Due to increasing trend of robbing government coffer by ‘some business people’, the honest entrepreneurs feel ashamed as common people put them all in a basket and create negative perception of the private sector.
Post-1990 movement, the private sector has come forward very actively and in many sectors led alone, without government’s support, but post-2007 movement, the private sector has been in news more all for the wrong reasons. “It’s a trend,” according to finance secretary Krishnahari Baskota, “though such act will not benefit them in a long run.”
The revenue administration has brought some 1,700 more firms under its radar, without completion of its 518 firms’ investigation that according to it, will add some Rs 5 billion to government coffer, though, initial projection was double.
Government needs sustainable funding for social programmes and public investments to promote economic growth and development. Programmes providing health, education, infrastructure and other amenities are important to achieve a common goal of a prosperous, functional and orderly society. Those programmes require governments to raise revenue but the recent trend has hit the government coffer hard making it unable to even achieve its target.
The private sector plays an essential role in contributing to economic growth and prosperity as the companies contribute to socio-economic development by employing workers, improving the skills and knowledge base, buying from local suppliers and providing products and services that improve people’s lives and revenues through generating and paying taxes.
But the recent investigation of the revenue administration has revealed a huge revenue leakages by the private sector.
“Apart from trend, legal system, bureaucracy and lack of regular policy review also fuelled the leakages,” Baskota said, adding that the Finance Ministry is on a regular basis watching and improving the legal system, apart from strengthening bureaucracy. “The policy reform is also under consideration.”
But Nepal ranks in the 111st position among the 183 economies in Paying Taxes 2012 report of the World Bank. The Paying Taxes indicators being included in Doing Business report of the World Bank Group measures the ease of paying taxes for a small to medium-sized domestic company, in all of the 183 economies that it covers. The study measures three aspects of the tax system for business – one relating to the tax cost or the total tax rate and two to the compliance burden, the time spent on tax compliance and the number of tax payments.
In the tax cost indicator, Nepal ranks 49th, whereas in time spent on tax compliance it ranks 138th and in number of tax payments 120th position giving an indication where the government needs to focus.
The administrative burden and cost of complying with taxes is important from the business perspective, as well as the rate of tax paid. “One of the causes of low compliance may be due to more time taken to pay tax,” the finance secretary said, “But to make it easier, the Finance Ministry has upgraded itself to e-filing and one can file tax from the office or home without spending much time.”
The purpose of the Paying Taxes study is to provide data to inform discussion around tax policy, tax administration, and to encourage dialogue on reform. It shows that different administrative practices used by government play a key role in lowering or increasing the compliance burden and easing compliance burden to make tax collection more efficient.
According to the study, the less time business spends on tax compliance the more time it has to focus on building the business and contributing to economic growth.
However, the government can do much to reduce burden on business by simplifying the process making it less man-to-man contact that could help plug increasing leakages.
Thursday, January 19, 2012
Are you ready to donate one day salary for country !
Finance Ministry is planning to create a fund from one day salary of employees to invest in national development.
"We are planning to make an appeal to donate employees one day salary voluntarily — from the President to all the employees — to create a fund," said Finance Minister Barsha Man Pun without elaborating the idea that either the government employee will be asked to donate or the employees from the private sector will also be asked to donate their one day salary.
Since the idea is only under consideration, I cannot elaborate on it, he told the reporters in his office at Singh Durbar today.
"But the President to Prime Minister and ministers will contribute to the fund," said Pun, refusing gently to explain on where the fund will be invested, what will be its mechanism and who will look after it.
However, according to a Finance Ministry source, the minister may be trying to involve all the citizen in the development process of the country. But he also failed to explain why anyone should donate one day salary though, voluntarily, without knowing the effective mechanism of the fund's use.
The finance minister also said that the ministry after the mid-term evaluation, that it is preparing, will issue a remaining half year's plans and programmes for the effective implementation of the budget to achieve the government target. "By the six month end, the government has been able to spend one-third of the capital budget, which is not satisfactory as it is not enough to propel the growth," he said, adding that the government is focusing on growth with employment.
The Finance Ministry is serious on large projects of over Rs 150 million like Ranijamara, Babai and Sikta irrigation projects, he said, adding that he personally is monitoring such 70 projects as according to the budget the finance minister is designated to look after the projects of over Rs 150 million.
"We are planning to make an appeal to donate employees one day salary voluntarily — from the President to all the employees — to create a fund," said Finance Minister Barsha Man Pun without elaborating the idea that either the government employee will be asked to donate or the employees from the private sector will also be asked to donate their one day salary.
Since the idea is only under consideration, I cannot elaborate on it, he told the reporters in his office at Singh Durbar today.
"But the President to Prime Minister and ministers will contribute to the fund," said Pun, refusing gently to explain on where the fund will be invested, what will be its mechanism and who will look after it.
However, according to a Finance Ministry source, the minister may be trying to involve all the citizen in the development process of the country. But he also failed to explain why anyone should donate one day salary though, voluntarily, without knowing the effective mechanism of the fund's use.
The finance minister also said that the ministry after the mid-term evaluation, that it is preparing, will issue a remaining half year's plans and programmes for the effective implementation of the budget to achieve the government target. "By the six month end, the government has been able to spend one-third of the capital budget, which is not satisfactory as it is not enough to propel the growth," he said, adding that the government is focusing on growth with employment.
The Finance Ministry is serious on large projects of over Rs 150 million like Ranijamara, Babai and Sikta irrigation projects, he said, adding that he personally is monitoring such 70 projects as according to the budget the finance minister is designated to look after the projects of over Rs 150 million.
ADBL to give bonus from next year
Agriculture Development Bank Ltd (ADBL) is planning to distribute bonus to shareholders from the next fiscal year.
The bank, after restructuring its negative net worth, will distribute bonus from next year, said chief executive officer Tej Bahadur Budhathoki in a press meet here today.
"Ministry of Finance has given consent to transfer Rs 3.86 billion from reserve fund and it will cover our loss," he said, adding that it will help ADBL to distribute bonus. The ministry has given the money to cover the cost of loans exemption to small farmer three years ago.
The bank has 228,174 shareholders at present. It has about Rs 37.21 billion deposits from 673,084 depositors spreading across the country, according to the bank that has increased its authorised capital to Rs 13 billion and paid up capital to Rs 9.47 billion, including proposed preferential share worth Rs 6.43 billion.
ADBL has floated loans worth Rs 340.83 billion in the last 45 years and was repaid Rs 300.45 billion. "We still have Rs 40.38 loans to 167,299 people," he said.The bank has diversified its investment from agriculture to businesses and industries in recent years to sustain in the competitive market. However, it is still giving priority to agriculture, Budhathoki said, adding that its 12 per cent to 15 per cent investment is still in agriculture sector.
ADBL is also restructuring its management along with other changes to tap large share in financial market. It has also upgraded its major branches – main office, corporate office, Thamel, Gaushala and Bode branches and Kathmandu regional office – to computerised system, apart from introducing new services like letter of credit (LC) and remittance service under brand name 'ADBL Remit.'
"We are also inviting strategic partner in next two years," he said, adding that a committee has been formed and that will prepare technical report in a next couple of months. "Its longtime partner Asian Development Bank (ADB) is providing technical support to the bank," according to the chief executive.
Meanwhile, ADBL has signed an agreement worth Rs 1 billion under Youth and Small Entrepreneur Self-reliant Fund (YSESF) and will mobilise it to youth seeking self-reliant from March. "ADBL is lending to individual, groups and organisations on the basis of viability of project," he added.
The bank, after restructuring its negative net worth, will distribute bonus from next year, said chief executive officer Tej Bahadur Budhathoki in a press meet here today.
"Ministry of Finance has given consent to transfer Rs 3.86 billion from reserve fund and it will cover our loss," he said, adding that it will help ADBL to distribute bonus. The ministry has given the money to cover the cost of loans exemption to small farmer three years ago.
The bank has 228,174 shareholders at present. It has about Rs 37.21 billion deposits from 673,084 depositors spreading across the country, according to the bank that has increased its authorised capital to Rs 13 billion and paid up capital to Rs 9.47 billion, including proposed preferential share worth Rs 6.43 billion.
ADBL has floated loans worth Rs 340.83 billion in the last 45 years and was repaid Rs 300.45 billion. "We still have Rs 40.38 loans to 167,299 people," he said.The bank has diversified its investment from agriculture to businesses and industries in recent years to sustain in the competitive market. However, it is still giving priority to agriculture, Budhathoki said, adding that its 12 per cent to 15 per cent investment is still in agriculture sector.
ADBL is also restructuring its management along with other changes to tap large share in financial market. It has also upgraded its major branches – main office, corporate office, Thamel, Gaushala and Bode branches and Kathmandu regional office – to computerised system, apart from introducing new services like letter of credit (LC) and remittance service under brand name 'ADBL Remit.'
"We are also inviting strategic partner in next two years," he said, adding that a committee has been formed and that will prepare technical report in a next couple of months. "Its longtime partner Asian Development Bank (ADB) is providing technical support to the bank," according to the chief executive.
Meanwhile, ADBL has signed an agreement worth Rs 1 billion under Youth and Small Entrepreneur Self-reliant Fund (YSESF) and will mobilise it to youth seeking self-reliant from March. "ADBL is lending to individual, groups and organisations on the basis of viability of project," he added.
Wednesday, January 18, 2012
Plan to attract Rs 500 billion worth investments
The government is planning to attract some Rs 500 billion worth investments under the ambitious Nepal Investment Year 2012-13 campaign.
"We are preparing a detail study of 50 mega projects," Investment Board chief executive Radhesh Pant, said here today.
The Board — that looks after only mega projects of above Rs 10 billion — has been actively working out on policy reforms and harmonisation, and preparing at least 50 project profiles that will bring some Rs 500 billion in the country that has been witnessing a sluggish growth since last three fiscal years. "The foreign investments will help propel economic growth," he added. "The country needs Rs 600 billion to achieve double digit growth."
"Large scale investment is crucial for economic growth," said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Suraj Vaidya. "For growth of about eight per cent, we need 40 per cent of the gross domestic production (GDP) to go in the investment but our savings rate is very low," he said, reasoning for the foreign investment.
Despite various challenges, Nepal Investment Year will be a turning point to mobilise investment — both local and foreign — for the eonomic development, Vaidya said. "The campaign will help bring business and economy into the forefront and help initiate in garnering broad consensus on investment related policies and issues."
Nepal Investment Year will show the international investors that Nepal has investment-friendly environment and also identify its strong points as a potential investment destination.
The umbrella organisation of the private sector claims that it will also help identify the potential investors and network with them, apart from help Nepali investors connect with foreign investors.
As the global competition for investment is becoming more rigorous, the international investors seek incentives, Vaidya said, adding various countries have declared special incentives to lure foreign Direct Investment (FDI) as investors are choosy and capital is mobile.
The FNCCI will help the board work for the improvement in the investment climate, though the investment climate has improved in recent years, he added.
However, the political ownership is a major challenge, according to private sector. The Board might help create political consensus among the political parties to minimise the risk, as frequent changes in governments and of governments lead to policy instability and due to lack of ownership of the national campaign, the plans, promotion and marketing of the country might get hit.
The FNCCI has planned mega show — international investment conference — in 2013, investment portal as FDI information centre and hopeful of agreement of at least 10 mega projects within the event period, to support the national campaign that has envisioned to double the investment size, become one stop service to investors, increase domestic investment and FDI, bi-lateral, and multilateral aid in infrastructure sector like energy, road, irrigation and social service sector.
The Board has also formed Investment Promotion sub-committee led by Vaidya; Investment Project Identification sub-committee led by Pant; Act, Rules and Policies Revision sub-committee led by National Planning Commission vice chair Deependra Bahadur Kshetri to make the Nepal Investment Year a great success.
FNCCI priority sectors
•Water and water related projects
•Agriculture and Agri processing
•Infrastructure
•Tourism
•Services
•Mine and Minerals based Industry
"We are preparing a detail study of 50 mega projects," Investment Board chief executive Radhesh Pant, said here today.
The Board — that looks after only mega projects of above Rs 10 billion — has been actively working out on policy reforms and harmonisation, and preparing at least 50 project profiles that will bring some Rs 500 billion in the country that has been witnessing a sluggish growth since last three fiscal years. "The foreign investments will help propel economic growth," he added. "The country needs Rs 600 billion to achieve double digit growth."
"Large scale investment is crucial for economic growth," said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Suraj Vaidya. "For growth of about eight per cent, we need 40 per cent of the gross domestic production (GDP) to go in the investment but our savings rate is very low," he said, reasoning for the foreign investment.
Despite various challenges, Nepal Investment Year will be a turning point to mobilise investment — both local and foreign — for the eonomic development, Vaidya said. "The campaign will help bring business and economy into the forefront and help initiate in garnering broad consensus on investment related policies and issues."
Nepal Investment Year will show the international investors that Nepal has investment-friendly environment and also identify its strong points as a potential investment destination.
The umbrella organisation of the private sector claims that it will also help identify the potential investors and network with them, apart from help Nepali investors connect with foreign investors.
As the global competition for investment is becoming more rigorous, the international investors seek incentives, Vaidya said, adding various countries have declared special incentives to lure foreign Direct Investment (FDI) as investors are choosy and capital is mobile.
The FNCCI will help the board work for the improvement in the investment climate, though the investment climate has improved in recent years, he added.
However, the political ownership is a major challenge, according to private sector. The Board might help create political consensus among the political parties to minimise the risk, as frequent changes in governments and of governments lead to policy instability and due to lack of ownership of the national campaign, the plans, promotion and marketing of the country might get hit.
The FNCCI has planned mega show — international investment conference — in 2013, investment portal as FDI information centre and hopeful of agreement of at least 10 mega projects within the event period, to support the national campaign that has envisioned to double the investment size, become one stop service to investors, increase domestic investment and FDI, bi-lateral, and multilateral aid in infrastructure sector like energy, road, irrigation and social service sector.
The Board has also formed Investment Promotion sub-committee led by Vaidya; Investment Project Identification sub-committee led by Pant; Act, Rules and Policies Revision sub-committee led by National Planning Commission vice chair Deependra Bahadur Kshetri to make the Nepal Investment Year a great success.
FNCCI priority sectors
•Water and water related projects
•Agriculture and Agri processing
•Infrastructure
•Tourism
•Services
•Mine and Minerals based Industry
World Bank projects 3.6 per cent growth
The economy will expand by 3.6 per cent in the current fiscal year, says the World Bank in the newly-released Global Economic Prospects 2012.
Though, the government has projected a growth rate of five per cent for the current fiscasl year, the report has reduced the growth forecast due to slower growth in the whole South Asian region.
In the last fiscal year, the country had witnessed a growth of 3.5 per cent.
"Following a vibrant 9.1 per cent growth rate in 2010, real GDP growth in South Asia decelerated to an estimated 6.6 per cent in 2011, with a sharp fall-off evident in industrial production and trade late in the year," it said.
"Nevertheless, regional growth is estimated to have exceeded the long-term average of six per cent (1998-2007), reflecting above trend activity in Bangladesh, India and Sri Lanka. The GDP growth is projected to ease further to 5.8 per cent in 2012 before strengthening to 7.1 per cent in 2013.
Accounting for about 80 per cent of South Asia’s GDP, India has led the regional slowdown as its GDP growth weakened to an estimated 6.8 per cent — at factor cost — in the fiscal year 2011-12, ending in March 2012, from 8.5 per cent in 2010-11. But the growth is projected to hold steady at 6.8 in 2012-13 before accelerating to 8.5 per cent in 2013-14 reflecting moderation in domestic demand, given a deceleration in investment growth that has faced headwinds of rising borrowing costs, high input prices, slowing global growth and heightened uncertainty.
Worker remittances remain a critical source of foreign exchange in South Asia — equivalent to 20 per cent of GDP — as of 2010 — in Nepal, 9.6 per cent in Bangladesh, seven per cent in Sri Lanka and five per cent in Pakistan." If the global conditions were to deteriorate sharply, remittances growth could stall, resulting in weaker incomes, weaker foreign currency earnings and slower domestic demand growth within the region," the World Bank warned.
Financial sector impacts through heightened global risk aversion — reversal of capital inflows, higher international borrowing costs and slowing FDI — are also projected to be felt strongest in India, which is the most integrated with global financial markets, along with the Maldives and Sri Lanka, where 2012 external financing needs — current account financing and external debt repayments — are estimated to reach 9.8 per cent, 18 per cent and seven per cent of GDP, respectively.
"Countries heavily reliant on foreign assistance, like Afghanistan, Nepal and Pakistan, could be hit hard, if fiscal consolidation in high income countries were to result in cuts to overseas development assistance," it added.
Similarly, lack of fiscal space in South Asia, inflationary pressures and consequent limited room for monetary policy easing, fiscal consolidation through greater revenue mobilisation — particularly in Pakistan, Sri Lanka, Bangladesh, and Nepal — and expenditure rationalisation — especially in India — could play a key role in helping to protect critical social programmes.
But it concludes that South Asian countries have the opportunity to re-think and pursue new sources of growth in both domestic and external markets.
However, developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, it cautioned, lowering its growth forecast for 2012 to 5.4 per cent for developing countries and 1.4 per cent for high-income countries (-0.3 per cent for the Euro Area), down from its June estimates of 6.2 per cent and 2.7 per cent (1.8 per cent for the Euro Area), respectively. Global growth is now projected at 2.5 per cent and 3.1 per cent for 2012 and 2013, respectively.
Meanwhile, the global economy is now expected to expand 2.5 and 3.1 per cent in 2012 and 2013 (3.4 and four per cent when calculated using purchasing power parity weights), versus the 3.6 per cent projected in June for both years. High-income country growth is now expected to come in at 1.4 per cent in 2012 (-0.3 percent for Euro Area countries, and 2.1 per cent for the remainder) and 2.0 percent in 2013, versus June forecasts of 2.7 and 2.6 per cent for 2012 and 2013 respectively.
Developing country growth has been revised down to 5.4 and six per cent versus 6.2 and 6.3 per cent in the June projections. Reflecting the growth slowdown, world trade, which expanded by an estimated 6.6 per cent in 2011, will grow only 4.7 per cent in 2012, before strengthening to 6.8 per cent in 2013.
The growth
2010-11 — 3.5 per cent
2011-12 — 3.6 per cent
2012-13 — 4.0 per cent
(Source: World Bank, Global Economic Prospect 2012)
Though, the government has projected a growth rate of five per cent for the current fiscasl year, the report has reduced the growth forecast due to slower growth in the whole South Asian region.
In the last fiscal year, the country had witnessed a growth of 3.5 per cent.
"Following a vibrant 9.1 per cent growth rate in 2010, real GDP growth in South Asia decelerated to an estimated 6.6 per cent in 2011, with a sharp fall-off evident in industrial production and trade late in the year," it said.
"Nevertheless, regional growth is estimated to have exceeded the long-term average of six per cent (1998-2007), reflecting above trend activity in Bangladesh, India and Sri Lanka. The GDP growth is projected to ease further to 5.8 per cent in 2012 before strengthening to 7.1 per cent in 2013.
Accounting for about 80 per cent of South Asia’s GDP, India has led the regional slowdown as its GDP growth weakened to an estimated 6.8 per cent — at factor cost — in the fiscal year 2011-12, ending in March 2012, from 8.5 per cent in 2010-11. But the growth is projected to hold steady at 6.8 in 2012-13 before accelerating to 8.5 per cent in 2013-14 reflecting moderation in domestic demand, given a deceleration in investment growth that has faced headwinds of rising borrowing costs, high input prices, slowing global growth and heightened uncertainty.
Worker remittances remain a critical source of foreign exchange in South Asia — equivalent to 20 per cent of GDP — as of 2010 — in Nepal, 9.6 per cent in Bangladesh, seven per cent in Sri Lanka and five per cent in Pakistan." If the global conditions were to deteriorate sharply, remittances growth could stall, resulting in weaker incomes, weaker foreign currency earnings and slower domestic demand growth within the region," the World Bank warned.
Financial sector impacts through heightened global risk aversion — reversal of capital inflows, higher international borrowing costs and slowing FDI — are also projected to be felt strongest in India, which is the most integrated with global financial markets, along with the Maldives and Sri Lanka, where 2012 external financing needs — current account financing and external debt repayments — are estimated to reach 9.8 per cent, 18 per cent and seven per cent of GDP, respectively.
"Countries heavily reliant on foreign assistance, like Afghanistan, Nepal and Pakistan, could be hit hard, if fiscal consolidation in high income countries were to result in cuts to overseas development assistance," it added.
Similarly, lack of fiscal space in South Asia, inflationary pressures and consequent limited room for monetary policy easing, fiscal consolidation through greater revenue mobilisation — particularly in Pakistan, Sri Lanka, Bangladesh, and Nepal — and expenditure rationalisation — especially in India — could play a key role in helping to protect critical social programmes.
But it concludes that South Asian countries have the opportunity to re-think and pursue new sources of growth in both domestic and external markets.
However, developing countries should prepare for further downside risks, as Euro Area debt problems and weakening growth in several big emerging economies are dimming global growth prospects, it cautioned, lowering its growth forecast for 2012 to 5.4 per cent for developing countries and 1.4 per cent for high-income countries (-0.3 per cent for the Euro Area), down from its June estimates of 6.2 per cent and 2.7 per cent (1.8 per cent for the Euro Area), respectively. Global growth is now projected at 2.5 per cent and 3.1 per cent for 2012 and 2013, respectively.
Meanwhile, the global economy is now expected to expand 2.5 and 3.1 per cent in 2012 and 2013 (3.4 and four per cent when calculated using purchasing power parity weights), versus the 3.6 per cent projected in June for both years. High-income country growth is now expected to come in at 1.4 per cent in 2012 (-0.3 percent for Euro Area countries, and 2.1 per cent for the remainder) and 2.0 percent in 2013, versus June forecasts of 2.7 and 2.6 per cent for 2012 and 2013 respectively.
Developing country growth has been revised down to 5.4 and six per cent versus 6.2 and 6.3 per cent in the June projections. Reflecting the growth slowdown, world trade, which expanded by an estimated 6.6 per cent in 2011, will grow only 4.7 per cent in 2012, before strengthening to 6.8 per cent in 2013.
The growth
2010-11 — 3.5 per cent
2011-12 — 3.6 per cent
2012-13 — 4.0 per cent
(Source: World Bank, Global Economic Prospect 2012)
Nepal to fast track Karnali, Arun projects: Jha
Nepal has assured India of quick resolution of issues pertaining to Indian investment in Nepal.
Industry minister Anil Jha in his meeting withminister of commerce industry and textiles Anand Sharma in New Delhi, today, singled out Karnali and Arun power projects for fast-track clearances. Sharma said that “the move on the part of Nepal will send a very positive signal for deepening of economic relations and boosting investor confidence.”
Indian firms are the biggest investors in Nepal accounting for about 47.5 per cent of total approved foreign direct investments (FDIs). There are about 150 operating Indian ventures in Nepal engaged in manufacturing, services — banking, insurance, dry port, education and telecom — power sector and tourism industries. Indian joint ventures in Nepal have contributed significantly to increase in Nepal’s exports to India.
They also provide direct employment to around 30,000 Nepalis and indirect employment to more than twice that number. According to the current Indian FDI policy there is no restriction for inflows of FDI from Nepal. Both the governments have also signed the text of bilateral investment protection and promotion agreement (BIPPA).
Sharma assured Jha of continued special relationship with Nepal.Jha asked the Sharma for better concessions for the jute products from Nepal. He also made a strong pitch for further concessions for Nepal imports and more investments from India.
The bilateral trade between the two countries has increased from $1,985 million in 2009-10 to around $2,700 in 2010-11 registering an increase of around 36 per cent.
Exports from Nepal to India have also grown from $452 million in 2009-10 to $476 millionin 2010-11, an increment of around 5.3 per cent. “Our growing mutual cooperation in the development of the hydropower potential of Nepal confirms the special relationship between our two countries,” Sharma said, adding that India would like to accelerate such cooperation which would usher in a new era of prosperity for Nepal.
It is estimated that sale of electricity from the 40,000 MW hydropower potential of Nepal can generate revenues of more than $10 billion per annum.
Nepal could also attract a lot of investment in manufacturing/services sector by overcoming its present power shortage.
Industry minister Anil Jha in his meeting withminister of commerce industry and textiles Anand Sharma in New Delhi, today, singled out Karnali and Arun power projects for fast-track clearances. Sharma said that “the move on the part of Nepal will send a very positive signal for deepening of economic relations and boosting investor confidence.”
Indian firms are the biggest investors in Nepal accounting for about 47.5 per cent of total approved foreign direct investments (FDIs). There are about 150 operating Indian ventures in Nepal engaged in manufacturing, services — banking, insurance, dry port, education and telecom — power sector and tourism industries. Indian joint ventures in Nepal have contributed significantly to increase in Nepal’s exports to India.
They also provide direct employment to around 30,000 Nepalis and indirect employment to more than twice that number. According to the current Indian FDI policy there is no restriction for inflows of FDI from Nepal. Both the governments have also signed the text of bilateral investment protection and promotion agreement (BIPPA).
Sharma assured Jha of continued special relationship with Nepal.Jha asked the Sharma for better concessions for the jute products from Nepal. He also made a strong pitch for further concessions for Nepal imports and more investments from India.
The bilateral trade between the two countries has increased from $1,985 million in 2009-10 to around $2,700 in 2010-11 registering an increase of around 36 per cent.
Exports from Nepal to India have also grown from $452 million in 2009-10 to $476 millionin 2010-11, an increment of around 5.3 per cent. “Our growing mutual cooperation in the development of the hydropower potential of Nepal confirms the special relationship between our two countries,” Sharma said, adding that India would like to accelerate such cooperation which would usher in a new era of prosperity for Nepal.
It is estimated that sale of electricity from the 40,000 MW hydropower potential of Nepal can generate revenues of more than $10 billion per annum.
Nepal could also attract a lot of investment in manufacturing/services sector by overcoming its present power shortage.
Nepal to open five service sectors
Nepal has selected its five service sectors to open for the SAARC member countries.
"Among the service sectors within Nepal Trade Integration Strategy (NTIS), Nepal has opened Trade, Tourism, Information Technology (IT), Health and Education for the SAARC member countries to invest in Nepal,” said joint secretary at the Ministry of Commerce and Supplies Toya Narayan Gyawali, after the Eighth meeting of Expert Group on SAARC Agreement on Trade Service that concluded in Kathmandu.
Nepal Trade Integration Strategy 2010 has identified 19 products and services having maximum export potentials.Seven agro-based products — large cardamom, ginger, honey, lentils, tea, noodles, medicinal and essential oils — five industrial products — handmade paper, silver jewellery, iron and steel, pashmina, and wool products — and seven service sectors — tourism, labour, health, education, IT and BPO, engineering and hydro-electricity have been featured in the NTIS list for the promotion of these sectors as they have export potential.
"Service sector is more complicated than the trading sector therefore we are holding direct discussions with the stakeholders to make it be easier for negotiations," Gyawali, said, adding that Nepal is going to participate in the Trading Service Expert meeting — after the two-day meeting in Kathmandu that concluded today — that is scheduled for February 13 in Pakistan.
"We will have a series of meetings on different sector and trading services which will be followed by the SAARC ministerial meeting in Pakistan,” he said.
Nepal has already agreed to open up 70 sub-sectors of services for other member countries under WTO rules and the meeting might decide on additional sub-sectors of service for foreign investors.
The South Asian regional block’s member states have already made their initial offer to open over 170 sub-sectors of service for foreign investments under the WTO norms. The 16th SAARC summit in Bhutan in 2010 had decided to introduce service sector in the SAFTA, which would incorporate only goods for regional preferential trade.
Joint secretary Gyawali and undersecretary Binod Acharya from Ministry of Commerce and Supplies participated in the eight meeting of Expert Group on SAARC Agreement on Trade Service in Kathmandu.
"Among the service sectors within Nepal Trade Integration Strategy (NTIS), Nepal has opened Trade, Tourism, Information Technology (IT), Health and Education for the SAARC member countries to invest in Nepal,” said joint secretary at the Ministry of Commerce and Supplies Toya Narayan Gyawali, after the Eighth meeting of Expert Group on SAARC Agreement on Trade Service that concluded in Kathmandu.
Nepal Trade Integration Strategy 2010 has identified 19 products and services having maximum export potentials.Seven agro-based products — large cardamom, ginger, honey, lentils, tea, noodles, medicinal and essential oils — five industrial products — handmade paper, silver jewellery, iron and steel, pashmina, and wool products — and seven service sectors — tourism, labour, health, education, IT and BPO, engineering and hydro-electricity have been featured in the NTIS list for the promotion of these sectors as they have export potential.
"Service sector is more complicated than the trading sector therefore we are holding direct discussions with the stakeholders to make it be easier for negotiations," Gyawali, said, adding that Nepal is going to participate in the Trading Service Expert meeting — after the two-day meeting in Kathmandu that concluded today — that is scheduled for February 13 in Pakistan.
"We will have a series of meetings on different sector and trading services which will be followed by the SAARC ministerial meeting in Pakistan,” he said.
Nepal has already agreed to open up 70 sub-sectors of services for other member countries under WTO rules and the meeting might decide on additional sub-sectors of service for foreign investors.
The South Asian regional block’s member states have already made their initial offer to open over 170 sub-sectors of service for foreign investments under the WTO norms. The 16th SAARC summit in Bhutan in 2010 had decided to introduce service sector in the SAFTA, which would incorporate only goods for regional preferential trade.
Joint secretary Gyawali and undersecretary Binod Acharya from Ministry of Commerce and Supplies participated in the eight meeting of Expert Group on SAARC Agreement on Trade Service in Kathmandu.
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