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Nepal’s IT industry is booming. So why is the govt setting up its own software company?
🇳🇵 Nepal /Technology

Nepal’s IT industry is booming. So why is the govt setting up its own software company?

From OnlineKhabar English · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Nepal's IT sector is experiencing significant growth, with exports estimated at Rs 150 billion and domestic services worth over Rs 100 billion.
  • Despite this, the government has decided to establish its own software development company, the Software Development and Operations Centre.
  • This move contradicts government promises of incentives and support for the private IT sector, raising concerns about trust and future industry development.

Nepal's burgeoning information technology sector, a significant contributor to the national economy, is facing a puzzling contradiction from its own government. The IT industry is estimated to export software and services worth around 150 billion Nepalese rupees, while also generating over 100 billion rupees in domestic services. The sector employs more than 100,000 skilled workers, positioning IT as a strategic growth area for the country.

However, instead of bolstering the thriving private sector, the government recently approved the formation of its own software development entity, the Software Development and Operations Centre. This new government office will be responsible for developing, upgrading, and maintaining software for public agencies. The move has drawn sharp criticism from industry stakeholders who see it as a direct conflict with the government's stated policies and promises.

Making big promises is not enough. If the state itself does not trust its own citizens and private sector, how can foreign investors or other countries trust us?

— Gauravraj PandeyPandey criticized the government's decision as a sign of distrust towards local IT companies.

Government policies and budget statements have consistently highlighted IT as a strategic sector, vowing incentives for software exports and aiming to promote Nepal as a global digital economy hub. Finance Minister Dr. Swarnim Wagle had previously announced measures like a 50 percent tax exemption on income from IT service exports. Yet, the decision to create a state-run software center has cast doubt on these commitments.

Gauravraj Pandey, president of the Nepal Association of Software and IT Services (NAS-IT), expressed that the government's action signals a lack of trust in domestic technology companies. He believes this could deter the industry's growth, particularly as Nepali firms strive for international recognition. Pandey argued that the government's role should be to establish clear regulations and quality standards, fostering an environment for private companies to compete and serve the state, rather than directly competing with them.

Instead, the government seems to have forgotten its role as a facilitator and is trying to directly compete with the private sector.

— Gauravraj PandeyPandey described the government's shift from facilitator to competitor in the IT market.
DistantNews Editorial

Originally published by OnlineKhabar English. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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