralization process has granted the rights to the provincial government to make the law and implement it. A total of 75 bills have been passed so far. Company registration can now be done from Itahari, eliminating the need for travel to Kathmandu. Additionally, industries with an investment of less than 5 billion NPR can be registered in the province, streamlining the process for business operations. The requirement to travel to Kathmandu for an Initial Environmental Examination (IEE) and Environmental Impact Assessment (EIA) has been removed, as these assessments can now be conducted at the provincial level. Furthermore, the provincial government has been granted the authority to approve up to 60 billion NPR investments, making large-scale investments more accessible. Obtaining a vehicle License has also become significantly easier at the provincial level which used to take years before. Lastly, the provincial government can organize an investment summit to foster economic growth and attract investors.

2. What is the economic aspiration of the provincial government, what it wants to achieve but has not been successful in doing it?

The provincial government aims to take authority over trademark registration, allowing businesses and entrepreneurs to avoid reliance on the central government and the lengthy 7-8 month waiting period. Additionally, the provincial government wants to facilitate the process of obtaining an Exim code, as the current rules ask everyone to deposit 3 lakh NPR for importing goods even for small business that only makes one-time imports which is not feasible for many. While the provincial government is interested in working on mining, it currently lacks the necessary units and can only conduct exploration, while excavation rights remain with the central government. Similarly, rivers, streams, and water resources fall under central jurisdiction limiting the province government’s authority.  Although forests fall under the provincial government’s jurisdiction, the provincial government still must depend on federal approval for the utilization. Furthermore, the provincial government seeks to enhance the business environment in the region, for which land is the essential factor. The province government does not have the land; to lease the land it requires central government authority which creates a barrier to local economic development.

3. Which are the sectors the province government needs to prioritize for economic growth?

Considering the structure and resources of the province, several key sectors should be prioritized for economic development. Agriculture holds significant potential, especially in areas where Koshi Province has a competitive advantage over India, such as the cultivation of cardamom, tea, avocados, oranges, kiwis, etc. These high-value crops can boost exports and enhance local incomes. Additionally, tourism should be a major focus, particularly religious, adventure, and nature-based tourism, given the province’s diverse landscapes and cultural heritage. Tourism-related service industries like hotels and restaurants will further enhance economic growth and attract more visitors. Health tourism, particularly in specialized fields such as eye hospitals could present another opportunity as many Indians come to Nepal for the service. Lastly, hydropower development should be prioritized, leveraging the province’s water resources to generate sustainable energy and support economic growth.

4. What are the barriers to advancing the economic growth of the Koshi Province?

Several key barriers hinder the advancement of economic sectors in the Koshi Province. One of the major challenges is policy instability caused by political uncertainty, which creates an unpredictable business environment. Within 7 years of a short timeframe, Koshi Province already has seen half a dozen Chief Ministers. Additionally, the province has not been granted full autonomy, which has forced the province government to depend on the central government. As we have a saying “if it rains in Singha Durbar, the province must use an umbrella.” Resource limitations are the other barrier that creates obstacles to the province’s economic growth.  Out of the Nrs.35 billion budget, Koshi Province is only able to raise 4 billion, for the rest of their resources, they heavily rely on the central government. A significant shortage of skilled human resources is also equally evident, as only 58% of the approved 4,058 province government posts are currently filled. Many short-term employees are risk-averse and view their positions as a form of punishment, affecting efficiency and productivity. Another obstacle is the negative perception and lack of a supportive policy environment for the private sector, which discourages investment and economic growth. Duplication of work at different government levels, such as overlapping responsibilities between central and provincial governments, forces service seekers to navigate complex bureaucratic processes. Moreover, the government has lost its credibility due to unfulfilled promises.

5. What roles should the central, provincial, and local governments play in addressing the existing challenges?

To address the challenges effectively, the central, provincial, and local governments must play distinct yet collaborative roles. The central government should transfer the necessary authority to the provincial government and grant economic autonomy, enabling it to function independently in key areas of development. As the provincial government is responsible for policy and lawmaking, it should focus on creating a business-friendly environment by implementing policies that attract investment and facilitate economic growth. Meanwhile, local governments, being directly in touch with the citizens, should prioritize delivering effective public services that help improve the daily lives of common people and further grassroots economic development. To ensure smooth cooperation and coordination among all levels of government, coordination committees should be established in-between the central and provincial governments, as well as between the provincial and local governments. This approach will foster efficient governance and contribute to overall economic progress.

6. What are the current priorities of the provincial government, and what actions are being taken?

The provincial government has set several key priorities to drive economic growth in Koshi Province. One of its major initiatives is to declare the year 2082 as the Koshi Province Tourism Year, accompanied by policy measures to ensure its success. To attract substantial investment, an investment summit is being organized to secure 1 trillion NPR in investment. Additionally, efforts are being made to amend 6-7 business-related bills to create a more business-friendly environment. As 97% of Nepal’s tea is produced in Koshi Province, recognizing its dominance in tea production, an international tea conference has been scheduled for Jestha/Asar 2082, to promote and brand Nepali tea at the international level. To enhance tourism further and improve visitor convenience, a 400km footpath trail is under construction. The provincial government is also prioritizing the private sector and is committed to creating a business-friendly environment. Lastly, to strengthen financial administration, a Provincial Inland Revenue Office is being established to ensure better economic governance.