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Lawmakers seek incentive package on remittance

Lawmakers seek incentive package on remittance

KHATMANDU: Lawmakers have asked the government to launch schemes to encourage migrant workers to send remittances through the formal channel.

Speaking at the Finance Committee meeting of the Legislature-Parliament, lawmakers urged the government to announce schemes to increase the flow of remittances from South Korea, India and the United Arab Emirates (UAE) through the banking channel.

During the meeting, former finance minister Surendra Pandey said that the government should provide incentives to migrants who are working in the aforementioned countries to attract remittances through banking channel.

“The Pakistani government has provided incentives to their migrant workers to increase the inflow of remittance through formal channel by paying transfer charge that is incurred while remitting money,” added Pandey. “Nepal can also apply this model.”

It has been seen over the years that due to the failure of both the government and remitters to attract remittance through the formal channel from those countries, Nepali migrant workers have been transferring money through hundi.

“Nepal has received remittance worth Rs four trillion in the last 20 years, but the inflow of remittances has been slowing down since the last few years, thus, the government should take the initiative to increase the flow of remittance through formal channel,” Pandey reiterated.

At the House panel meeting, Finance Minister Gyanendra Bahadur Karki informed that the government was committed to attract remittances from the aforementioned labour destinations through the formal banking channel.

“We have held discussions with the Nepali ambassador based in South Korea to establish a formal channel to bring remittance from the country during our visit there last month,” Karki said. “The government has taken this issue seriously.

Finance Secretary Shanta Raj Subedi said that the outflow of migrant workers has been declining since the last three years. “The outflow of migrant workers and simultaneously the inflow of remittances have been declining since the devastating earthquakes of 2015,” he added.

Though lawmakers sought introduction of attractive incentives for migrant workers to send remittances through the formal banking channel, Finance Secretary Subedi clarified that the government cannot provide such incentives. He also admitted the fact that the government has not been successful in attracting migrant workers to invest in the Foreign Employment Saving Bonds issued by Nepal Rastra Bank (NRB).

At the meeting, Deputy Governor of NRB Chinta Mani Siwakoti stated migrant workers who are in South Korea send only 0.84 per cent of the total amount through the formal channel. Though the government sends workers to South Korea on government-to-government agreement, the formal channel has not been utilised by the workers there to send money to Nepal.