Income, expenditure gap further widens

 Kathmandu, Feb. 21

The gap between the government income and expenditure has further widened in a month as the improvements seen in revenue collection by January end couldn't be sustained in February this year. Economists and development experts worry that the revenue mobilisation has remained poor and income couldn't meet public expenditure despite the utilisation of less than one-fifth of the allocated capital budget.

The gap between the government income and expenditure has been negative by Rs. 120 billion. The gap was Rs. 87.6 billion in the third week of January with total government receipts of Rs. 501.3 billion and expenditure of Rs. 588.9 billion, according to the statistics published by the Financial Comptroller General Office (FCGO) – an agency under the Ministry of Finance (MoF) which is responsible for the treasury operation of the government.

The government has received Rs. 568.8 billion, in tax and non-tax revenue and grants, by Monday while total expenditure from treasury is Rs. 688.6 billion, the statistics show. Even seven months into the current Fiscal Year 2022/23, only 37.71 per cent of total annual revenue and grant estimates of Rs. 1458.6 billion is met. This includes Rs. 529.1 billion (37.71 per cent of the yearly target) of revenue and Rs. 4.8 billion grant (8.66 per cent of the target).

Meanwhile, mobilisation of capital budget has remained pathetic following the trend of previous many years with just 18.44 per cent utilisation of Rs. 380.3 per cent allocation. Recurrent expenditure, which is used to finance everyday work of the government including the salary of the employees and maintenance of facilities, stands at 46.36 per cent (Rs. 548.5 billion) of the allocation of Rs. 1183.2 billion.

Last year, the government had raised Rs. 628.8 billion in revenue during the same period which was 53.27 per cent of the total estimates. But the expenditure was only 37.69 per cent – Rs. 615.4 billion. The size of the budget in the last fiscal 2021/22 was Rs. 1632.8 billion.

It seems that the sluggish mobilisation of capital budget has given some relief to the government. If the development allocation had been fully utilised, the government would have been in greater pressure to manage the fund to finance it. Recent temporary ban on the crusher industry across the country, and significant price rise in construction materials like cement, iron bars due to the Russia invasion over Ukraine has slowed down the development works.  

Prime Minister Pushpa Kamal Dahal 'Prachanda' and Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel have been expressing serious concerns over the situation and, according to them, have been putting efforts to bring the situation back to normal.

Amidst the poor budget performance, the government has adjusted the budget and lowered the annual target of income and expenditure. During the mid-term review of the budget of the current FY 2022/23, DPM Paudel lowered the budget by 14 per cent to Rs. 1549.99 billion.

Recurrent budget is brought down to Rs. 1021.9 billion (86.37 per cent) from earlier Rs. 1183.2 billion and capital allocation of Rs. 380.3 billion is revised to be Rs.313.8 billion which is 82.51 per cent of the earlier allocation. Meanwhile, budget of financial management is adjusted to 93.05 per cent of the initial allocation of Rs. 230.2 billion.

Likewise, total revenue estimates have also been scaled down by 11.29 per cent of the total target of Rs. 1403.1 billion. Now the government aims to collect Rs. 1244.7 billion in revenue this year.

Published in The Rising Nepal daily on 22 February 2023. 

Silicon Valley company launches office in Nepal

Kathmandu, Feb. 22

SecurityPal, a company founded by an entrepreneur of Nepali origin in the United States of America, has started its service in Nepal.

It has opened Security Operations Command Center (SOCC) in Kathmandu on Tuesday. Ambassador of the United States of America, Dean R. Thompson, inaugurated the company which has its central office in the Silicon Valley, USA.

"SecurityPal helps scaling companies and enterprises deal with the complex and evolving nature of security reviews and questionnaires. The company says that the command centre will support the security personnel of the client company," the company said in a statement.

Inaugurating the company, Ambassador Thompson expressed his belief that companies like SecurityPal would benefit dynamic entrepreneurs and companies of Nepal.

Last year, the company had announced a $21 million Series A investment led by Craft Ventures. The command centre is built under the same, read the statement.

The company entered the market with the goal of becoming a leading organisation for entrepreneurs. The company said that it wants to ensure that there will never be a decrease in income and safety due to safety review work. "With experienced security analysts, this company will provide services in Japanese, German, Spanish, Portuguese, French and other languages," it said.

The company believes that after it fulfills the security requirements of the customers, those companies can focus on their main business operations, said Pukar Chandra Hamal, Founder and CEO of SecurityPal.

According to him, the company will be operational 24 hours a day, seven days a week. He also said that he is confident that his company would provide reliable services in the Nepali market.

Published in The Rising Nepal daily on 23 February 2023.

FNCCI shows reservations about new food quality bill

Kathmandu, Feb. 18

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has expressed its serious reservations over the bill to amend and integrate the laws related to food hygiene and quality which has been tabled in the federal parliament.

“If this law is passed as it is, no food-related industry will be able to operate in the country,” a delegation of FNCCI led by its Vice-President, Anjan Shrestha, said to chairman of CPN-UML, KP Sharma Oli.

The delegation of the business organisation had called on Oli, who is also the leader of the ruling coalition and former prime minister, on Sunday afternoon at his residence in Balkot, Bhaktapur, to express private sector’s reservatoins to various provisions mentioned in the proposed law. The delegation included FNCCI’s Commodity Council’s vice-chair, Arniko Rajbhandari, Export Promotion Committee’s chair, Manish Lal Pradhan, and presidents and office bearers of commodity associations related to food grains and products.

The delegation said that although the FNCCI had submitted a three-column amdnement proposal including the concerns and suggestions from the private sector to the members of the Legislative Committee of the National Assembly, the bill is presented as it is in the parliament.

The FNCCI demanded to include provision to mention ‘Best before date’ in the consumer products that have mentioned ‘Food handler protocols and food safety rules’ as per the international practice. Likewise, innocent food traders should be provided financial compensation if the government bans the sell and distribution of certain products on the basis of misgivings and without any evidence.

While arranging for the return of defective or low-quality batch of food products by publishing a public notice, sale and distribution of other batches produced or processed by the food entrepreneur will also be seriously affected. Therefore, the delegation suggested that the provision of public notification to return the goods should be removed.

“Similarly, when the report of the laboratory is not consistent due to various technical problems, a review should be arranged based on the order issued by the concerned government agency on the basis of the report,” said Shrestha.

If the consumer's health is harmed due to the consumption of contaminated or low-quality food, compensation is paid, so it is unfair to imprison the businessperson and charge excessively high fines. “The provision of imprisonment and excessive fines should be removed, the offenses under the Food Hygiene and Quality Act should be kept under criminal offences, and the provision of imprisoning entrepreneurs, businessmen and traders for the entire duration of the trial should be removed,” the delegation said to Oli.

The FNCCI also suggested that since the Food Hygiene and Quality Act is a special law in relation to food, in order to maintain the uniqueness of this act, it is necessary to provide for prosecution only in accordance with this act in relation to the offenses mentioned in this act, the provision of prosecuting cases in accordance with other laws for the offenses under this act should be removed.

In response, Oli assured the delegation that he would support the amendment of the clauses of the bill that would create a situation where industries are not shut down as he believed that the law should be introduced with the aim to protect the industry and health and safety rights of consumers.

Published in The Rising Nepal daily on 19 February 2023.

Nepal's Diyalo Technologies, Indias’ JanaJal sign MoU

Kathmandu, Feb. 18

 Nepal's Diyalo Technologies has signed a Memorandum of Understanding (MoU) with JanaJal, India's leading safe water services platform, to focus on the challenges of drinking water through technology sharing.

JanaJal is engaging in digitising the water treatment and last mile delivery of safe water through technology, Diyalo said in a statement.

With the MoU, it has been agreed to cooperate strategically and commercially to solve the challenges in the drinking water sector of Nepal and India through the exchange and integration of their respective technologies.

P.R. Khanal, Founder and CEO of Diyalo and JanaJal’s Founder and CEO, Dr.  Parag Agarwal signed the MoU on behalf of their respective organisations.

As per the MOU, JanaJal will support the expansion of the smart water management system/assets management system developed by Diyalo Technologies in the Indian market, while Diyalo will support the expansion of JanaJal’s water ATMs and 'Water on Wheels' in Nepal.

"In addition to this, it has also been agreed to conduct various training programmes in Nepal and India and to exchange their experiences and best practices in technology implementation to help improve access to safe drinking water," read the statement.

Diyalo has developed IOT-enabled web-based software, mobile application and water intelligence system in the area of financial good governance, water quality monitoring, compliance and regulation, water leakage measurement, customer experience enrichment, assets management, water production and distribution automation in order to effectively manage water utilities, improve their sustainability in order to ensure the right of people on safe drinking water services.

These technologies have helped utilities for maintaining transparency, good governance, enhanced revenue, reduced cost, and improved quality, better customer relationship. It has digitised about 700 utilities in Nepal so far, and is preparing for the launch in international market including India.

Similarly, JanaJal operates more than 800 water ATMs and existing Water Treatment Plants across India that are remotely monitored through their proprietary IOT technology platform called JJSUITE.

JanaJal aims to expand its operating footprint of decentralised water ATMs and Water on Wheels in Nepal through implementation of customised three wheelers that will help create jobs, provide social entrepreneurship opportunities for people and empower women and children who will no more face the challenge of procuring safe water for their households.

Published in The Rising Nepal daily on 19 February 2023.

Students in South Asia lose future earnings due to COVID-19 school closures: WB

Kathmandu, Feb. 17

A new report by the World Bank has found that in South Asia, today’s students could lose up to 14.4 per cent of their future earnings due to COVID-19-induced education shocks.

The cognitive deficit in today’s toddlers could translate into a 25 per cent decline in earnings when these children are adults, the report, 'Collapse and Recovery: How COVID Eroded Human Capital and What to Do About It' informed.

In South Asia, between April 1, 2020 and March 31, 2022, schools were fully or partially closed for 83 per cent of the time—significantly longer than the global average of schools being closed for 52 per cent of that same period. Among the school aged children, on average, for every 30 days of school closures, students lost about 32 days of learning.

"This is because school closures and ineffective remote learning measures caused students to miss out on learning and to also forget what they had already learned. As a result, learning poverty – already 60 per cent before the pandemic — has increased further, with an estimated 78 per cent of 10-year-olds in South Asia unable to read and understand a simple written text," read the report.

According to the report, the COVID-19 pandemic derailed development and caused a massive collapse in human capital for millions of children and young people across South Asia. The report included people who were under the age of 25 at the onset of the pandemic.

"Human capital—the knowledge, skills, and health that people accumulate over their lives—is key to unlocking a child’s potential and enabling the countries to achieve a resilient recovery and strong future growth," the WB said in a statement on Thursday while maintaining that yet, the pandemic shuttered schools and places of employment and disrupted key services that protect and promote human capital, such as healthcare and job training.

The report presents the first comprehensive analysis of global data on the pandemic’s impacts on young people at key developmental stages: early childhood (0-5 years), school age (6-14 years), and youth (15-24 years).

“The pandemic shut down schools, decimated jobs, and plunged vulnerable families into crisis, pushing millions of South Asia’s children and young people off-track and depriving them of opportunities to flourish,” said Martin Raiser, World Bank Vice President for South Asia.

Across the region, significant declines were observed in cognitive and social-emotional development. In Bangladesh, for example, toddlers tested in 2022 lagged far behind toddlers assessed in 2019.

Likewise, the report said that in some countries in South Asia that were covered in the report, school enrollment has not returned to pre-pandemic levels. Across South Asia, the number of people neither employed nor enrolled in education or training has increased substantially. Moreover, in several countries that were analysed, there was little sign of recovery after 18 months.

According to the WB, in the short term, for young children, countries should support targeted campaigns for vaccinations and nutritional supplementation; increase access to pre-primary education, including social-emotional skills; and expand coverage of cash transfers for vulnerable families. For school-aged children, governments need to keep schools open and increase instructional time; assess learning and match instruction to students’ learning level; and streamline the curriculum to focus on foundational learning. For youth, support for adapted training, entrepreneurship programs, and new workforce-oriented initiatives are crucial.

In the longer term, countries need to build agile, resilient, and adaptive health, education and social protection systems that can better prepare for and respond to current and future shocks.

Published in The Rising Nepal daily on 18 February 2023. 

Nepal establishes diplomatic ties with Malawi

Kathmandu, Feb. 17

Nepal and the Republic of Malawi have established diplomatic relations increasing  the number of countries with which Nepal has official relations to 178.

Ambassador/Permanent Representative of Nepal to the United Nations Amrit Bahadur Rai and his Malawian counterpart Agnes Mary Chimbiri-Molande signed a Joint Communiqué for the establishment of diplomatic relations between the two countries on Thursday at the Permanent Mission of Nepal to the UN, New York.

The two ambassadors also signed a joint letter informing the Secretary-General of the UN, António Guterres, about the establishment of diplomatic relations between the two countries, Permanent Mission of Nepal to the United Nations informed in a statement.

On the occasion, the two ambassadors exchanged views on various matters of common interest to strengthen bilateral cooperation in national and international forums.

"They also discussed the role of Least Developed Countries as a group at different forums including at the UN for the protection and promotion of the shared interests of the LDCs," read the statement. Nepal is taking over the role of the chair of the Global Coordination Bureau of LDCs from Malawi next month.

Located in Southern Africa, Malawi is also a landlocked country, sharing its borders with Mozambique, Zambia, and Tanzania. It has a total of 118,484 square kilometers of area with about 20 million population.

Both Nepal and Malawi are the members of Non-Aligned Movement (NAM), Group of 77, Least Developed Countries (LDCs) as well as Landlocked Developing Countries (LLDCs).

Published in The Rising Nepal daily on 18 February 2023. 

Global IME Bank provides Rs. 2.5 million to Nepal Police

 Kathmandu, Feb. 17

Global IME Bank Limited has provided support of Rs. 2.5 million to Nepal Police to establish 'Nepal Police-Global IME Bank Scholarship Revolving Fund' under the bank's corporate social responsibility.

GIBL and Nepal Police Welfare Fund signed a Memorandum of Understanding (MoU) on cooperation in the establishment, operation and management of the 'Nepal Police-Global IME Bank Scholarship Revolving Fund'.

Ratnaraj Bajracharya, Chief Executive Officer of the bank, handed over the cheque bearing the amount to Inspector General of Police Dhiraj Pratap Singh at a function held at the Police Headquarters, Naxal on Friday.

IGP Singh mentioned that Global IME Bank's contribution to providing scholarships to the veterans and deserving children of police personnel is invaluable and it will further help in increasing the morale of the police personnel.

Likewise, Bajracharya expressed his happiness that he was able to support the descendants of police officers working in Nepal Police, and said that there would be exchange of cooperation between Nepal Police and GIBL in the future.

Published in The Rising Nepal daily on 18 February 2023. 

Gold traders oppose seizing of ornaments

Kathmandu, Feb. 17

The Federation of Nepal Gold and Silver Dealers Association (Fenegosida) has expressed its serious concerns about the confiscating the gold ornaments, arresting entrepreneurs, giving unnecessary suffering and mental stress by the police administration in recent times.

 The federation issued a statement on Thursday saying that businessmen dealing in gold jewelry brought in according to the standards set by the state have been treated like criminals and this has not only discouraged the general businessmen, but has also created resentment towards the entire profession.

The gold businesses across the country get a total of 10 KG gold each day as directed by the Nepal Rastra Bank. Apart from the gold duly received from the bank, those coming from abroad are allowed to bring in up to 50 grams of gold jewelry without customs duty and an additional 50 grams of gold jewelry after paying the duty.

President of Fenegosida, Manik Ratna Shakya said that the provision of bringing 50 grams jewelry without customs duty and 50 grams by paying the taxes has helped fulfill the growing demand of gold in the market. According to the founding member of the organisation, Mani Ratna Shakya, the average gold demand a day stands at about 40 KG. “If Nepali migrant workers are not allowed to bring the limited amount of gold and jewelry with them, there would have been a severe shortage of gold in the domestic market,” he said.

Recently, the police have started confiscating the gold ornaments brought in the country by the migrant workers, arresting the businessmen who deal in such gold, causing unnecessary suffering and mental stress, read a statement issued by the Federation.

"When gold jewelry is brought to Nepal, the government should check its validity at the relevant customs checkpoint. Actions like making business people panic, causing unnecessary suffering in the name of monitoring are reprehensible,” read the statement.

Published in The Rising Nepal daily on 17 February 2023. 

All but one province fare poorly in performance

Kathmandu, Feb. 16

All provinces in Nepal, except one, have failed in their annual performance evaluation conducted by the National Natural Resources and Fiscal Commission (NNRFC).

According to the evaluation published by the Commission, one province has obtained 44.3 marks while the rest six failed to cross the pass marks of 40. Gandaki Province scored 38.5, Bagmati 36.1 and Lumbini 34.4 marks in the evaluation based on various 19 indicators and sub-indicators ranging from budget allocation to programme implementation. 

Madhes Province fared the worst with just 20.5 marks in performance index which the NNRFC created for the purpose of recommending financial equalisation grants for the next fiscal year 2023/24. Other poor performers include Karnali and Sudurpaschim provinces with just 25.9 and 26.1 score.

The average marks of provinces stands at 32.25.

The Commission has used the indicators like the audited amount of the concerned sub-national government from the Fiscal Year 2020/21, existing arrears, conditional grants provided to the local governments as per the formula of the NNFRC, allocated budget of previous FY 2021/22, total expenditures, capital expenditure, revenue garget and collection, assessment of the annual income and expenditure estimates, index of air quality in the concerned province and forest management.

Meanwhile, the local bodies fared better than the provinces with most of the obtaining scores higher than 50.

Narainapur Municipality of Banke district has topped the local government category with 78.51 score. It is followed by Pyuthan Municipality of Pyuthan with 77.26 marks, Mangla RM of Myagdi with 77.09, and Sisne RM of Rukum East with 77.

It is interesting that most of the top scorers are the rural municipalities. Likewise, the local bodies in the western part of the country have obtained better marks.

Butwal Sub-metropolitan City is the only city among the 17 large cities that scored 73.24 marks. Among the metropolitan cities Bharatpur topped the list with 72.22 marks, followed by Biratnagar (59.24), Lalitpur (58.43), Kathmndu (56.52), Birgunj (53.23) and Pokhara (48.66).

Rural municipalities including Chisapani of Achham district, Ganyapdhura of Dadeldhura, Bhagwatimai of Dailekh, Subhakalika of Jajarkot, Jagdulla of Dolpa, Madane of Gulmi, Sarumarani and Gaumukhi of Pyuthan, and three municipalities Sandhikharka of Arghakhanchi, Resunga of Gulmi and Dudhaul of Sindhuli have crossed 72 score.

Dhanauji Rural Municipality of Dhanusha district has scored just 29 marks.

 

Top scoring local bodies

Narainapur RM of Banke – 78.51

Mangala RM of Myagdi – 77.09

Sisne RM of Rukum East – 77

Pyuthan Municipality of Pyuthan – 77.26

Sarumarani RM of Pyuthan – 76.7

Gaumukhi RM of Pyuthan – 76

Madane RM of Gulmi – 76

Gaumukhi RM of Pyuthan – 76

Sandhikharkha Municipality of Arghakhanchi – 75

Ganyapdhura RM of Dadeldhura – 74.77

Published in The Rising Nepal daily on 17 February 2023.

Microfinance companies agree to return Rs. 1.6 billion raised as fees from clients

Kathmandu, Feb. 15

The microfinance companies have agreed to return Rs. 1.60 billion which they raised in addition to the service charges to the customers, the Ministry of Finance (MoF) informed on Wednesday.

A meeting of Deputy Prime Minister and Minister for Finance, Bishnu Prasad Paudel, Deputy Governor of Nepal Rastra Bank (NRB), Bam Bahadur Mishra, President of Nepal Microfinance Backers Association, Prakash Raj Sharma, and representatives of other concerned agencies held at the MoF at Singha Durbar has also agreed that microfinance will not charge more than 1.5 per cent service fee per year.

Secretary at the MoF, Toyam Raya, Executive Director of NRB, Dr. Prakash Kumar Shrestha, Chief of Financial Sector Management and Corporation Coordination Division at the MoF, Jhakka Prasad Acharya, and President of Microfinance Association of Nepal, Jagat Pokharel, were also present at the meeting.

Similarly, it has been agreed that the provision that one customer cannot take loans from more than one microfinance institution would be implemented effectively.

According to a microfinance banker, the amount which was agreed to be refunded is almost one-fifth of the total service fee the microfinance institutions (MFIs) raise in a year.

Sharma said that the meeting discussed the contemporary issues of the microfinance sector and agreement was made to refund the additional service fee to the concerned customers of the respective MFI within a week. However, the agreement was not something fresh, it is just a preponement of the decision of the MFIs to return the money within a couple of weeks after the annual general meeting of the respective companies.

"Microfinance banks were ready to refund the additional fees but the meeting today agreed to give away the money immediately," Sharma said to The Rising Nepal.

However, MFIs said that the situation arose due to the gap in understanding about the pre-matured loan. Stating that they were not against the central bank's directives, a microfinance banker said that there were different explanations about the service fee.

"MFIs are charging 1.5 per cent service fee when a creditor clears his/her loan earlier than the maturity date. However, the NRB maintains that the MFIs can't charge additional 1.5 per cent annual fee if the loan is repaid and another loan is obtained at the same time," he said.

However, he maintained that a few microfinance companies have made it their strategy to motivate their clients to clear loan in 3-5 months and obtain another loan which means 1.5 per cent more income from loan servicing. There are customers who want to clear the remaining portion of loan and obtain a larger amount for business and other purposes.

Spokesperson of the NRB, Dr. Gunakar Bhatta, also said that the government and the central bank had taken the steps to address that particular practice.

Likewise, the meeting also agreed upon preparing the details of the customers who are unable to pay their loans due to various reasons within one month and to utilise the money from customer protection fund to support such customers.

DPM Paudel instructed the NRB to study and submit a report on the contributions made by the MFIs in the economy, employment, tax, financial literacy and social sectors. He also directed the central bank to solve the problems in microfinance sector.

Published in The Rising Nepal daily on 16 February 2023.

Consumers predict price hikes in next three months

Kathmandu, Feb. 15

A recent survey of the Nepal Rastra Bank has shown that the majority of consumers have a feeling that the price of goods would go up in the next three months.

According to the results of Inflation Expectations Survey (IES) of the second quarter of the current Fiscal Year 2022/23 conducted by the central bank, 84.6 per cent of respondents have expected price levels to increase in next three months.

Likewise, 92.3 per cent of respondents have expected price levels to increase over the next one year.

The survey was conducted during January 8-14 this year among individual respondents from 60 market areas through field interviews. The results are based on responses from 2,010 individuals.

However, the share of respondents expecting price increases in next three months as well as next one year has decreased from mid-October, 2022. It was 86.6 per cent then which was also lower than that of mid-July 2022 when 94.7 per cent participants had said that the price would go up in the following three months' period.

The share of respondents expecting price increase in food and its sub-group except fish, meat, milk, ghee and oil and hotel and restaurant has increased. However, the increment is nominal with expectation for food price hike going up to 88.9 per cent in mid-January from 87.2 per cent three months earlier, while respondents thinking the price of vegetables and fruits would go up to 86.5 per cent in January from 82 per cent in October last year.

The share of respondents expecting price increase in non-food and services and real estate (housing) during the next three months has slightly decreased compared to that of mid-October, 2022. The expectation percentage in terms of non-food and services has come down to 74.5 per cent from 76.1 per cent, according to the report.

The share of respondents expecting price increase in one year ahead across the entire food products, except for fish, meat, milk, ghee and oil, drinks and tobacco and hotel and restaurant along with non-food and services groups has decreased compared to October last year.

Median inflation expectation for three months ahead and one year ahead has remained same compared to mid-October 2022 and mean inflation expectation for three months ahead and one year ahead has decreased, said the NRB.

Median inflation expectations for three months and one year ahead stand at 10.0 per cent and 12.0 per cent respectively which means individuals expect inflation to remain stable in the near term as well as in medium term.

Published in The Rising Nepal daily on 16 February 2023.

SCT and RBBL sign agreement for SCT-UPI debit card

 Kathmandu, Feb. 15

Smart Choice Technologies Limited (SCT) and Rastriya Banijjya Bank Limited (RBBL) have signed an agreement for the operation of SCT-UPI debit card services.

SCT is a company licensed by the Nepal Rastra Bank to work as the Payment System Manager and RBBL is an 'A' class commercial bank.

The agreement letter was signed by Narayan Prakash Bhuju, Chief Executive Officer of SCT, and Kiran Kumar Shrestha, CEO of RBBL.

We hope that this agreement will help the field of digital payments in Nepal as a whole, SCT said in a statement on Wednesday.

After this agreement, customers of RBBL will be able to get modern, safe, quality and reliable services of SCT-UPI debit card.

Also, by using the SCT-UPI network, customers can use the ATM, POS, e-commerce in Nepal and India.

Published in The Rising Nepal daily on 16 February 2023.

Cottage, small industries to be exempted of taxes

Kathmandu, Feb. 14

Prime Minister Puspa Kamal Dahal Prachanda said on Tuesday that cottage and small industries that have potential for growth would be freed from all taxes for a certain period, and special programme would be launched to enhance their capital, technology and access to finance and market.

Addressing the inaugural programme of the 16^th International Industry Trade Fair and Cottage Industry Festival and 6^th Organic Agriculture Exhibition 2023 that kicked off at the Bhrikutimandap Exhibition Centre in the Capital, he pledged to introduce special programmes with redefining the subsidised loans provided to the cottage and small industries in the manufacturing sector to encourage them.

The Prime Minister also said that the attention of the government had been drawn to the complicated system of submitting documents and revenue from ward of the local body to the federal government as well as to the Company Registrar's Office for the registration and renewal of the cottage and small industries. "It has a negative impact on the creation of the business-friendly environment. The government will soon find a solution to it," he informed.

In the past several years, the government has announced to establish micro-enterprise village, cottage and small industry village at the local level but there has been no progress. According to PM Prachanda, arrangements will be made for the establishment and operation of such industrial village by the federal government. Grant would be provided to the local governments for the operation of such facilities.

Acknowledging that the policies and programmes of the three levels of the government failed to compliment each other in terms of building a positive industrial environment in the country, the Prime Minister pledged to formulate progressive industrial policy in coordination with all of them.

Meanwhile, he also said that the concessional loans for women, youth and agricultural entrepreneurs will be made more effective. Likewise, for the promotion of production and consumption of indigenous goods, the Prime Minister's Office will form a task force with the participation of the private sector for the immediate implementation of Prime Minister Domestic Product Production and Consumption Promotion Programme.

PM Prachanda further said that agricultural-based industries could be the most viable business for Nepal however, there is a need to produce agricultural products that are original and linked to our culture and tradition.

President of Federation of Nepalese Cottage and Small Industries (FNCSI), Umesh Prasad Singh, said that the entrepreneurs are on the verge of bankruptcy due to the acute shortage of liquidity in the recent past and exorbitant bank interest rates.

"The cottage and small entrepreneurs neither have the facility to get refinancing nor ability to pay the interest in the pretext of decreasing production and business and increasing cost and interest rates," he said.

Singh demanded to continue with the concessional loans for women, youth and agriculture entrepreneurs and make it more effective.

Likewise, Minister for Tourism, Industry and Cooperatives of Bagmati Province, Dambar Tamang, stressed on harnessing technology to expand market, and promote Nepali products in the international markets.

According to him, cottage industries also help to empower women with skill development, application and promotion.

"We need to promote our original products, that carry our culture, tradition and use local resources globally. Entrepreneurs should pay attention to the branding of their products," said Minister Tamang.

According to the FNCSI, there about 246,000 cottage and small industries in operation across the country. This sector has total investment of Rs. 353 billion and provided employment to 2.46 million people.

The expo features various products ranging from agriculture, garment, food, natural fibre, technology, spices and pickles to leather goods.

The fair has come back after a pause for three years in the past due to the COVID-19 pandemic. It will run for five days till 18 February. 

Published in The Rising Nepal daily on 15 February 2023.

Govt lowers budget size

Kathmandu, Feb. 12

The government has adjusted the size of budget of the current Fiscal Year 2022/23 by lowering the total expenditure by 14 per cent which brings the budget to Rs. 1549.99 billion.

According to Deputy Prime Minister and Finance Minister, Bishnu Prasad Paudel, the size of budget is Rs. 244 billion from the earlier Rs. 1793.8 billion. Speaking at the federal parliament on Sunday, he said that the estimates for the recurrent budget are brought down to Rs. 1021.9 billion (86.37 per cent) from earlier Rs. 1183.2 billion.

Likewise, initial capital allocation of Rs. 380.3 billion is revised to be Rs.313.8 billion which is 82.51 per cent of the earlier allocation. Meanwhile, budget of financial management is adjusted to 93.05 per cent of the initial allocation of Rs. 230.2 billion.

DPM Paudel also revised the estimates of revenue collection. He scaled down the total revenue estimates by 11.29 per cent of the total target of Rs. 1403.1 billion. Now the government aims to collect Rs. 1244.7 billion revenue in the current fiscal year 2022/23.

The federal government will mobilise revenue of Rs. 1101 billion while Rs. 143.7 billion will be distributed to the provinces and local bodies. Similarly, the target for foreign grants has been brought down to Rs. 38.4 billion from earlier estimates of Rs. 55.4 billion, and foreign loans is downsized to Rs. 170.5 billion against the earlier target of Rs. 242.2 billion.

However, the size of domestic borrowing is not reduced significantly as it is reduced to Rs. 240 billion from earlier estimate of Rs. 256 billion.

The downsizing of the budget, ongoing economic contraction is expected to hit the economic growth. "Considering the current growth of the economy, the target of achieving an economic growth rate of 8 per cent for this year does not seem achievable," said DPM Paudel.

In the field of agriculture, it is expected that there will be some increase in the production of rice this year and it is seen that tourism sector is gradually improving. Despite these positive aspects, economic activity seems to have slowed down as the manufacturing industries are not able to operate at full capacity, DPM told the parliament.

Likewise, against the target of containing inflation withing the limit of 7 per cent, the consumer price index has reached 7.26 per cent.

However, in the six months of the FY 2022/23, the remittance inflow in Nepali currency increased by 24.3 per cent and reached Rs. 585.8 billion. Likewise, in the same period, the current account is in surplus of Rs. 97 billion, while the total foreign exchange reserve has increased by 10 per cent to Rs. 1337.2 billion compared to Rs. 1215.8 billion. It is sufficient to cover the goods imports for 10.4 months and goods and services imports for 9.1 months.

Meanwhile, in the first six months of this year, the total government expenditure has been Rs. 576.3 billion, which is 13.7 per cent more than the previous year. Compared to last year, the recurrent expenditure increased by 11.9 per cent, up from Rs. 455.1 billion, while capital expenses increased by 5.3 per cent to Rs. 53.4 billion.

Likewise, the target for revenue collection by the end of the first half of the current fiscal is Rs. 490.4 billion against the target of 651.6 billion, which is 24.8 per cent less than the target.

Meanwhile, Deputy Prime Minister Paudel while presented half-yearly budget review of FY 2079/80 in the House of Representatives on Sunday. In his address, he said that the government would focus on meeting development targets ensuring resources to the national pride projects.

Addressing the Lower House, the Deputy Prime Minister said that he had concentrated his efforts on solving problems witnessed in the financial sector. “I tried to get confidence of the private sector to improve the distortions and deviations seen in revenue mobilization, and to solve the existing problems in budget implementation,” he said.

He informed the House that the government had adopted a policy of maintaining budget balance, increasing the quality of prioritization of expenditure, emphasizing on increasing capital expenditure, reducing non-essential expenditure and maintaining austerity, making revenue administration more agile, increasing tax compliance and cracking down on leakages.

DPM Paudel further said even though some of the indicators of the economy were in a risky state due to the negative trends that appeared in the world economy, it was on the path of improvement now.

MPs in the House asked questions regarding the statement of the Deputy Prime Minister Paudel and sought clarification. They raised questions about incentives for the producers, relief management and policy facilitations from the government to bring the economy in a normal track. MP Ramhari Khatiwada said only with 16 per cent capital budget spent  in half a year, how would the Minister work for the development of the country. He also asked what measures would be taken to control growing inflation.

Similarly, Prakash Jwala seemed to be worried about the interest rate of commercial banks on lending. “Government should tame interest rates, what plans do you have for managing liquidity?” he asked. 

Another MP Rajendra Prasad Pandey said that the economy was in an uncomfortable position, and asked how the common programmes of the alliance government were incorporated in it. He also asked what was the programme to improve the economy. The DPM responded to the question stating that the common programmes of the alliance government were determined for 5-year tenure which would be carried out within the time frame.

 

Minister Paudel responded to the queries of the MPs clarifying that the previous government had drafted the budget document for the year. According to him, monetary policy would establish a mechanism to control bank interest rates. DPM Paudel also assured the MPs that the budget for fertilizer purchase would not be cut. “There would not be lack of budget for national pride projects,” he added.

 Report tabled

'Fourth Annual Report of the Tharu Commission was submitted to the Lower House on Sunday. Federal Affairs and General Administration Minister Amanlal Modi presented the report on behalf of Prime Minister in the House.

Condolence message passed

Meanwhile, the House of Representatives unanimously endorsed condolence message on the sad demise of former MP Karma Ghale. He was a House member from Nepali Congress elected under Proportional Representation lot in 2074 BS. Ghale passed away at the age of 59 on last Tuesday while undergoing treatment at Tribhuban University Teaching Hospital. 

Published in The Rising Nepal daily on 13 February 2023.

Envoy of Norway and NKorea call on FM Paudyal

 Kathmandu, Feb. 12

Foreign Minister Dr. Bimala Rai Paudyal has held a courtesy meeting with the ambassadors of Norway and North Korea to Nepal Torun Dramdal and Jo Yong Man respectively at her office at the Singhadurbar.

Various issues of mutual relations between the friendly countries were discussed during the meeting, the Ministry of Foreign Affairs (MoFA) said in a statement on Sunday.

On this occasion, Foreign Minister Dr. Paudyal thanked the Norwegian government for the support it has been providing in the fields of education, health and gender participation.

During the meeting, Ambassador Dramdal pledged to expand the relationship between the two countries in the coming days and increase cooperation in various aspects of development.

Likewise, in the meeting with Jo Yong, the foreign minister said that since world peace is the hallmark of Nepal and the country and its people will always stand in favor of a peaceful solution to any kind of conflict.

Published in The Rising Nepal daily on 13 February 2023.

Chovar Dry Port operates domestic terminal

Kathmandu, Feb. 12

Chobhar Dry Port has started the operation of its domestic terminal from Sunday.

The first and only dry port in the country away from any border point had come into operation on 5 April 2022. But as the inflow of containers was not on a part with expectation, the Nepal Intermodal Transport Development Board (NITDB), an agency under the Ministry of Industry, Commerce and Supplies (MoICS) and manager of the port, has decided to divide it into two parts to operate domestic service as well.

The domestic terminal has parking facility for 150 trucks and containers parking capacity, warehouse of 54 X 54 square metres, vehicle weighing facility for up to 80 tonnes, load/unload sheds, and restrooms for drivers and workers.

The NITDB said that vehicles can enter and use the terminal without paying any fee. Likewise, facilities such as parking of vehicles, loading/unloading of goods, storage of goods, and other facilities will be available at a minimal fee.

"It will end the situation where the exporters have to stop their vehicles on the roadside and pay warehouse fees at a high price. They will have parking, load-unload and warehouse facility at a reasonable rate," said the Board.

Executive Director of the NITDB, Ashish Gajurel, said that due to the lack of business-related physical infrastructure in Kathmandu, there is a problem in logistics management, so the Board has initiated the service to facilitate importers/exporters through a one-door system for facilitating trade.

Construction of the dry port had begun in August 2018 and was completed in July 2021. It has 65,000 square metres space, enough to accommodate 500 containers and 500 trucks. It has facilities like quarantine, security, operator company office, banks and other essential services, three warehouses, three appraisal shades, stuffing and de-stuffing shade, weighing machines, electricity sub-station, and boundary light. Trucks and containers can directly reach the facility to clear customs and other works like quarantine. 

Published in The Rising Nepal daily on 13 February 2023.

GAN delegation leaves for US

Kathmandu, Feb. 11

A delegation of Garment Association of Nepal (GAN) led by its President Pashupati Dev Pandey has left for the United States of America to participate in the ‘Sourcing at Magic’, an international exhibition and conference of textile and related materials, being organised in Las Vegas.

According to the organisers, ‘Sourcing at Magic’ is a domestic and international gathering of manufacturers, suppliers and service providers – from apparel and footwear manufacturing to textiles, materials, components, supply chain, and technology solutions – both in-person and online.

The show will run from February 13-15, and almost 1,000 global manufacturers, sustainable suppliers and fashion tech-solutions are expected to participate in it.

The seven-member delegation from Nepal includes GAN President Pandey who represents Pure Clothing, Basanta Raj Adhikari of Himalayan Cotton and Fashion International, Thomnath Basyal and Yagya Prasad Pokharel of United Fashion and Knitting, Suresh Man Shrestha of Jampha Knitting Industries, Shachindra Pradhanang of Pradhanang Apparel Industries, and Vikash Parikh of Tricot Industries.

These industries will exhibit their products in the show, considered an important event in the global textile and garment business. It is a special event for Nepali garment industries as it is showcasing its products for the first time after COVID-19 pandemic. “It will help us to promote the market of Nepali garment products in the USA and other countries. We also expect to hold B2B meetings to find new markets,” said Pandey.

According to him, it will benefit the entire garment industry of the country. 

Published in The Rising Nepal daily on 12 February 2023.

There is contraction of demand in manufacturing sectors: CNI

Kathmandu, Feb. 8

Confederation of Nepalese Industries (CNI) has said that there has been a contraction in demand from 20 to 80 per cent in various manufacturing sectors.

In a meeting with Vice President of National Planning Commission (NPC), Dr. Min Bahadur Shrestha, on Wednesday, the CNI said that it has caused a big shock in the industry and construction sector as well.

Emphasising timely completion of development and construction projects and at the specified cost, President of CNI Vishnu Kumar Agrawal who was leading the delegation to the VP of the NPC, said that for that, the practice of awarding projects at 'low bidding' should be reformed.

Similarly, he requested to open Power Purchase Agreement (PPA), to allow the private sector to construct and operate Shaktikhor and Mayurdhap industrial areas which are not being operational on the model of India's Rudrapur Industrial Zone.

The meeting had discussed the challenges of the economy, solutions, as well as problems of small and medium industries and construction industries.

On the occasion, CNI also submitted a concept of 'Rebooting Nepali Economy' with clear steps to be taken immediately to give speed to the economy of the country which is in a challenging situation.

It also suggested measures that can be taken immediately by giving priority to the financial sector (liquidity crisis and high interest rate), industrial promotion, infrastructure, tourism, energy and information technology sector to give speed to the economy.

Vice Chairman Dr. Shrestha, said that the government is focusing on the measures to improve the economy.

He pledged necessary interventions to increase domestic production and employment. Dr. Shrestha said that there is a need to control revenue leakage and bring in more remittances through formal channels to improve the economy.

He said that the private sector should be promoted as the backbone of the economy by doing concrete and result-oriented work for the improvement of the economy.

 Published in The Rising Nepal daily on 9 February 2023. 

USAID announces $58.5 million support to Nepal

 Kathmandu, Feb. 7

The USAID has announced to provide up to US$58.5 million (Rs. 7.72 billion at current exchange rates) to advance democratic progress in Nepal, subject to the availability of funds.

US$ 40.2 million of this announcement is pat of the $659 million development objective agreement announced in 2022, informed the Embassy of the USA in Nepal in a statement on Tuesday. Administrator of the USAID, Samantha Power has announced the support at a programme in Lalitpur. She is in a two-day office visit to Nepal.

This is another high-level visit from the USA to Nepal since the Undersecretary of State for Political Affairs, Victoria Nuland visited the country in January end.

The investments announced on Tuesday include up to $20 million to strengthen inclusive democracy and prosperity in Nepal by supporting provincial and local governments to deliver public services in a more fiscally transparent and accountable manner.

Likewise, it also includez up to $18.5 million to support independent civil society organizations and media led by and for women, youth, and marginalised communities to advance community needs, fundamental freedoms, and accountability.

USAID said that it will work with these civil society organisations as they build their skills, credibility, and techniques for engaging with the government and public effectively. USAID will also partner with the media to support efforts to improve public access to credible information and more diverse narratives that will enhance social trust in the media.

The embassy said that following elections in 2022, Nepal has an opportunity to strengthen federalism, advance the inclusion of women and marginalised communities, empower its young people, and demonstrate that democracy can deliver for its citizens, and pledged to be a partner in this effort.

"USAID’s investments will help Nepal cement its democratic gains and usher in greater prosperity and resilience for the Nepali people by strengthening public financial management, independent civil society and media, democratic processes and institutions, rule of law, and private sector development," read the statement. USAID will also continue to help Nepal combat human trafficking. 

Meanwhile, the USAID also said that it looks forward to working in partnership with relevant Nepali government institutions to align our assistance with government priorities, including those in Nepal’s recently released common minimum programme.

Earlier on Tuesday, Power held a high-level meeting with Minister for Foreign Affairs Dr. Bimala Rai Paudyal.

According to the Ministry of Foreign Affairs, various topics of interest between Nepal and America such as the implementation of the Millennium Challenge Corporation's Nepal Compact programme, and US assistance to be provided to Nepal after being upgraded from the Least Developed Country (LDC) were discussed during the meeting held at the ministry on Tuesday.

During the meeting, Power expressed her commitment to further increase the support to Nepal provided by the American government.

Highlighting Nepal’s strong commitments on climate change, the Foreign Minister also shared Nepal’s view on the need of a clear roadmap and ambitious goal on climate finance.

FM Dr. Paudyal also had delivered an opening remark at the event on 'Deepening US-Nepal Democratic Partnership' as a guest speaker together with the USAID Administrator. In her remarks, the Foreign Minister highlighted the continued efforts made in the consolidation of Nepal’s democratic processes. 

Power is scheduled to meet Prime Minister Pushpa Kamal Dahal Prachanda on Wednesday. 

 Published in The Rising Nepal daily on 8 February 2023. 

Pashmina strategy aims to double exports in five years

Lalitpur, Feb. 7

The government has introduced National Pashmina Sector Strategy 2022-2026 with a target of more than doubling the export of pashmina products in a five-year period.

The strategy aims to achieve the target of exporting pashmina worth US$ 75 million (Rs. 9.75 billion in current exchange rate) by 2026.

The strategy is formulated with the support of International Trade Centre (ITC) and EU-Nepal Trade and Investment Programme which aims at enhancing capacity of officials involved in pashmina and coffee production, and promoting the export of these two products.

Joint Secretary at the Ministry of Commerce and Supplies (MoICS) Govinda Bahadur Karki, said at a  programme organised to launch the strategy in Lalitpur on Tuesday that Rs. 588 million is needed to implement the strategy where the private sector will mobilise 33.4 per cent and public sector 66.6 per cent.

Of the total goat population in Nepal, 10 per cent are Chyangra (mountain goats) from which pashmina is extracted. About 15 districts in the hills and mountains primarily Mustang, Mugu, Jumla, Dolpa and Manang are chyangra farming areas.

According to Karki, Nepal produced 4.5 million pieces of pashmina in 2019, of which 2.2 million pieces are exported worth about US$ 27.6 million.

Nepal exports pashmina mainly to UK, USA, France and Germany but export share has recently increased in Japan, Norway and Canada. "Export of woven and knitted products have followed the world market trends with exports increasing in knitted products and decreasing in woven ones," said Karki.

Stating that export is not so encouraging, he pointed at the need of finding new international market destinations. Likewise, the subnational governments should give priority to the promotion and growth of pashmina.

Despite being the sector to receive a tremendous amount of foreign support in grants and technical cooperation compared to other exportable goods of Nepal, progress in the promotion and growth of this product is not at par with expectation, experts said.

Minister for Industry, Commerce and Supplies, Damodar Bhandari expressed his commitment to support the pashmina value chain in Nepal.

Earlier in the morning on Tuesday, he performed stone-laying of a woolen yarn processing plant, first of its type in Nepal, in Harisiddhi of Lalitpur. "It will help in producing pashmina in Nepal and support farmers as well," he said.

The plant will complete the pashmina value chain in the country.

"Government, private sector and development agencies involved in pashmina sector have collaborated to produce this strategy and I hope they will continue to work together to develop this sector and promote export," said Minister Bhandari.

Likewise, Madhu Kumar Marasini, Secretary at the MoICS, said that there is a need to support chyangra farming in upper hills and mountains. “We should not only sell the product but also the stories behind the products like pashmina,” he suggested.

"We must promote the export of 'low volume, high value' and chyangra pashmina is one of such items. It can support in the local as well as national prosperity," he said.

Vijoy Dugar, President of Nepal Pashmina Industry Association (NPIA), said that private sector producers will be immensely benefitted from the strategy as well as the processing plant.

Dr. Ashish Shah, Director of ITC, said that pashmina has a potential to reduce rural poverty.

Quality enhancement, establishment of pashmina processing plant, increasing the competitiveness of pashmina sector, and access to niche market are the requisite to promote and enhance its export, he said.

Peteris Ustubs, European Union's INTPA Director of Middle East, Asia and Pacific, pledged EU's support to find market for Nepali pashmina in Europe.

According to him, the new strategy addresses the challenge in pashmina processing and production, enhancing quality and productivity from framers to industries.

 Published in The Rising Nepal daily on 8 February 2023.