Poor revenue poses challenges to public fiscal management

Kathmandu, June 30

Although government expenditure has caught a worse trajectory for the last three years registering poor yet identical achievements, income has been severely disturbed in the current fiscal year.

The government could achieve only 62 per cent of its income target by Thursday, June 29, according to the Financial Comptroller General Office (FCGO). Through the budget of the current fiscal year 2022/23, the government had announced to raise a total revenue (including non-tax income) of  Rs. 1458.6 billion but it could collect only Rs. 899.7 billion.

This poor revenue performance has a detrimental impact on the overall budget performance as the public expenditure in the same period has reached Rs. 1229.8 billion creating a gap of Rs. 330.1 billion which has posed a threat to the government to manage its operations for the remaining period of the current fiscal year.

The challenge is likely to be aggravated further with the clearance of the dues to the contractors involved in the public construction and development works. According to the Federation of Contractors' Association of Nepal (FCAN), the government has a liability of about Rs. 50 billion to the contractors.

FCAN's President Rabi Singh said that only Rs. 20 billion has been paid to the contractors in the past couple of months. According to him, the government agencies have cited the lack of funds as the main obstruction to clearing the contractor's bills.

 

Poor fiscal management

The FCGO statistics showed that revenue mobilisation has remained the poorest this year compared to the past few years. This is worse even compared with the FY 2020/21, and FY 2021/22, the years when the business and economic activities were severely disturbed by the Coronavirus pandemic.

In the last FY 2021/22, the government collected Rs. 1025.5 billion in revenue by the end of the second week of the last month of the fiscal which was 82.67 per cent of the total annual target of Rs. 1240.5 billion.

Likewise, in 2020/21, the collections were 82.45 per cent – Rs. 884.1 billion of the annual estimate of Rs. 1072.2 billion.

Sensing the inability to meet the annual revenue target, the government had revised the revenue estimates by 11.29 per cent of the total target of Rs. 1403.1 billion to Rs. 1244.7 billion this year.

Economists and financial experts said that the poor revenue mobilisation was the result of poor fiscal management and authorities' failure to gauge the impact of internal and external factors.

Former member of the National Planning Commission, Dr. Dilli Raj Khanal, who also led Public Expenditure Review Commission, said that the worse scenario in the revenue sector was the result of multiple factors like import restrictions, tight monetary policy, high inflation and shrinkage in industrial production.

Owing to the depleting foreign currency reserves during the economic boom in the recovery period after the pandemic, the government imposed a moratorium on the import of luxury vehicles, liquors and other items and imposed a provision of maintaining cash margin while opening letters of credit for dozens of items.

Likewise, tight monetary policy and the tough stance of the government on real estate caused a debacle in multiple areas. Meanwhile, the Russian invasion of Ukraine further disturbed the international supply chains affected by COVID-19 and sent the price of goods up.

Similarly, high inflation decreased the demand and industrial production reached a record low with large industries operating at 30-40 per cent of their capacity. "In addition to these, the black economy flourished during the difficult period this year. The perpetrators of the black economy are trying to influence the government to wash their wealth," said Dr. Khanal.

He maintained that the government announced an 'unnecessarily large' budget and revenue target for this year.

 

Capital expenses remain low

The government has mobilised only 43.46 per cent of the capital budget so far. With only 17 days remaining to conclude the current FY, it has a burden to spend Rs. 148.5 billion – the size adjusted during the mid-term review of the budget in February this year.

During the mid-term review of the budget for the current FY 2022/23, then Finance Minister Bishnu Prasad Paudel lowered the budget by 14 per cent to Rs. 1549.99 billion.

Published in The Rising Nepal daily on 1 July 2023. 

CNI requests for successful budget implementation

Kathmandu, June 29

The newly elected office bearers of the Confederation of Nepalese Industry (CNI) have urged Prime Minster Pushpa Kamal Dahal Prachanda to implement the budget successfully to keep the economy running.

In the first meeting with the Prime Minister at his residence in Baluwatar on Thursday since their election to the CNI office last week, the delegation led by CNI President Rajesh Kumar Agrawal also urged the PM to create an environment where capital expenditure is done on time.

Discussing the current status of the country's economy, Agrawal asked for the representation of the private sector in the monitoring committee announced by the government for the successful implementation of the budget.

He also emphasized that in order to achieve economic growth of 6 per cent targeted by the budget, a loose monetary policy was necessary to keep the economy running.

Agrawal said that if taxes were imposed on Further Public Offerings (FPOs), mergers and acquisitions, it would discourage investors and send a negative message to the international community. He asked for the promotion of indigenous products and to control illegal imports in a ruthless manner to increase the collection of government revenue.

The CNI also stressed on the need for immediate implementation of the agreement regarding electricity export and electronic payments made with India during the recent visit of the Prime Minister there.

In response, PM Prachanda said that cooperation with the private sector including the CNI was a priority to mitigate pressure and hardships on the country's economy.

Published in The Rising Nepal daily on 30 June 2023. 

DPM urges China to open border, trading points

Kathmandu, June 29

Deputy Prime Minister (DPM) and Minister for Home Affairs, Narayan Kaji Shrestha, has urged China to help open more border ports including seasonal trading points facilitating trade and human movements as well as supporting lives and livelihoods of the border inhabitants.

He made this request to Vice Premier of China, He Lifeng, during a bilateral meeting on Wednesday afternoon in Chengdu, informed Consulate General of Nepal in Chengdu in a statement.

In response, he agreed to gradually open more border ports and trading points for trade and human movement.

During the meeting, the two leaders exchanged views on the matters of mutual interest between Nepal and China including development cooperation, trade, investment, tourism, connectivity, implementation of Chinese-aided projects, people-to-people exchanges, among others.

"They expressed their commitment to further strengthening bilateral relations and cooperation between the two countries. Acknowledging the importance of frequent exchange of high level visits between the two countries in nurturing bilateral relations and cooperation, they expressed their happiness over the increasing bilateral engagements between the two countries in recent days, more particularly after the pandemic," read the statement.

The two delegations also agreed to work together in the areas of disaster management.

DPM Shrestha said that the present government in Nepal has accorded priority to post- pandemic recovery and rapid economic growth and requested for China’s enhanced level of support.

Vice-Premier, He, appreciated Nepal’s unflinching support to One China Policy and strong commitment for not letting its soil to be used against China’s interests. He assured of continued support to Nepal in its development endeavour.

DPM Shrestha reached Chengdu on Wednesday, June 28, leading a 7-member delegation to attend the 19^th Western China International Fair being held in Chengdu from June 29 to July 3.  

He addressed the opening ceremony of the fair on Thursday morning as the Keynote speaker.

Nepali delegation to Chengdu includes Dinesh Kumar Ghimire, Consul General of Nepal in Chengdu, Lok Bahadur Thapa, Joint Secretary of Ministry of Foreign affairs, Rudra Devi Sharma, Joint Secretary of Ministry of Home Affairs, Mahesh Baral, Joint Secretary of Ministry of Industry, Commerce and Supplies and Suresh Kaji Shrestha, Personal Secretary to the DPM. 

Published in The Rising Nepal daily on 30 June 2023. 

Prime Ceramics launches tiles made in Nepal

Kathmandu, June 29

Prime Ceramics Pvt. Ltd. has started the sale of its ceramic tiles under the brand 'Prime-Tiles with stile' since Thursday.

The company claimed that the company is Nepal's first and largest producer of all kinds of tiles for walls and floorings.

"With the introduction of our exquisite products, Nepali consumers can now buy international-standard tiles manufactured in Nepal at a competitive price," Chairman of the company, Ashish Garg, said at a press meet organised in the Capital to announce the launch of the product.

Spread over a land area of 70,000 sq. meters at Brindaban Municipality – 6, Rautahat, the company has set up an ultra-modern, fully automated manufacturing unit with the adoption of Italian technology.

The production facility has bought its machines under a turnkey arrangement with SACMI, an Italian multinational and world leader in ceramic technology. Armed with the latest technology, Prime – Tiles with Stile has maintained a high standard of international quality and can compete with any renowned global brand.

Nepal has been importing tiles worth more than Rs 15 billion per annum. Higher freight charges and excise duty, supplemented by other additional costs incurred during the import, result in expensive tiles for Nepalis, which, at times, are even beyond their reach, said Prashant Agrawal, Managing Director of the company.

According to him, Prime Ceramics is going to fulfill one-fourth of the current market demand. Domestic production ensures import substitution, reduced foreign currency outflow, local employment, and the use of domestic minerals and other raw materials to a large extent, he said.

With production at the doorstep, the company’s products have the advantage of timely delivery to the customers and customised design developed as per the requirements and tastes of architects as well as designers. Such domestic industries will not only help the end users get tiles at a cheaper price but also fulfil the common man's dream of building and owning a beautiful home.

Published in The Rising Nepal daily on 30 June 2023. 

Esewa Money Transfer partners with Al Muzaini Exchange Kuwait

Kathmandu, June 29

Esewa Money Transfer has entered a new remittance partnership with Al Muzaini Exchange Kuwait-a leading foreign exchange company.

Esewa is bringing remittance home from more than 200 countries across the world.

With the new business agreement, Nepalis working in Kuwait can send remittances to Nepal by reaching out to 118 branches of Al Muzaini Exchange, Esewa informed in a statement on Thursday.

Meanwhile, the beneficiaries in Nepal can receive remittances from more than 13,800 plus dedicated remit agents, more than 100,000 cash pick-up enabled wallet agent locations of Esewa Money Transfer, major banks, and financial institutions, along with their branches, and directly in beneficiaries’ eSewa wallet.

The senders can send remittances directly to any bank account or eSewa wallet from Al Muzaini Exchange. The beneficiaries can also receive Rs. 77 bonus upon loading cash remittances in their eSewa wallet.

Speaking on the occasion, CEO of Esewa Money Transfer, Ajesh Koirala said, “With this agreement, we hope to connect more Nepali working in Kuwait to their families back in Nepal and promote formal remittance channels”.

Al Muzaini Exchange is a leading foreign exchange company in Kuwait that operates 118 branches.

 According to Esewa, the company is recognised globally for its efficient and secure money transfer services, which have helped millions of people across the world to send and receive money quickly and conveniently.

Esewa Money Transfer offers a blended model of world-class remittance services to Nepalis around the world. 

Published in The Rising Nepal daily on 30 June 2023.

Lacroix calls on PM

Kathmandu, June 28

United Nations Under-Secretary-General for Department of Peace Operations, Jean-Pierre Lacroix paid a courtesy call to Prime Minister Pushpa Kamal Dahal 'Prachanda' on Wednesday.

The meeting focused on Nepal-UN partnership, including Nepal's contribution to UN peacekeeping, the Prime Minister's Office tweeted.

Earlier, on Tuesday, Lacroix called on Deputy Prime Minister and Minister for Defense, Purna Bahadur Khadka where the latter expressed Nepal's commitment to UN peacekeeping operations and said that the country could send up to 10,000 peacekeepers when needed.

Likewise, the Under Secretary-General appreciated Nepal's role in international peacekeeping missions.

Under Secretary-General, Lacroix is in Nepal on a four-day official visit. He was received by the officials of the Ministry of Foreign Affairs and Nepali Army at the Tribhuvan International Airport on Tuesday.

Published in The Rising Nepal daily on 29 June 2023.

MoU signed with Mongolia to share experience on Pashmina production, trade

Kathmandu, June 28

Nepali Pashmina entrepreneurs and Mongolian officials have reached an understanding to collaborate for quality testing and analysis of wool fibres and for exchanging knowledge and research works in this sector.

A Memorandum of Understanding (MoU) was signed between the Nepal Pashmina Industries Association (NPIA) and the Research and Development Institute of Light Industry (RDILI) of the Mongolian government in Ulaanbaatar on Wednesday.

Vijoy Dugar, the president of the NPIA, and Turmunkh Togmid, the Director of the RDILI, signed the MoU on behalf of the respective agencies.

The MoU was inked in the presence of Madhu Kumar Marasini, Secretary at the Ministry of Industry, Commerce and Supplies, and Jambaltseren Tumur-Uya, State Secretary of the Ministry of Food, Agriculture and Light Industry of Mongolia.

As per the MoU, Nepali pashmina entrepreneurs will get samples of Pashmina fibre, semi-processed wools, and woollen products tested and analysed by RDILI in Mongolia, the NPIA informed in a statement on Wednesday.

Similarly, both parties also agreed to share experiences, knowledge, and research works with each other in the coming days. The five-year term MoU took effect from the day of the signing subject to extension upon mutual understanding between both parties.

The MoU was signed on the sideline of the World Export Development Forum (WEDF) 2023 organised by the International Trade Centre in Ulaanbaatar, Mongolia, which was also attended by a Nepali delegation including senior government officials and private sector representatives.

The event offered diverse sessions aimed at discussing a wide range of issues pertaining to the export promotion of least-developed countries.

The EU-funded Trade and Investment supported the participation of Nepali pashmina entrepreneurs at the four-day event that kicked off on Monday. The NPIA was among the 130 companies which participated in the B2B meetings during the WEDF in Mongolia.

“The MoU is a significant step towards securing benefits from Mongolia's experience in woollen and Cashmere production and export and exchanges of various research and innovation in this field,” said Secretary Marasini at the MoU signing programme, read the statement.

Likewise, Jambaltseren Tumur-Uya, Director of RDILI, said, “The MoU has paved the way for Mongolia’s support on quality testing and analysis of Nepali Cashmere products from Nepal, expansion of business relations between the two countries and, exchange of knowledge and research works in this field.”

NPIA President Dugar, said that the MoU provided an opportunity for Nepali Pashmina entrepreneurs to take benefits from the long experience and expertise of Mongolia which is a leading producer and exporter of Cashmere and woollen products.

Published in The Rising Nepal daily on 29 June 2023.