Government moves to amend laws of two funds to expand investment and provide affordable housing to employees

KATHMANDU: The government is preparing to amend the Citizen Investment Trust Act, 1991 and the Employees Provident Fund Act, 1962. The primary objective of these amendments is to provide affordable land and housing to government employees and to expand the investment scope of both funds.

According to the Ministry of Finance, the proposed amendments are based on recommendations made by the High-Level Economic Reform Recommendation Commission, commitments made in the current fiscal year’s budget speech, and the need to resolve practical challenges encountered under the existing legal provisions.

A draft of the amendment bill has already been prepared, and the Ministry has called for public feedback in accordance with Section 6(2) of the Legislative Act, 2024. Suggestions on the draft can be submitted to the Financial Sector Management and Institution Coordination Division of the Ministry via email at [email protected] within 10 days of the notice’s publication.

The Ministry has outlined several reasons for initiating the legislative amendments. Clause 330 of the FY 2025/26 budget speech includes a policy commitment to allow the Employees Provident Fund, Citizen Investment Trust, and Social Security Fund to invest in private equity and venture capital. Implementing this provision is cited as the primary reason for the amendments.

In addition, Clause 350 of the budget speech outlines a policy for these funds to invest in housing projects developed under public-private partnerships, with the goal of offering land and housing to employees at subsidized interest rates and through installment-based payments. The government intends to implement this provision through the proposed legal changes.

The Ministry further stated that the amendments aim to resolve operational issues experienced under the existing legal framework and to modernize outdated provisions.

The government claims that the proposed amendments will contribute to the promotion of fundamental rights and human rights by enhancing the investment capacity of the funds, increasing returns for contributors through higher income levels, and supporting the growth of businesses in which the funds invest.

Additionally, the government asserts that expanding the operational and investment capacity of the funds will lead to improved financial efficiency and make a positive impact on the overall economy, without imposing any additional financial or economic burden on the funds.