The government has bifurcated the Labour Department into two different units -- Department of Foreign Employment and Labour Department.
The former Labour Department used to look after all issues related to labourers, domestic and migrants. "In order to look after the increasing migrant labour force and its problems, the government has divided the department into two," said Lekh Raj Bhatta, Minister for Labour and Transport Management, while inaugurating the newly-formed Department of Foreign Employment here today.
Due to lack of job opportunities at home in the wake of the decade-long armed conflict, the younger generation Nepalis are forced to go abroad in search of greener pastures. "Their contribution to the economy cannot be ignored," Bhatta said adding that their contribution to the GDP is at 17.4 per cent.
According to the official record, 1,20,4,937 Nepali migrant workers are in various countries all over the world. The remittance sent by them is keeping the economy afloat. "The remittance should be used in productive sectors," Bhatta suggested adding that at present, the remittance sent by them is invested in land and houses. "These are are unproductive sectors," he opined.
"Manpower agencies should be labelled a respectable profession," the former rebel said and added, "Nepali migrant workers are not getting paid according to standards set by the employer countries due to various reasons. This should be rectified." He added that the government was serious about labour problems -- migrant and back home both -- and the separation of the department showed the government's commitment."The formation of separate departments would make handling the migrant labourers' and domestic labourers' issues easier," said Mohan Krishna Sapkota, director general of the department.
The government received Rs 1,42,680 million remittance - that is 25 per cent of the GNP - in the fiscal year 2007-08, Sapkota said. "In view of the importance of the migrant workforce, the sector new department has been formed according to the Foreign Labour Act 2064," he added.
Wednesday, December 31, 2008
Revenue mobilisation up by 35 per cent
The government's constant efforts to meet the revenue target spelled out in the budget are paying off.
According to Nepal Rastra Bank's (NRB) first four months' microeconomic indicators, revenue mobilisation grew by 35.4 per cent to reach Rs 33 billion compared to an increase of only 13.2 per cent in the same period the last fiscal year. Such an impressive revenue mobilisation was ascribed to the high growth of income tax, VAT collection, customs, excise, vehicle tax and registration fee as well as high growth of non-tax revenue.
Reforms in customs, excise administration and imports are the reason behind the increase. Of the total revenue mobilisation, VAT revenue grew by 31.2 per cent to Rs 12 billion in mid-November 2008. It is more than double as it had increased by 13.4 per cent in the same period last fiscal year.
"In the review period, customs revenue rose by 22.7 per cent to reach Rs 7.2 billion compared to an increase of 9.4 per cent in the same period last year," said the central bank's report of first four months of this fiscal year.Excise revenue also increased by 32.4 per cent to reach Rs 4.2 billion compared to an increase of 32.3 per cent in the same period of the previous year.
Income tax revenue increased by 25.9 per cent to reach Rs 3.7 billion in the review period. "The evolution of corporate culture on account of growth in banks and financial institutions has contributed to so much income tax collection," it said.
Non-tax revenue grew by 73.9 per cent to reach Rs 3.4 billion due to increase in dividends paid by some public enterprises including Nepal Telecom.
Dataspeak
KATHMANDU: In the first four months of this fiscal year, the micro-economic indicators look encouraging except that the consumer price index rose to 14.5 per cent.
* Exports soared by 39.9 per cent.
* Exports to India went up by 24.4 per cent.
* Exports to other countries rose by 70.8 per cent.
* Total imports rose by 38.9 per cent.
* Imports from India went up by 22.1 per cent.
* Imports from other countries grew by 65.3 per cent.
* Overall Balance of Payment recorded a surplus of Rs 11.86 billion.
* The current account also posted a surplus of Rs 9.52 billion.
* Workers' remittances soared by 65.9 per cent.
* Gross foreign exchange reserves stood at Rs 231.34 billion.
* On the basis of the US dollar, gross forex reserves declined by 5.3 per cent to $2.94 billion.
* The current level of reserves is adequate for financing merchandise imports till 9.9 months, and merchandise and service imports till eight months.
* NRB purchased Indian currency (IC) worth 22.53 billion through the sale of $490 million.
* The government budget remained at a surplus of Rs 1.3 billion.
According to Nepal Rastra Bank's (NRB) first four months' microeconomic indicators, revenue mobilisation grew by 35.4 per cent to reach Rs 33 billion compared to an increase of only 13.2 per cent in the same period the last fiscal year. Such an impressive revenue mobilisation was ascribed to the high growth of income tax, VAT collection, customs, excise, vehicle tax and registration fee as well as high growth of non-tax revenue.
Reforms in customs, excise administration and imports are the reason behind the increase. Of the total revenue mobilisation, VAT revenue grew by 31.2 per cent to Rs 12 billion in mid-November 2008. It is more than double as it had increased by 13.4 per cent in the same period last fiscal year.
"In the review period, customs revenue rose by 22.7 per cent to reach Rs 7.2 billion compared to an increase of 9.4 per cent in the same period last year," said the central bank's report of first four months of this fiscal year.Excise revenue also increased by 32.4 per cent to reach Rs 4.2 billion compared to an increase of 32.3 per cent in the same period of the previous year.
Income tax revenue increased by 25.9 per cent to reach Rs 3.7 billion in the review period. "The evolution of corporate culture on account of growth in banks and financial institutions has contributed to so much income tax collection," it said.
Non-tax revenue grew by 73.9 per cent to reach Rs 3.4 billion due to increase in dividends paid by some public enterprises including Nepal Telecom.
Dataspeak
KATHMANDU: In the first four months of this fiscal year, the micro-economic indicators look encouraging except that the consumer price index rose to 14.5 per cent.
* Exports soared by 39.9 per cent.
* Exports to India went up by 24.4 per cent.
* Exports to other countries rose by 70.8 per cent.
* Total imports rose by 38.9 per cent.
* Imports from India went up by 22.1 per cent.
* Imports from other countries grew by 65.3 per cent.
* Overall Balance of Payment recorded a surplus of Rs 11.86 billion.
* The current account also posted a surplus of Rs 9.52 billion.
* Workers' remittances soared by 65.9 per cent.
* Gross foreign exchange reserves stood at Rs 231.34 billion.
* On the basis of the US dollar, gross forex reserves declined by 5.3 per cent to $2.94 billion.
* The current level of reserves is adequate for financing merchandise imports till 9.9 months, and merchandise and service imports till eight months.
* NRB purchased Indian currency (IC) worth 22.53 billion through the sale of $490 million.
* The government budget remained at a surplus of Rs 1.3 billion.
Tuesday, December 30, 2008
The year 2008: Lost opportunity and demised economic revolution
At the start of 2008, except for fuel prices everything looked rosy. But, by the end of the year only fuel prices look rosy.
The year 2008 will go down in the country's history as one that saw experiments in policies and politics, all at the cost of the economy. Increased hours of power outages, insecurity, closure of industries and hotels by militant trade unions and the highs and lows of the stock market are merely some of the barbs that rankled this year.
When it started, the country had a liberal economist finance minister Dr Ram Sharan Mahat, who gilded the economic skyline with a golden brush. And now, when the year has come to an end we have the first Maoist finance minister Dr Baburam Bhattarai who believes that capitalism is the major cause of global economic doom.
Dr Bhattarai, on September 19, presented a deficit and ambitious budget of Rs 136.15 billion with tall claims of ushering in an economic revolution to change the centuries-old proletariat structure of Nepali society. The year 2008 leaves us with a shattered dream of economic revolution that we were promised. Nepal has lost one more year in political jingoism.
However, just after three months of the announcement of the budget and five months of the lapse of the current fiscal year, he is trying to stay afloat just to maintain the revenue target. His own militant trade union along with other ruling political party-affiliated ones are throttling industries, forcing their managments on the backfoot and making it generally difficult for them to even mainatin open-eye mode. The newly-formed industry ministry and its minister are trying even harder to understand the problems plaguing the industries that have seen nil growth in recent times. Frequent bandhs and increased load-shedding is bleeding the industries white.
The government may have eked out the revenue target but it has failed to start even a single development project and has double-failed in that it has not been able to create even a single job opportunity. Unemployment is forcing the country's young generation to fan out abroad in search of greener pastures but despite his claims the rebel-turned mainstream politico finance minister Dr Bhattarai has failed to provide them employment opportunities. He has been appealing to Nepali youths to return home but he has no explanation why they should when there are no employment opportunities.
Inflation stands at a high, high of 14.5 per cent despite claims by the central bank that it will crack whip on it and contain within 7.5 per cent. But its spiriling up, up and above, there is no respite to the people.
Of late, the country is getting singed from the heat of the global financial crisis, and migrant workers in Gulf countries as well as Malaysia - the major labour markets for Nepalis - are returning home, and that is certain to hit the remittance that is sent home.
Besides, there is capital flight due to one after another plant shutdown. Colgate-Palmolive is one example where the investors fled the country as they were not feeling safe despite the government's promises of creating an investment-friendly environment.
When the Maoists came to power, a section of society was bristling with excitement that the country would prosper and that there would be greater investment in development works while creating more jobs, but their dreams lie mute in the dust.
In the Tarai, mushrooming militant groups have got industrialists by the short hairs, spreading a donation-terror and making it difficult for them to do business. The law machinery has totally failed to protect industrialists and industrial areas.
The government has failed in all those very aspects that it had claimed that it would bring about change. The people's woes have not been addressed. In public view, it is instead the government itself that is suspected of corruption at the policy level. Instances abound.. Either in the name of declaring an energy crisis for the covert purpose of bringing thermal plants or clamping a ceiling on the purchase of vehicles priced beyond a certain amount just to protecting certain vested interests. You name, you have it. The list goes on...
The capital market -- propelled by the financial institutions -- saw a record high before plunging to the lowest of lows this year. It has no contribution of the real sector even after 15 years of operations. Capital market experts are not slow in pointing out that over and above all the mayhem and mess-up, the Maoist-led government has no 'definite policy' for capital market development.
The ministries of Industry and Transport Management & Labour failed to deliver on any score. The transport entrepreneurs have gone beyond the ministry pale and are forcing the general people to cough up hiked transport fares even after Nepal Oil Corporation, taking a cue from the global scenario, slashed the price of petroleum products four times in a row. Price cuts began on October 25. The slate is still open.
Burn, burn slower, that is the only message that 2008 is leaving us with. All else may be Humpty Dumptyish but it now costs less, on paper, to ride.
Let's ride, if only the transporters will have mercy.
The year 2008 will go down in the country's history as one that saw experiments in policies and politics, all at the cost of the economy. Increased hours of power outages, insecurity, closure of industries and hotels by militant trade unions and the highs and lows of the stock market are merely some of the barbs that rankled this year.
When it started, the country had a liberal economist finance minister Dr Ram Sharan Mahat, who gilded the economic skyline with a golden brush. And now, when the year has come to an end we have the first Maoist finance minister Dr Baburam Bhattarai who believes that capitalism is the major cause of global economic doom.
Dr Bhattarai, on September 19, presented a deficit and ambitious budget of Rs 136.15 billion with tall claims of ushering in an economic revolution to change the centuries-old proletariat structure of Nepali society. The year 2008 leaves us with a shattered dream of economic revolution that we were promised. Nepal has lost one more year in political jingoism.
However, just after three months of the announcement of the budget and five months of the lapse of the current fiscal year, he is trying to stay afloat just to maintain the revenue target. His own militant trade union along with other ruling political party-affiliated ones are throttling industries, forcing their managments on the backfoot and making it generally difficult for them to even mainatin open-eye mode. The newly-formed industry ministry and its minister are trying even harder to understand the problems plaguing the industries that have seen nil growth in recent times. Frequent bandhs and increased load-shedding is bleeding the industries white.
The government may have eked out the revenue target but it has failed to start even a single development project and has double-failed in that it has not been able to create even a single job opportunity. Unemployment is forcing the country's young generation to fan out abroad in search of greener pastures but despite his claims the rebel-turned mainstream politico finance minister Dr Bhattarai has failed to provide them employment opportunities. He has been appealing to Nepali youths to return home but he has no explanation why they should when there are no employment opportunities.
Inflation stands at a high, high of 14.5 per cent despite claims by the central bank that it will crack whip on it and contain within 7.5 per cent. But its spiriling up, up and above, there is no respite to the people.
Of late, the country is getting singed from the heat of the global financial crisis, and migrant workers in Gulf countries as well as Malaysia - the major labour markets for Nepalis - are returning home, and that is certain to hit the remittance that is sent home.
Besides, there is capital flight due to one after another plant shutdown. Colgate-Palmolive is one example where the investors fled the country as they were not feeling safe despite the government's promises of creating an investment-friendly environment.
When the Maoists came to power, a section of society was bristling with excitement that the country would prosper and that there would be greater investment in development works while creating more jobs, but their dreams lie mute in the dust.
In the Tarai, mushrooming militant groups have got industrialists by the short hairs, spreading a donation-terror and making it difficult for them to do business. The law machinery has totally failed to protect industrialists and industrial areas.
The government has failed in all those very aspects that it had claimed that it would bring about change. The people's woes have not been addressed. In public view, it is instead the government itself that is suspected of corruption at the policy level. Instances abound.. Either in the name of declaring an energy crisis for the covert purpose of bringing thermal plants or clamping a ceiling on the purchase of vehicles priced beyond a certain amount just to protecting certain vested interests. You name, you have it. The list goes on...
The capital market -- propelled by the financial institutions -- saw a record high before plunging to the lowest of lows this year. It has no contribution of the real sector even after 15 years of operations. Capital market experts are not slow in pointing out that over and above all the mayhem and mess-up, the Maoist-led government has no 'definite policy' for capital market development.
The ministries of Industry and Transport Management & Labour failed to deliver on any score. The transport entrepreneurs have gone beyond the ministry pale and are forcing the general people to cough up hiked transport fares even after Nepal Oil Corporation, taking a cue from the global scenario, slashed the price of petroleum products four times in a row. Price cuts began on October 25. The slate is still open.
Burn, burn slower, that is the only message that 2008 is leaving us with. All else may be Humpty Dumptyish but it now costs less, on paper, to ride.
Let's ride, if only the transporters will have mercy.
Monday, December 29, 2008
Land price predicted to slowdown within coming 10 months
The zooming price of land will slow down within coming 10 months but not go kaput, predict experts.
"The whopping rise in land prices will slow down in the coming 10 months," said Ganesh Gurung, a sociologist who has been studying the remittance aspect, at an interaction on 'Global financial crisis and its impact on Nepali migrant workers' organised by the Nepal Association of Foreign Employment Agencies (NAFEA) here today.
Land prices in the valley have been climbing up due to violence in the Tarai and the remittances that Nepali migrant workers send home. "Malaysia and the Gulf countries have started feeling the heat of the global financial crisis," he said adding that big construction companies in the Gulf and garment factories in Malaysia as well as construction, industry and service sectors - supported by foreign direct investment (FDI) - have started laying off unskilled workers, including Nepalis.
"FDI in Malaysia has dropped by 50 per cent and they are laying off unskilled workers like Nepalis," said Dr Chiranjivi Nepal, an economist and former chairman of Securities Board of Nepal."Some of the companies which had sent orders for new workers, are now requesting to delay it," said an entrepreneur voicing serious concern at the state of the labour market in Gulf and Malaysia and remittance that is the lifeline of Nepal's economy.
"The government is behaving as if nothing has happened," accused Dr Nepal adding that even a strong economy like India is also serious about the crisis. It has announced various stimulous packages to mitigate the impact of the global financial crisis.Dr Nepal said that every country except Nepal has devised its own strategy to cope with this global crisis. Remittance supports over 60 per cent of Nepal's import. "If the remittance goes down, it will hit imports making it hard for the government to meet the revenue target," he said.
The government should form a high-level monitoring committee to day-to-day access the remittance flow through the Malaysia-Nepal corridor and Japan-Nepal corridor, suggested Gurung. "As a temporary measure, Nepal can diversify the labour market as the high concentration in the Gulf and Malaysia might have an adverse effect on our economy. Diversifying would cushion the shock," he added.
NAFEA president Tilak Bahdur Ranabhat dwelt on the various problems the manpower agencies are facing and urged the government to help them sort out problems in the remittance business that contributes around 17.4 per cent to the total gross domestic product (GDP). "The delay in appointing a labour attache has also caused various problems for working in those countries," he said.
According to official data, 656 Nepalis leave the country every day for greener pastures in other countries, mainly in the Gulf and to Malaysia.Roughly, Rs 38,90,41,095 flows into Nepal as remittance everyday. Almost 2.5 million Nepalis -- 1.2 million official and 1.3 million unofficial figures -- work in various countries across the globe, according to Ranabhat. "Money sent home by one worker maintains a four-member family here. This makes it a total of 10 million people dependent on remittance," he added.
The 10-year long conflict also played a key role in forcing people to go abroad for jobs. At the begining of the conflict, per household used to receive Rs 15,160 per month remittance but at the end of the conflict it crossed Rs 34,698, according to Gurung's study.
Temporary ban for Lebanon
KATHMANDU: The government has temporarily banned Lebanon for Nepali migrants workers from Sunday, due to increasing insecurity for workers because of violence in the Middle East. The Department of Labour and Employment Promotion (DoLEP) would lift the ban once the situation returns to normal. A total of 1,530 Nepalis left for Lebanon in the fiscal year 2007-08. According to the DoLEP 823 worker reached Lebanon during first five months of the current fiscal year.
"The whopping rise in land prices will slow down in the coming 10 months," said Ganesh Gurung, a sociologist who has been studying the remittance aspect, at an interaction on 'Global financial crisis and its impact on Nepali migrant workers' organised by the Nepal Association of Foreign Employment Agencies (NAFEA) here today.
Land prices in the valley have been climbing up due to violence in the Tarai and the remittances that Nepali migrant workers send home. "Malaysia and the Gulf countries have started feeling the heat of the global financial crisis," he said adding that big construction companies in the Gulf and garment factories in Malaysia as well as construction, industry and service sectors - supported by foreign direct investment (FDI) - have started laying off unskilled workers, including Nepalis.
"FDI in Malaysia has dropped by 50 per cent and they are laying off unskilled workers like Nepalis," said Dr Chiranjivi Nepal, an economist and former chairman of Securities Board of Nepal."Some of the companies which had sent orders for new workers, are now requesting to delay it," said an entrepreneur voicing serious concern at the state of the labour market in Gulf and Malaysia and remittance that is the lifeline of Nepal's economy.
"The government is behaving as if nothing has happened," accused Dr Nepal adding that even a strong economy like India is also serious about the crisis. It has announced various stimulous packages to mitigate the impact of the global financial crisis.Dr Nepal said that every country except Nepal has devised its own strategy to cope with this global crisis. Remittance supports over 60 per cent of Nepal's import. "If the remittance goes down, it will hit imports making it hard for the government to meet the revenue target," he said.
The government should form a high-level monitoring committee to day-to-day access the remittance flow through the Malaysia-Nepal corridor and Japan-Nepal corridor, suggested Gurung. "As a temporary measure, Nepal can diversify the labour market as the high concentration in the Gulf and Malaysia might have an adverse effect on our economy. Diversifying would cushion the shock," he added.
NAFEA president Tilak Bahdur Ranabhat dwelt on the various problems the manpower agencies are facing and urged the government to help them sort out problems in the remittance business that contributes around 17.4 per cent to the total gross domestic product (GDP). "The delay in appointing a labour attache has also caused various problems for working in those countries," he said.
According to official data, 656 Nepalis leave the country every day for greener pastures in other countries, mainly in the Gulf and to Malaysia.Roughly, Rs 38,90,41,095 flows into Nepal as remittance everyday. Almost 2.5 million Nepalis -- 1.2 million official and 1.3 million unofficial figures -- work in various countries across the globe, according to Ranabhat. "Money sent home by one worker maintains a four-member family here. This makes it a total of 10 million people dependent on remittance," he added.
The 10-year long conflict also played a key role in forcing people to go abroad for jobs. At the begining of the conflict, per household used to receive Rs 15,160 per month remittance but at the end of the conflict it crossed Rs 34,698, according to Gurung's study.
Temporary ban for Lebanon
KATHMANDU: The government has temporarily banned Lebanon for Nepali migrants workers from Sunday, due to increasing insecurity for workers because of violence in the Middle East. The Department of Labour and Employment Promotion (DoLEP) would lift the ban once the situation returns to normal. A total of 1,530 Nepalis left for Lebanon in the fiscal year 2007-08. According to the DoLEP 823 worker reached Lebanon during first five months of the current fiscal year.
Friday, December 26, 2008
Cooking gas price drops, petro prices drop for the fourth time in a row
The state oil monopoly - Nepal Oil Corporation (NOC) - is spreading good cheer.
In a sign of the changing times, it has reduced the price of the cooking gas by Rs 50, making it Rs 1,150 per cylinder, effective from tonight. This is the first time -- in last two months from October 25, when the NOC started downward revision of price -- that the price of ever-scarce cooking gas has been reduced.
Despite being in the red as far as the cost of cooking gas is concerned, the cut is being made to give relief to consumers. However, there has been symbolism galore in price cuts in other petroleum products. If petrol will cost Rs 5 less - to be available Rs 80.50 per litre as per NOC's figure - then diesel and kerosene have gone down to by only one rupee. Both will be available at 59.50 per litre.
The goodies were announced following a board meeting of NOC late this evening.
Incidentally, this is fourth time that the NOC has come up with downward revision to prices, paying heed to global crude prices.
"We will now make a tentative operating profit of Rs 400 million. As of now, the liabilities stand at Rs 15 billion," said Digamber Jha, managing director, NOC.
The latest round of revision factored in both outstanding and consumers' interest. "We don't want to make good of our past losses at the expense of eroding consumers' confidence," said Purushottam Ojha, secretary, commerce and supplies.
NOC has gone ahead with the correction a week ahead of the schedule -- as per the norm, it receives the price list from the sole supplier Indian Oil Corporation (IOC) on 1st and 15th of every English month and revises price on the list it receives on 1st -- to lift consumers' spirit.
There is good news for Tarai consumers as well. The latest mechanism will not only ease the demand for fuel in the central region, but also makes the prices of fuel cheaper across Tarai.NOC is opposed to drastic price cuts due to two basic reasons. "Of late, the dollar has appreciated against the Nepali currency. Also, the prices have to be on a par with bordering Indian towns, else there will be a skewed demand-supply ratio," said Ojha.
The rate of Air Turbine Oil (ATF) has also gone down by Rs 5 to Rs 90 per litre for domestic and $200 to $1000 per kilolitre for international flights.
The corrections are making no impact on the all-powerful transport entrepreneurs' cartel. They have steadfastly refused to reduce transport fares, flexing their muscles and subsequently pushing the inflation up to 14.5 per cent.
The Ministry of Labour and Transport Management has been reduced to a casual bystander.
The NOC slashed the petro prices on October 25, November 1, December 3 and today (December 26) for thr fourth time in two months.
Price in the Valley
Cooking gas -- Rs 1,150 per cylinder
Petrol -- Rs 80.50 per litre
Diesel/Kerosene -- Rs 59.50
ATF (domestic) -- Rs 85 per litre
ATF (Int'l) -- $1000/kl
In a sign of the changing times, it has reduced the price of the cooking gas by Rs 50, making it Rs 1,150 per cylinder, effective from tonight. This is the first time -- in last two months from October 25, when the NOC started downward revision of price -- that the price of ever-scarce cooking gas has been reduced.
Despite being in the red as far as the cost of cooking gas is concerned, the cut is being made to give relief to consumers. However, there has been symbolism galore in price cuts in other petroleum products. If petrol will cost Rs 5 less - to be available Rs 80.50 per litre as per NOC's figure - then diesel and kerosene have gone down to by only one rupee. Both will be available at 59.50 per litre.
The goodies were announced following a board meeting of NOC late this evening.
Incidentally, this is fourth time that the NOC has come up with downward revision to prices, paying heed to global crude prices.
"We will now make a tentative operating profit of Rs 400 million. As of now, the liabilities stand at Rs 15 billion," said Digamber Jha, managing director, NOC.
The latest round of revision factored in both outstanding and consumers' interest. "We don't want to make good of our past losses at the expense of eroding consumers' confidence," said Purushottam Ojha, secretary, commerce and supplies.
NOC has gone ahead with the correction a week ahead of the schedule -- as per the norm, it receives the price list from the sole supplier Indian Oil Corporation (IOC) on 1st and 15th of every English month and revises price on the list it receives on 1st -- to lift consumers' spirit.
There is good news for Tarai consumers as well. The latest mechanism will not only ease the demand for fuel in the central region, but also makes the prices of fuel cheaper across Tarai.NOC is opposed to drastic price cuts due to two basic reasons. "Of late, the dollar has appreciated against the Nepali currency. Also, the prices have to be on a par with bordering Indian towns, else there will be a skewed demand-supply ratio," said Ojha.
The rate of Air Turbine Oil (ATF) has also gone down by Rs 5 to Rs 90 per litre for domestic and $200 to $1000 per kilolitre for international flights.
The corrections are making no impact on the all-powerful transport entrepreneurs' cartel. They have steadfastly refused to reduce transport fares, flexing their muscles and subsequently pushing the inflation up to 14.5 per cent.
The Ministry of Labour and Transport Management has been reduced to a casual bystander.
The NOC slashed the petro prices on October 25, November 1, December 3 and today (December 26) for thr fourth time in two months.
Price in the Valley
Cooking gas -- Rs 1,150 per cylinder
Petrol -- Rs 80.50 per litre
Diesel/Kerosene -- Rs 59.50
ATF (domestic) -- Rs 85 per litre
ATF (Int'l) -- $1000/kl
Wednesday, December 24, 2008
Nepse goes online for internet trading
Good news, one can trade shares online!
"Investors can file purchase or sale orders for shares from home or office online beginning January 13," said Rewat Bahadur Karki, chief executive officer and general manager of Nepal Stock Exchange (Nepse), the government undertaking.
"Though, it's the basic stage of internet trading, Nepse has come of age and adopted a technological revolution in the trading system in the domestic market," Karki said adding that seven brokers have applied for going online. Nepse has permitted these seven brokers to go online through the Basic Internet Based Trading System (BIBTS).
The brokers have to have their own website now so that they can, after agreement with their institutional or personal clients, receive sale or purchase orders on their own websites.
"Nepse will provide the BIBTS software free of cost," said Karki. "But they have to develop their own websites."
However, the process will be completed only after the Central Depository System (CDS) comes into effect. "It's a part of CDS," said Sanjay Amatya of Market Securities and Exchange Pvt Ltd (Broker No 5) that has applied for the internet trading. His firm is developing its own website for internet trading.
Securities Board of Nepal (Sebon) has sent the draft of CDS to the finance ministry a long ago. But the ministry has to prepare Trustee Act before clearing it.
Nepse started trading through Automated Computerised Trading System (Automation) from August 24, 2007. After Automation, Nepse started trading through Wide Area Network (WAN), an extended facility for brokers, who want to trade from their own offices. Almost all the brokers trade from their offices now as they donot need to go to the trading floor at the Nepse.
After WAN connectivity, Nepse took another giant leap by making available to investors real time information. Online trading is the latest and the most revolutionary step of Nepse in the history of Nepali capital market that is only one-and-a-half decade old.
Asian Development Bank (ADB) under the CFG project has supported the whole process of the Nepali stock market automation.
To-be-online brokers
1. Market Securities and Exchange Pvt Ltd (broker no 5)
2. Khandelwal Stock Brokering Company (broker no 17)
3. Nepal Investment and Securities Pvt Ltd (broker no 19)
4. Sweta Securities Pvt Ltd (broker no 25)
5. Shreekrishna Securities Ltd (broker no 28)
6. Trishul Securities and Investment Ltd (broker no 29)
7. Prime Securities Pvt Ltd (broker no 16)
New Sebon chief
Surbir Poudel, newly appointed chairman of the Securities Board of Nepal (Sebon) - the capital market regulator - took charge from Wednesday.
"Investors can file purchase or sale orders for shares from home or office online beginning January 13," said Rewat Bahadur Karki, chief executive officer and general manager of Nepal Stock Exchange (Nepse), the government undertaking.
"Though, it's the basic stage of internet trading, Nepse has come of age and adopted a technological revolution in the trading system in the domestic market," Karki said adding that seven brokers have applied for going online. Nepse has permitted these seven brokers to go online through the Basic Internet Based Trading System (BIBTS).
The brokers have to have their own website now so that they can, after agreement with their institutional or personal clients, receive sale or purchase orders on their own websites.
"Nepse will provide the BIBTS software free of cost," said Karki. "But they have to develop their own websites."
However, the process will be completed only after the Central Depository System (CDS) comes into effect. "It's a part of CDS," said Sanjay Amatya of Market Securities and Exchange Pvt Ltd (Broker No 5) that has applied for the internet trading. His firm is developing its own website for internet trading.
Securities Board of Nepal (Sebon) has sent the draft of CDS to the finance ministry a long ago. But the ministry has to prepare Trustee Act before clearing it.
Nepse started trading through Automated Computerised Trading System (Automation) from August 24, 2007. After Automation, Nepse started trading through Wide Area Network (WAN), an extended facility for brokers, who want to trade from their own offices. Almost all the brokers trade from their offices now as they donot need to go to the trading floor at the Nepse.
After WAN connectivity, Nepse took another giant leap by making available to investors real time information. Online trading is the latest and the most revolutionary step of Nepse in the history of Nepali capital market that is only one-and-a-half decade old.
Asian Development Bank (ADB) under the CFG project has supported the whole process of the Nepali stock market automation.
To-be-online brokers
1. Market Securities and Exchange Pvt Ltd (broker no 5)
2. Khandelwal Stock Brokering Company (broker no 17)
3. Nepal Investment and Securities Pvt Ltd (broker no 19)
4. Sweta Securities Pvt Ltd (broker no 25)
5. Shreekrishna Securities Ltd (broker no 28)
6. Trishul Securities and Investment Ltd (broker no 29)
7. Prime Securities Pvt Ltd (broker no 16)
New Sebon chief
Surbir Poudel, newly appointed chairman of the Securities Board of Nepal (Sebon) - the capital market regulator - took charge from Wednesday.
Government spends less on development works
Nearly half the fiscal year has lapsed without any major development works in the country.
According to data from the finance minsitry, in the first five months - till December 15 - of this fiscal year 2008-09, the government spent very little on development works while administrative expenses multiplied by eight times as against development expenses during the period.
The government spent Rs 4.87 billion under capital expenditure - that is development works during the period, said the finance ministry. In contrast, the government spent Rs 32.33 billion under recurrent expenditure which is routine expenses and mainly administrative expenses that include expenses of foreign trips by ministers and their salaries.
The increase in administrative costs directly pushes consumer prices up. "Theoretically, the increase in administrative expenses means increase in consumer prices," said Dr Shanker Sharma, former vice-chairman of National Planning Commission (NPC), the government think-tank.
"Ideally, prices will go up but it also depends on last year's development works' expenses during the same period," he said adding that development spending for this fiscal year's five months was unsatisfactory.
The government has made tall promises of infrastructure development but till the half of the fiscal year, there has been no 'visible' development work by the Maoist-led government.
To top that, consumer price index is skyrocketing, as according to Nepal Rastra Bank (NRB) the year-on-year inflation was at 14.5 per cent in the first four months against 6.3 per cent in the same period the last fiscal. There seems no end in sight to the price hike as transporters have not yet reduced transportation charges though fuel price in the domestic market went down thrice since October.
Including the principal amount of Rs 6.32 billion as loan paid, the total government expenditure stands at Rs 43.53 billion - three per cent less than in the first five months of last fiscal year.
The government has released Rs 54.1 billion - Rs 40.7 billion for administrative expenses, Rs 6.77 billion for development works and Rs 7.16 billion for foreign loan repayment - during the period. The amount is 1.2 per cent less than allotted to the ministries for the same period last fiscal year, said the finance ministry.
The government is yet to spent around Rs 11 billion of the total released amount. "The government has not spent the total released amount of Rs 54.1 billion," said Shankar Prasad Adhikari, spokesperson at the finance ministry.
According to data from the finance minsitry, in the first five months - till December 15 - of this fiscal year 2008-09, the government spent very little on development works while administrative expenses multiplied by eight times as against development expenses during the period.
The government spent Rs 4.87 billion under capital expenditure - that is development works during the period, said the finance ministry. In contrast, the government spent Rs 32.33 billion under recurrent expenditure which is routine expenses and mainly administrative expenses that include expenses of foreign trips by ministers and their salaries.
The increase in administrative costs directly pushes consumer prices up. "Theoretically, the increase in administrative expenses means increase in consumer prices," said Dr Shanker Sharma, former vice-chairman of National Planning Commission (NPC), the government think-tank.
"Ideally, prices will go up but it also depends on last year's development works' expenses during the same period," he said adding that development spending for this fiscal year's five months was unsatisfactory.
The government has made tall promises of infrastructure development but till the half of the fiscal year, there has been no 'visible' development work by the Maoist-led government.
To top that, consumer price index is skyrocketing, as according to Nepal Rastra Bank (NRB) the year-on-year inflation was at 14.5 per cent in the first four months against 6.3 per cent in the same period the last fiscal. There seems no end in sight to the price hike as transporters have not yet reduced transportation charges though fuel price in the domestic market went down thrice since October.
Including the principal amount of Rs 6.32 billion as loan paid, the total government expenditure stands at Rs 43.53 billion - three per cent less than in the first five months of last fiscal year.
The government has released Rs 54.1 billion - Rs 40.7 billion for administrative expenses, Rs 6.77 billion for development works and Rs 7.16 billion for foreign loan repayment - during the period. The amount is 1.2 per cent less than allotted to the ministries for the same period last fiscal year, said the finance ministry.
The government is yet to spent around Rs 11 billion of the total released amount. "The government has not spent the total released amount of Rs 54.1 billion," said Shankar Prasad Adhikari, spokesperson at the finance ministry.
Monday, December 22, 2008
Don't invest in unproductive sectors: Dr Bhattarai
The government is discouraging investment in unproductive sectors like urban land, houses and vehicles. Finance Minister Dr Baburam Bhattarai, addressing entrepreneurs here today, also made it clear that Voluntary Disclosure of Income Source (VDIS) was not property tax.
"Rather, it's an income tax," he clarified. There has been confusion over VDIS as to whether it is a property or income tax.
Dr Bhattarai was speaking at an interaction on 'Policies and Processes in Revenue,' organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) -- the umbrella organisation of Nepali private sector -- here.
The government has brought the new rule of showing income source while buying automobile, land, and land and house worth over Rs 2 million, Rs 3 million and Rs 5 million, respectively. "This is to discourage investment in unproductive sectors," he clarified, adding, "Instead of investing in such sectors, invest in productive ones."
He, however, did not say anything about the present insecure environment for investment. FNCCI president Kush Kumar Joshi, requested the finance minister to provide security to the industrial sector. "Apart from security, labour unrest and load-shedding are bleeding the industries white," Joshi said.
The Maoist-led government has brought the VDIS scheme to generate more fund for physical infrastructure development and the education and health sectors. Under the scheme, one has to disclose one's own property on the price based on July 16 and pay 10 per cent tax. "The government will not disclose it, if the taxpayer wants secrecy," assured Kapil Dev Ghimire, director general of Inland revenue Department (IRD). The entrepreneurs, however, called for a reduction in the tax and asked for some more time frame.
Acting revenue secretary Krishna Hari Baskota explained to the entrepreneurs that ancestral property does not come under the VDIS scheme. "The Act will also protect those who pay tax, unlike in 2058 BS when the government had brought a similar scheme but failed," he added.
FNCCI flays attack on media
KATHMANDU: FNCCI has condemned the attack on Himal Khabar Patrika, a publication of Himal Media. Issuing a press statement, FNCCI called for an end to attacks on free press and demanded action against the people involved.
"Rather, it's an income tax," he clarified. There has been confusion over VDIS as to whether it is a property or income tax.
Dr Bhattarai was speaking at an interaction on 'Policies and Processes in Revenue,' organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) -- the umbrella organisation of Nepali private sector -- here.
The government has brought the new rule of showing income source while buying automobile, land, and land and house worth over Rs 2 million, Rs 3 million and Rs 5 million, respectively. "This is to discourage investment in unproductive sectors," he clarified, adding, "Instead of investing in such sectors, invest in productive ones."
He, however, did not say anything about the present insecure environment for investment. FNCCI president Kush Kumar Joshi, requested the finance minister to provide security to the industrial sector. "Apart from security, labour unrest and load-shedding are bleeding the industries white," Joshi said.
The Maoist-led government has brought the VDIS scheme to generate more fund for physical infrastructure development and the education and health sectors. Under the scheme, one has to disclose one's own property on the price based on July 16 and pay 10 per cent tax. "The government will not disclose it, if the taxpayer wants secrecy," assured Kapil Dev Ghimire, director general of Inland revenue Department (IRD). The entrepreneurs, however, called for a reduction in the tax and asked for some more time frame.
Acting revenue secretary Krishna Hari Baskota explained to the entrepreneurs that ancestral property does not come under the VDIS scheme. "The Act will also protect those who pay tax, unlike in 2058 BS when the government had brought a similar scheme but failed," he added.
FNCCI flays attack on media
KATHMANDU: FNCCI has condemned the attack on Himal Khabar Patrika, a publication of Himal Media. Issuing a press statement, FNCCI called for an end to attacks on free press and demanded action against the people involved.
Sunday, December 21, 2008
YCL told to clear out from industrial areas
The Department of Industrial Management has issued a 35-day ultimatum to the ruling CPN-Maoist's miltant youth wing, the Young Communist League (YCL), to remove its camps from industrial areas.
Minister for Industries, Asta Laxmi Shakya said at an interaction progremme organised by Reporters' Club here today that the ministry was serious about removing the YCL camps from industrial areas. "The department on Thursday issued a 35-day notice to YCL to remove its camps from industrial areas to create healthy industrial environment," she said and added that she hoped that the Maoists would act as a responsible party and help remove the YCL camps.
However, she was at a loss for words when asked what the ministry would do if the YCL doesn't remove the camps after the 35 days, a deadline that ends on January 21.
The YCL has camps in Balaju Industrial Area and Lalitpur Industrial Area, apart from those in Hetauda Industrial Area, Biratnagar Industrial Area and Dharan Industrial Area, the industry minister said. She also condemned the donation-terror and industry closure by militant trade unions and said that industries throughout the country had been hit hard by the militancy of trade unions in the name of seeking minimum wages.
The trade unions affiliated to all major parties including the ruling Maoists, UML and Nepali Congress are vying with one another in closing the industries by putting outrageous demands to lure workers to their respective unions.
While addressing industrialists on Friday during the sixth annual general meeting of the Confederation of Nepalese Industries, Prime Minister Pushpa Kamal Dahal 'Prachanda' had admitted that there was a competition among the trade unions to close industries. "I am bringing a proposal to stop all kinds of bandhs," he had said in a bid to assure industrialists. "But I need other political parties' cooperation for that," the rebel-turned-Prime Minister said.
Despite repeated assurances from ministers of Labour and Transport Management, Industry, and even the Prime Minister himself, the stridency of trade unions has not reduced. Instead, they are hardening their stance by the day causing immense harm to the economy.
One industrialist said that the situation was leading to more unemployment and that the Finance Ministry would bear the burnt as revenue was certain to be hit hard. "The state coffer will suffer, if the militancy of trade unions would not stop soon," he said.
Industrialists, ministers parley
KATHMANDU: A team of industrialists from Biratnagar led by Dinesh Golccha, president, Morang Chamber of Industries (CIM), met Industry Minister Astalaxmi Shakya and Water Resources Minister Bishnu Poudel here on Sunday and apprised them of problems the industries in Biratnagar are facing due to load-shedding. The industrialists suggested solutions including repairing five flood-hit transmission lines and maintenance of multi-fuel plant of 39-MW power that is lying unused since a year. Both ministers assured them of an early solution.
Minister for Industries, Asta Laxmi Shakya said at an interaction progremme organised by Reporters' Club here today that the ministry was serious about removing the YCL camps from industrial areas. "The department on Thursday issued a 35-day notice to YCL to remove its camps from industrial areas to create healthy industrial environment," she said and added that she hoped that the Maoists would act as a responsible party and help remove the YCL camps.
However, she was at a loss for words when asked what the ministry would do if the YCL doesn't remove the camps after the 35 days, a deadline that ends on January 21.
The YCL has camps in Balaju Industrial Area and Lalitpur Industrial Area, apart from those in Hetauda Industrial Area, Biratnagar Industrial Area and Dharan Industrial Area, the industry minister said. She also condemned the donation-terror and industry closure by militant trade unions and said that industries throughout the country had been hit hard by the militancy of trade unions in the name of seeking minimum wages.
The trade unions affiliated to all major parties including the ruling Maoists, UML and Nepali Congress are vying with one another in closing the industries by putting outrageous demands to lure workers to their respective unions.
While addressing industrialists on Friday during the sixth annual general meeting of the Confederation of Nepalese Industries, Prime Minister Pushpa Kamal Dahal 'Prachanda' had admitted that there was a competition among the trade unions to close industries. "I am bringing a proposal to stop all kinds of bandhs," he had said in a bid to assure industrialists. "But I need other political parties' cooperation for that," the rebel-turned-Prime Minister said.
Despite repeated assurances from ministers of Labour and Transport Management, Industry, and even the Prime Minister himself, the stridency of trade unions has not reduced. Instead, they are hardening their stance by the day causing immense harm to the economy.
One industrialist said that the situation was leading to more unemployment and that the Finance Ministry would bear the burnt as revenue was certain to be hit hard. "The state coffer will suffer, if the militancy of trade unions would not stop soon," he said.
Industrialists, ministers parley
KATHMANDU: A team of industrialists from Biratnagar led by Dinesh Golccha, president, Morang Chamber of Industries (CIM), met Industry Minister Astalaxmi Shakya and Water Resources Minister Bishnu Poudel here on Sunday and apprised them of problems the industries in Biratnagar are facing due to load-shedding. The industrialists suggested solutions including repairing five flood-hit transmission lines and maintenance of multi-fuel plant of 39-MW power that is lying unused since a year. Both ministers assured them of an early solution.
Saturday, December 20, 2008
Nepse plunge belies investment myths
The whopping fall in the index of commercial banks, development banks and finance companies group -- considered blue chip shares -- in recent weeks belies the belief that financial institutions are goldmines.
This week, commercial banks lost 31.03 points to slide to reach 694.17 points, development banks lost 45.63 points to slide to 1094.89 points, finance companies lost 22.69 points to stop at 971.04 points, hydropower companies lost 4.72 points to go to 918.82 points and insurance companies lost 19.88 points to go to 731.34 points, respectively. They also pulled down the Nepal Stock Exchange (Nepse) index down by 22.73 points to 720.52 points from last week's closing of 743.25 points.
While stock markets are known for their irrational exuberance the domestic secondary market seems to be in correction mode over the recent months, compelling investors to be more circumspect. One should attach place importance to the company, its background and promoters, financials and valuations before investing in its shares.
This week, the total transaction dropped by 20.95 per cent to tumble to Rs 352.85 million from last week's Rs 446.37 million. Around 82 companies' scrips were traded in the secondary market where the group-A companies contributed 56.08 per cent to the total trading from last week's 39.87 per cent. Nepse ended in negative territory for all five days of this week.
The hype surrounding the secondary market is cooling down as the float index -- calculated on the basis of real transactions -- lost 2.37 points to 69.74 points from last week's closing of 72.16 points. Similarly, the sensitive index -- a barometer of group-A companies -- also plunged by 7.07 points to slide down to 188.40 points from last weeks' closing of 195.47 points.
This week, Siddhartha Bank (with Rs 44.64 million), Nepal Development and Employment Promotion Bank (with Rs 29.16 million), Standard Chartered Bank Nepal (with Rs 24.04 million), IME Financial Institution (with Rs 21.76 million) and Annapurna Bikas Bank (with Rs 20.34 million) were the top scorers.
In terms of numbers of share units traded, Siddhartha Bank topped the chart with 41,000-unit shares while in terms of number of transactions Nepal Development and Employment Promotion Bank topped the chart with 653 transactions.
This week, commercial banks lost 31.03 points to slide to reach 694.17 points, development banks lost 45.63 points to slide to 1094.89 points, finance companies lost 22.69 points to stop at 971.04 points, hydropower companies lost 4.72 points to go to 918.82 points and insurance companies lost 19.88 points to go to 731.34 points, respectively. They also pulled down the Nepal Stock Exchange (Nepse) index down by 22.73 points to 720.52 points from last week's closing of 743.25 points.
While stock markets are known for their irrational exuberance the domestic secondary market seems to be in correction mode over the recent months, compelling investors to be more circumspect. One should attach place importance to the company, its background and promoters, financials and valuations before investing in its shares.
This week, the total transaction dropped by 20.95 per cent to tumble to Rs 352.85 million from last week's Rs 446.37 million. Around 82 companies' scrips were traded in the secondary market where the group-A companies contributed 56.08 per cent to the total trading from last week's 39.87 per cent. Nepse ended in negative territory for all five days of this week.
The hype surrounding the secondary market is cooling down as the float index -- calculated on the basis of real transactions -- lost 2.37 points to 69.74 points from last week's closing of 72.16 points. Similarly, the sensitive index -- a barometer of group-A companies -- also plunged by 7.07 points to slide down to 188.40 points from last weeks' closing of 195.47 points.
This week, Siddhartha Bank (with Rs 44.64 million), Nepal Development and Employment Promotion Bank (with Rs 29.16 million), Standard Chartered Bank Nepal (with Rs 24.04 million), IME Financial Institution (with Rs 21.76 million) and Annapurna Bikas Bank (with Rs 20.34 million) were the top scorers.
In terms of numbers of share units traded, Siddhartha Bank topped the chart with 41,000-unit shares while in terms of number of transactions Nepal Development and Employment Promotion Bank topped the chart with 653 transactions.
Friday, December 19, 2008
Govt ‘in the dark’ about diesel plant economics
No end to load shedding for next five years
Nepal Electricity Authority (NEA) officials have criticised the government proposition to set up costly thermal power plants a day after the cabinet announced 'Energy Crisis'. Private entrepreneurs, meanwhile, said the private sector could lose Rs 75 billion next year due to power shortage, an amount equal to almost half the government’s annual budget.
Speaking at a programme, organised by the Reporters’ Club here today, two senior officials of the NEA said the government should search for otheralternatives. “A diesel-run thermal plant is not only expensive but also hi-tech,” said Uttar Kumar Shrestha, executive director, NEA. One of the immediate options would be to purchase power from India by repairing the flood-damaged transmission lines as soon as possible, he said. Nepal, currently, has an agreement with India to import 120 MW of electricity. Koshi flood fury has damaged the Duhabi-Kataiya transmission line through which 40 MW of electricity is to be imported.
The NEA is planning to repair the flood-damaged transmission lines from February once the situation improves. Until then people will have to face 16-hour load-shedding. “NEA is not the only entity responsible for the load-shedding, the government and the private sector are also to blame,” Shrestha said.
Contrary to the Maoist-led government's programme of generating 10,000 MW in 10 years, he however, said that 700 MW will be generated in next five years. According to Shrestha, it would take another five years before load-shedding could be a thing of the past.
Dr Jeebendra Jha, who looks after the supply side of the NEA, blamed the government for not doing enough home-work. “The cabinet’s decision to install thermal plant will be a ‘disaster”. Besides, it is not viable both financially and physically,” he said. “Over-politicisation in hydropower has led the country to this dark hour,” he added.
Gyanendra Bahadur Pradhan, entrepreneur and hydro-expert, also emphasised immediatealternatives. “Industries are being hit hard. And, closure of industries due to power cut will lead to unemployment problem,” he reasoned.
White PaperWhite paper on energy crisis: PM
KATHMANDU: Speaking on the occasion of the sixth AGM of the Confederation of Nepalese Industries (CNI) here today, Prime Minister Pushpa Kamal Dahal ‘Prachanda’ said that his government wasworking to resolve the problems afflicting the industrial sector and bring an end to the practice of strikes, bandhs and closures.He laid the blame for the current power supply crisis at the doorsteps of the previous governments and accused them of shortsightedness in regard to the energy sector. Prachanda also said that he would bring out a white paper on the energy crisis. Earlier, during the royal regime also the former king wanted top bring the thermal plant and the people protested. Almost after two years the Maoist-led government is also hell bent on bringing the costly thermal plant. All the king's ment are now advisors to the Maoists and they are fooling both the Maoists and people.
Nepal Electricity Authority (NEA) officials have criticised the government proposition to set up costly thermal power plants a day after the cabinet announced 'Energy Crisis'. Private entrepreneurs, meanwhile, said the private sector could lose Rs 75 billion next year due to power shortage, an amount equal to almost half the government’s annual budget.
Speaking at a programme, organised by the Reporters’ Club here today, two senior officials of the NEA said the government should search for otheralternatives. “A diesel-run thermal plant is not only expensive but also hi-tech,” said Uttar Kumar Shrestha, executive director, NEA. One of the immediate options would be to purchase power from India by repairing the flood-damaged transmission lines as soon as possible, he said. Nepal, currently, has an agreement with India to import 120 MW of electricity. Koshi flood fury has damaged the Duhabi-Kataiya transmission line through which 40 MW of electricity is to be imported.
The NEA is planning to repair the flood-damaged transmission lines from February once the situation improves. Until then people will have to face 16-hour load-shedding. “NEA is not the only entity responsible for the load-shedding, the government and the private sector are also to blame,” Shrestha said.
Contrary to the Maoist-led government's programme of generating 10,000 MW in 10 years, he however, said that 700 MW will be generated in next five years. According to Shrestha, it would take another five years before load-shedding could be a thing of the past.
Dr Jeebendra Jha, who looks after the supply side of the NEA, blamed the government for not doing enough home-work. “The cabinet’s decision to install thermal plant will be a ‘disaster”. Besides, it is not viable both financially and physically,” he said. “Over-politicisation in hydropower has led the country to this dark hour,” he added.
Gyanendra Bahadur Pradhan, entrepreneur and hydro-expert, also emphasised immediatealternatives. “Industries are being hit hard. And, closure of industries due to power cut will lead to unemployment problem,” he reasoned.
White PaperWhite paper on energy crisis: PM
KATHMANDU: Speaking on the occasion of the sixth AGM of the Confederation of Nepalese Industries (CNI) here today, Prime Minister Pushpa Kamal Dahal ‘Prachanda’ said that his government wasworking to resolve the problems afflicting the industrial sector and bring an end to the practice of strikes, bandhs and closures.He laid the blame for the current power supply crisis at the doorsteps of the previous governments and accused them of shortsightedness in regard to the energy sector. Prachanda also said that he would bring out a white paper on the energy crisis. Earlier, during the royal regime also the former king wanted top bring the thermal plant and the people protested. Almost after two years the Maoist-led government is also hell bent on bringing the costly thermal plant. All the king's ment are now advisors to the Maoists and they are fooling both the Maoists and people.
Thursday, December 18, 2008
Wage row roiling industrial waters
The militancy of trade unions is increasing either in the name of minimum wage or permanent appointment or direct appointment, hitting the economy hard.
The dispute in Birgunj-Pathlaiya industrial corridor that saw the closure of over three dozen industries including multinational company Surya Nepal has not yet been resolved. At the same time, other businesses are also facing similar problems.
Despite Maoist minister for Labour and Transport Management Lekhraj Bhatta's assurances of smooth operation of industries, his own party's trade union wing All Nepal Trade Unions' Federation (ANTUF) and the UML-affiliated GEFONT are holding industries to ransom. They have even not spared hotels, having padlocked Everest Panorama Resort since yesterday."Such closure during the tourist season will hit the tourism industry as a whole," said Hotels Association of Nepal (HAN). After the agreement between trade unions and Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the minimum wage issue was settled but the trade unions have begun cribbing about their own agreement.
The ongoing dispute is a fallout of the vexed minimum wage issue. The government has hiked it from Rs 3,300 to Rs 4,600 (Rs 3,050 basic salary and Rs 1,550 dearness allowance). The government-affiliated trade unions are demanding an across-the-board increase in monthly salary for all workers irrespective of their wages and designations, in contravention of the government decision."
Though they know that their demand is illegal, they want salary increase across the board," said a Birgunj-based industrialist who has been crying foul at the unions' move, dubbing it 'illegitimate'. But, the stir-hardened unions are firmly standing their ground despite the minister's assurance.
The trade unions claim that the agreement inked between FNCCI and trade unions inadvertently got distorted in the official Gazette. Though there seems no confusion over the basic salary figure, the problem persists as far as dearness allowance and other allowances are concerned, ANTUF vice-president Badri Bajgain said.
The unions maintain that the Gazette states that 'salary and allowances will be adjusted' - instead of salary and dearness allowance. The hike was given after January 15, 2008, as agreed by the two parties on November 30.Seven trade unions including the Maoists-affiliated ANTUF, UML's GEFONT, NC-affiliated Nepal Trade Union Congress issued a release stating that the confusion over the dearness allowance was due to the 'distortion' in the Gazette. They urged the government to rectify the anomalies at the earliest to ensure industrial operations and output.The Maoists-led government's promise of creating an investment friendly environment has all but failed, thanks to their own trade unions that are creating disturbances."
Apart from labour unrest, due to the irregular power supply and frequent highway disruptions industries are facing harrowing times," CA member and president of Confederation of Nepalese Industries (CNI) Binod Chaudhary said.
FNCCIplea to president
KATHMANDU: FNCCI on Thursday met President Dr Rambaran Yadav to apprise him of the problems industries are facing. According to FNCCI, President Yadav lauded their role in the country's economy and asked the private sector to work more effectively. FNCCI president Kush Kumar Joshi urged Dr Yadav to ensure the creation of an investment friendly environment and the implementation of Public Private Partnership.
The dispute in Birgunj-Pathlaiya industrial corridor that saw the closure of over three dozen industries including multinational company Surya Nepal has not yet been resolved. At the same time, other businesses are also facing similar problems.
Despite Maoist minister for Labour and Transport Management Lekhraj Bhatta's assurances of smooth operation of industries, his own party's trade union wing All Nepal Trade Unions' Federation (ANTUF) and the UML-affiliated GEFONT are holding industries to ransom. They have even not spared hotels, having padlocked Everest Panorama Resort since yesterday."Such closure during the tourist season will hit the tourism industry as a whole," said Hotels Association of Nepal (HAN). After the agreement between trade unions and Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the minimum wage issue was settled but the trade unions have begun cribbing about their own agreement.
The ongoing dispute is a fallout of the vexed minimum wage issue. The government has hiked it from Rs 3,300 to Rs 4,600 (Rs 3,050 basic salary and Rs 1,550 dearness allowance). The government-affiliated trade unions are demanding an across-the-board increase in monthly salary for all workers irrespective of their wages and designations, in contravention of the government decision."
Though they know that their demand is illegal, they want salary increase across the board," said a Birgunj-based industrialist who has been crying foul at the unions' move, dubbing it 'illegitimate'. But, the stir-hardened unions are firmly standing their ground despite the minister's assurance.
The trade unions claim that the agreement inked between FNCCI and trade unions inadvertently got distorted in the official Gazette. Though there seems no confusion over the basic salary figure, the problem persists as far as dearness allowance and other allowances are concerned, ANTUF vice-president Badri Bajgain said.
The unions maintain that the Gazette states that 'salary and allowances will be adjusted' - instead of salary and dearness allowance. The hike was given after January 15, 2008, as agreed by the two parties on November 30.Seven trade unions including the Maoists-affiliated ANTUF, UML's GEFONT, NC-affiliated Nepal Trade Union Congress issued a release stating that the confusion over the dearness allowance was due to the 'distortion' in the Gazette. They urged the government to rectify the anomalies at the earliest to ensure industrial operations and output.The Maoists-led government's promise of creating an investment friendly environment has all but failed, thanks to their own trade unions that are creating disturbances."
Apart from labour unrest, due to the irregular power supply and frequent highway disruptions industries are facing harrowing times," CA member and president of Confederation of Nepalese Industries (CNI) Binod Chaudhary said.
FNCCIplea to president
KATHMANDU: FNCCI on Thursday met President Dr Rambaran Yadav to apprise him of the problems industries are facing. According to FNCCI, President Yadav lauded their role in the country's economy and asked the private sector to work more effectively. FNCCI president Kush Kumar Joshi urged Dr Yadav to ensure the creation of an investment friendly environment and the implementation of Public Private Partnership.
Binod Chaudhary becomes president for third time
Binod Kumar Chaudhary has been elected president of the Confederation of Nepalese Industries (CNI) for the third time. CNI also elected five vice-presidents and a six-member governing council today. It will hold its sixth annual general meeting (AGM) tomorrow."At a time when industrial environment is worsening, entrepreneurs are being targetted and their morale is down, CNI's sixth AGM will send a positive message," said Chaudhary, who is also a CA member. He added that the new CNI committee would contribute to the industrial revolution in the country.
Along with Chaudhary, the governing council has Chiranjilal Agrawal, Bijay Kumar Shah, Shreedhar Prasad Acharya, Tolaram Dugar and Tekchandra Pokharel. The five vice-presidnts are Narendra Kumar Basnyat, Birendra Kumar Shanghai, Haribhakta Sharma, Anuj Agrawal and Anand Bagaria while Anil Shah, Rajendra Aryal, Gunchandra Bista and Hemant Golchha among others are members.
Barsha Shrestha will lead WEF and Dipendra Tandon will lead YEF while Upendra Poudyal and Mahesh Kumar Lohiya are in CNI's national council.
Wednesday, December 17, 2008
Price equaliser deals adulteraters a blow
Popularly called the poor man's fuel, kerosene had become a goldmine for some petroleum products traders. They were mixing kerosene in petrol and diesel to make huge profits, but after the price of kerosene and diesel were brought at par they received a rude blow because that left them with no extra profit. Recent data of kerosene sales proves that.
The state oil monopoly Nepal Oil Corporation (NOC) has lived up to its promise and slashed retail prices of petrol, diesel and kerosene thrice since October 25. This December, it fixed the price of kerosene at Rs 60.50 per litre which is on par with diesel. After NOC equalised the prices of diesel and kerosene, the sales of kerosene drastically dropped.
In early winter (Mangsir) last year, the sales of kerosene was 13,668 kilolitres (kl) and a year before that was 18,167 kl, However, this winter saw a whopping fall in the sales - just 5,128 kl."The almost 62 per cent drop in sales is really astounding," said NOC spokesperson Mukund Dhungel. Due to the huge difference in figures, NOC also has no accurate estimate of the real demand of kerosene, he added.
"Petroleum dealers are aware of the adulteration," a petrol pump owner said while admitting some 'unscrupulous traders' were making huge money.
According to him, normally turpentine - a liquid chemical used in painting - is mixed with petrol while earlier kerosene - then a cheaper fuel - used to be mixed with petrol and diesel."Earlier, traders used to request NOC to supply more kerosene but now the demand has dramatically dropped after the price of kerosene and diesel became equal," said an NOC official.
The government has banned turpentine but it is still found in abundance in petrol. However, the equal pricing of kerosene and diesel has made it difficult for traders to adulterate petrol. Some petrol pumps still sell turpentine-mixed petrol to make big money, said the pump owner on condition of anonymity.
"NOC has taken global cues and slashed fuel prices thrice in succession. The price of diesel and kerosene was equalised on October 25 to control adulteration and NOC's drive in this regard has been successful," spokesperson Dhungel said.
The state oil monopoly Nepal Oil Corporation (NOC) has lived up to its promise and slashed retail prices of petrol, diesel and kerosene thrice since October 25. This December, it fixed the price of kerosene at Rs 60.50 per litre which is on par with diesel. After NOC equalised the prices of diesel and kerosene, the sales of kerosene drastically dropped.
In early winter (Mangsir) last year, the sales of kerosene was 13,668 kilolitres (kl) and a year before that was 18,167 kl, However, this winter saw a whopping fall in the sales - just 5,128 kl."The almost 62 per cent drop in sales is really astounding," said NOC spokesperson Mukund Dhungel. Due to the huge difference in figures, NOC also has no accurate estimate of the real demand of kerosene, he added.
"Petroleum dealers are aware of the adulteration," a petrol pump owner said while admitting some 'unscrupulous traders' were making huge money.
According to him, normally turpentine - a liquid chemical used in painting - is mixed with petrol while earlier kerosene - then a cheaper fuel - used to be mixed with petrol and diesel."Earlier, traders used to request NOC to supply more kerosene but now the demand has dramatically dropped after the price of kerosene and diesel became equal," said an NOC official.
The government has banned turpentine but it is still found in abundance in petrol. However, the equal pricing of kerosene and diesel has made it difficult for traders to adulterate petrol. Some petrol pumps still sell turpentine-mixed petrol to make big money, said the pump owner on condition of anonymity.
"NOC has taken global cues and slashed fuel prices thrice in succession. The price of diesel and kerosene was equalised on October 25 to control adulteration and NOC's drive in this regard has been successful," spokesperson Dhungel said.
Tuesday, December 16, 2008
Remittance pinch to global meltdown blues
Malaysia not hiring, Qatar bent on firing
The cascading effect of global recession is finally going to hit the local home and hearth.
Remittance - one of the major pile-drivers of the economy - is feeling the pinch, thanks to the drastic cut and freeze in recruitment migrant Nepali workers in Qatar and Malaysia. While, the Gulf nation is the most favoured destination for Nepali workforce, the Southeast Asian country comes a close second. The figures tell a stark tale. Of the total foreign workforce in Malaysia, Nepalis comprise a resounding 25 per cent. Altogether, there are 2.1 million foreign workers in Malaysia, of which 0.4 million are Nepalis.
The overwhelming growth will be stunted, albeit temporarily, since Malaysia has imposed a freeze on recruitment for migrant workers to weather the meltdown blues. Also, the Malaysian authorities have taken the step to tide over the domestic unemployment crisis, according the official news agency Bernama that has quoted a senior official.
Datuk Ismail Abdul Rahim, director-general, labour department of Malaysia, told the news agency that the cut was a Human Resource Ministry's decision to give fillip to local employment.
Naturally, Malaysian trade unions have welcomed the move, going a step forward to suggest that contracts of migrants shouldn't be renewed.
The development spells bad news back home as it will put paid to thousands of prospective job-seekers' hopes.
Of the total global remittance, Saudi Arabia tops the list, followed by Qatar and Malaysia.
At a conservative estimate, 1.24 million Nepalis are working abroad.
This, however, doesn't include India, according to Yubraj Pandey, labour secretary. But, the largest number of Nepalis is believed to be working in neighbouring India.
"The figure could be six times higher than the compatriots working in others parts of the globe. Unfortunately, the data isn't available due to our open border with India," explained Pandey.
The labour secretary had an interesting statistics up his sleeve to drive home Nepalis' love for chasing the foreign dream.
"Data reveals that 656 Nepalis leave for various destinations daily in search of greener pastures. Among them, 20 are women," added the senior official.
Lekhraj Bhatta, Minister for Labour and Transport Management, had a word of caution for remittance-dependent families in these recessionary times. People should hold on to their capital rather than going on a buying spree of house, land and luxurious goods as often is the case.
The total contribution of remittance to the Gross Domestic Product (GDP) is pegged at an impressive 17.4 per cent, according to central bank.
CHASING THE FOREIGN DREAM
Total no of migrant workers (excluding India): 1.24 million
Total no of migrant workers in Malaysia: more than 0.4 million
Total no of migrant workers' on the move daily: 656 (including 20 women)
Total contribution of remittance to GDP: 17.4%
The cascading effect of global recession is finally going to hit the local home and hearth.
Remittance - one of the major pile-drivers of the economy - is feeling the pinch, thanks to the drastic cut and freeze in recruitment migrant Nepali workers in Qatar and Malaysia. While, the Gulf nation is the most favoured destination for Nepali workforce, the Southeast Asian country comes a close second. The figures tell a stark tale. Of the total foreign workforce in Malaysia, Nepalis comprise a resounding 25 per cent. Altogether, there are 2.1 million foreign workers in Malaysia, of which 0.4 million are Nepalis.
The overwhelming growth will be stunted, albeit temporarily, since Malaysia has imposed a freeze on recruitment for migrant workers to weather the meltdown blues. Also, the Malaysian authorities have taken the step to tide over the domestic unemployment crisis, according the official news agency Bernama that has quoted a senior official.
Datuk Ismail Abdul Rahim, director-general, labour department of Malaysia, told the news agency that the cut was a Human Resource Ministry's decision to give fillip to local employment.
Naturally, Malaysian trade unions have welcomed the move, going a step forward to suggest that contracts of migrants shouldn't be renewed.
The development spells bad news back home as it will put paid to thousands of prospective job-seekers' hopes.
Of the total global remittance, Saudi Arabia tops the list, followed by Qatar and Malaysia.
At a conservative estimate, 1.24 million Nepalis are working abroad.
This, however, doesn't include India, according to Yubraj Pandey, labour secretary. But, the largest number of Nepalis is believed to be working in neighbouring India.
"The figure could be six times higher than the compatriots working in others parts of the globe. Unfortunately, the data isn't available due to our open border with India," explained Pandey.
The labour secretary had an interesting statistics up his sleeve to drive home Nepalis' love for chasing the foreign dream.
"Data reveals that 656 Nepalis leave for various destinations daily in search of greener pastures. Among them, 20 are women," added the senior official.
Lekhraj Bhatta, Minister for Labour and Transport Management, had a word of caution for remittance-dependent families in these recessionary times. People should hold on to their capital rather than going on a buying spree of house, land and luxurious goods as often is the case.
The total contribution of remittance to the Gross Domestic Product (GDP) is pegged at an impressive 17.4 per cent, according to central bank.
CHASING THE FOREIGN DREAM
Total no of migrant workers (excluding India): 1.24 million
Total no of migrant workers in Malaysia: more than 0.4 million
Total no of migrant workers' on the move daily: 656 (including 20 women)
Total contribution of remittance to GDP: 17.4%
Dr Bhattarai's sermon to senior officials
Finance Minister Dr Baburam Bhattarai today directed secretaries to be more result-oriented than process-oriented. "Bureaucracy should change its old mind-set and be more result-oriented," he said directing the secretaries today.
The first finance minister of the Democratic Republic of Nepal Bhattaria also requested the senior officials to complete the stipulated works within the set time frame for the better service delivery.
Though revenue collection -- that exceeding the target -- is satisfactory, the development expenditure is negligible, he reminded the bureaucrats. Out of the total expenditure, only Rs 47 billion -- that is only 22 per cent of the total allocation -- has been spent.
"The budget itself was announced late and if we donot seriously maintain the time frame, the allocated development expenditure would be wasted," one of the chief ideologues of the Maoist party that is leading the country said, adding that the budgetary allocation cannot be changed. He also showed dissatisfaction over the delay in passing the programmes from National Planning Commission. "The programmes should have been passed within October," the rebel-turned-minister said.
The finance secretary (revenue) Krishnahari Baskota presented the progress report of four government corporations -- Hetauda Kapada Uddhyog, Gorakhkali Rabar Udhyog, Biratnagar Jute Mill and Krishi Aujar Karkhana -- as the budget had planned to revamp them. He also apprised the meeting -- that will continue on Thursday also -- of Rs 500 million Self-Employment Programme and the finance ministry's take on proposed Infrastructure Development Bank.
Bhatta for law amendment
KATHMANDU: Lekhraj Bhatta, minister for Labour and Transport Management, speaking at a press meet organised by the ministry and Safe Migration on the occasion of 18th International Migration Day here today said the ministry was planning to amend the existing laws and regulations to utilize the remittance and curb the malpractices and fraudulent activities in the foreign employment. He also informed that a taskforce was being formed to effectively implement 10 per cent reservation scheme for the oppressed, suppressed, conflict victims and people from remote areas for the foreign employment. Although there is growing demand of women workers in international market, the government has banned them going to Malaysia and Saudi Arab, according to the National Network for Migration. "However, it is against the Foreign Employment Act- 2064 BS," they said. Bhatta said that tussle between industrialists and labour is evident but it should be resolved through dialogue. "Government is doing its best to help operate industries smoothly," he added.
The first finance minister of the Democratic Republic of Nepal Bhattaria also requested the senior officials to complete the stipulated works within the set time frame for the better service delivery.
Though revenue collection -- that exceeding the target -- is satisfactory, the development expenditure is negligible, he reminded the bureaucrats. Out of the total expenditure, only Rs 47 billion -- that is only 22 per cent of the total allocation -- has been spent.
"The budget itself was announced late and if we donot seriously maintain the time frame, the allocated development expenditure would be wasted," one of the chief ideologues of the Maoist party that is leading the country said, adding that the budgetary allocation cannot be changed. He also showed dissatisfaction over the delay in passing the programmes from National Planning Commission. "The programmes should have been passed within October," the rebel-turned-minister said.
The finance secretary (revenue) Krishnahari Baskota presented the progress report of four government corporations -- Hetauda Kapada Uddhyog, Gorakhkali Rabar Udhyog, Biratnagar Jute Mill and Krishi Aujar Karkhana -- as the budget had planned to revamp them. He also apprised the meeting -- that will continue on Thursday also -- of Rs 500 million Self-Employment Programme and the finance ministry's take on proposed Infrastructure Development Bank.
Bhatta for law amendment
KATHMANDU: Lekhraj Bhatta, minister for Labour and Transport Management, speaking at a press meet organised by the ministry and Safe Migration on the occasion of 18th International Migration Day here today said the ministry was planning to amend the existing laws and regulations to utilize the remittance and curb the malpractices and fraudulent activities in the foreign employment. He also informed that a taskforce was being formed to effectively implement 10 per cent reservation scheme for the oppressed, suppressed, conflict victims and people from remote areas for the foreign employment. Although there is growing demand of women workers in international market, the government has banned them going to Malaysia and Saudi Arab, according to the National Network for Migration. "However, it is against the Foreign Employment Act- 2064 BS," they said. Bhatta said that tussle between industrialists and labour is evident but it should be resolved through dialogue. "Government is doing its best to help operate industries smoothly," he added.
Transporters agree to reduce fare
Nepal National Transport Entrepreneurs Supreme Federation (NNTESF) -- one of the two bodies of transport entrepreneurs -- has agreed to cut transport fare according to the government's recent decision.
Bishnu Siwakoti, president of NNTESF confirmed that they are ready to reduce the fare according to the government decision. "We are entrepreneurs 'not frauds' and honour government's decision," he replied. Consumers' Forum and Students unions are blaming the transporters that they are 'frauds' because they are not willing to reduce the fare even after the petro-prices came down thrice.
"The federation has, but, asked the government to form a scientific system of fixing fare at the earliest possible," he said adding that government should take stern action against those entrepreneurs, who donot reduce fare.
Ministry of Labour and Transport Management (MoLTM) has reduced the transportation fair for the second time by three per cent in petrol-operated vehicles and six per cent in diesel-operated ones.However, the earlier decision of fare reduction -- by six per cent in diesel operated vehicles and seven per cent in petrol-operated ones -- has not yet been implemented, making it to a total reduction of aggregated 10 per cent in petrol-run vehicles and 12 per cent in diesel-run ones.
This is the 'huge failure' of the Maoist-led government on its part that the transport entrepreneurs are challenging its decision that directly hits the common people.However, Lekhraj Bhatta, Minister for Labour and Transport Management is optimistic. "We are taking action against those, who do not implement the new fare structure," he said today. But in the last 15 days, Department of Transport Management has taken action against around a half dozen taxis to show that it is working.
Taking the global cue, the state oil monopoly -- Nepal Oil Corporation (NOC) -- has slashed fuel prices thrice since October 25. But the transport operators have refused to cut fares, accordingly.
There is also a section under the department where people can register their complaints, if public vehicles charge them more. "But public transporters are still charging commuters old rates," complained Raju Bajagai, a student, who is not satisfied with the students unions also."The unions burn tyres and call for chakka jam for petty reasons," he said adding that its a serious matter and nobody seems to bother."
The transport entrepreneurs are more powerful than the ministry," said one official at the ministry without being quoted. "Such is their stranglehold that entrepreneurs arbitrarily hike the fare. They never feel the urge to consult the department," he added. "But they donot reduce even after government reduce the fare."
If the transport fares will not go down, the spiralling inflation -- that is hovering above 14.5 per cent, according to the Nepal Rastra Bank's (NRB) this fiscal year's fourth month data -- has very slim chance to come down.
The transport ministry and department for reasons best known to it has failed to implement its own decision. And the Consumers' Forum is preparing to knock the door of the court for the implementation of government's decision.
Bishnu Siwakoti, president of NNTESF confirmed that they are ready to reduce the fare according to the government decision. "We are entrepreneurs 'not frauds' and honour government's decision," he replied. Consumers' Forum and Students unions are blaming the transporters that they are 'frauds' because they are not willing to reduce the fare even after the petro-prices came down thrice.
"The federation has, but, asked the government to form a scientific system of fixing fare at the earliest possible," he said adding that government should take stern action against those entrepreneurs, who donot reduce fare.
Ministry of Labour and Transport Management (MoLTM) has reduced the transportation fair for the second time by three per cent in petrol-operated vehicles and six per cent in diesel-operated ones.However, the earlier decision of fare reduction -- by six per cent in diesel operated vehicles and seven per cent in petrol-operated ones -- has not yet been implemented, making it to a total reduction of aggregated 10 per cent in petrol-run vehicles and 12 per cent in diesel-run ones.
This is the 'huge failure' of the Maoist-led government on its part that the transport entrepreneurs are challenging its decision that directly hits the common people.However, Lekhraj Bhatta, Minister for Labour and Transport Management is optimistic. "We are taking action against those, who do not implement the new fare structure," he said today. But in the last 15 days, Department of Transport Management has taken action against around a half dozen taxis to show that it is working.
Taking the global cue, the state oil monopoly -- Nepal Oil Corporation (NOC) -- has slashed fuel prices thrice since October 25. But the transport operators have refused to cut fares, accordingly.
There is also a section under the department where people can register their complaints, if public vehicles charge them more. "But public transporters are still charging commuters old rates," complained Raju Bajagai, a student, who is not satisfied with the students unions also."The unions burn tyres and call for chakka jam for petty reasons," he said adding that its a serious matter and nobody seems to bother."
The transport entrepreneurs are more powerful than the ministry," said one official at the ministry without being quoted. "Such is their stranglehold that entrepreneurs arbitrarily hike the fare. They never feel the urge to consult the department," he added. "But they donot reduce even after government reduce the fare."
If the transport fares will not go down, the spiralling inflation -- that is hovering above 14.5 per cent, according to the Nepal Rastra Bank's (NRB) this fiscal year's fourth month data -- has very slim chance to come down.
The transport ministry and department for reasons best known to it has failed to implement its own decision. And the Consumers' Forum is preparing to knock the door of the court for the implementation of government's decision.
Monday, December 15, 2008
Crisis to hit remittance slowly but surely
International Monetary Fund (IMF) believes that remittance earnings could be hit by recent global recession. While despite dependence on remittances Nepal won't feel the heat so soon yet the recession will take its toll as Nepalis working in various countries - especially Gulf countries - will be forced to return, opined experts.
"Nobody can remain unaffected by such a global crisis," said Prof Dr Bishwambher Pyakurel, an eminent economist addressing a programme on 'Global Economic Recession: Impacts on Remmittance' organised by Nepal Remitters' Association (NRA) here today.
"Every dollar remitted will generate economic activities worth $3 in the receiving country," he said adding, "Remittance in the most of the developing countries exceeds international aid."
Empirical findings also show significant correlations of economic variables and remittances, implying the fact that long-term economic growth is occuring as remittance increases within developing countries. "Gulf countries have started feeling the heat, and that substantially hurts Nepali remittance," he added.
According to Badri Pandey, member Non-Resident Nepali (NRN) co-ordination committee in The Gulf countries, "Big real estate companies in Gulf countries are slowly reducing the workforce as their business -- hit by global crisis -- have gone down by 40 to 50 per cent in recent days." Around 90 per cent of out-sourced Nepalis work in construction sector in Gulf countries.
According to Nepal Rastra Bank (NRB) data, during the fiscal year 2007-08 of the total remittance generating countries, Qatar ranked first followed by Malaysia, UAE and Saudi Arabia.Since 2000, the real estate business started booming in Gulf countries making these lucrative destinations for Nepali migrant workers. There are around one million Nepalis in Gulf countries, at present. "Once the workers start returning, the remittance will come down," he added. The figure will be reflected in next month's report, he said.
NRB acting governor Krishna Bahadur Manandhar agreed, saying, "The report of the fourth month of the current fiscal year shows decline in remittance though in the first three months remittance had gone up by 80 per cent in comparison to the same period last fiscal."
Manandhar said that it was due to Dashain festival in Ashwin - the third month - of this fiscal year adding that last year Dashain fell in the fourth month - Kartik. "This fiscal's fourth month's data shows the remittance has gone down by 40 per cent in comparison to last year," he said and pointed out that while there would be no dramatic impact of the recession, still the impact on the Nepali economy would be mild and slow.
According to IMF, Remittances remain the primary source of foreign exchange and they have been growing very rapidly. What we expect is there will be slowdown of that growth rate and if it occurs, it will take place over several years. The present global crisis will have mild and slow impact on the economy as Nepal's macroeconomic fuindamentals are considered to be better suited to external shocks.
Dipendra Bahadur Chhetri, former member of National Planning Commission, and Chandra Prasad Dhakal, president of Nepal Remitters' Association, also highlighted the impacts of decline in remmittance and its effect on the economy.
The decline in remittance will reduce spending on basic necessities such as food, electricity, medicine, school fees, oil products and others, leading to decline in demand, they said.NT
"Nobody can remain unaffected by such a global crisis," said Prof Dr Bishwambher Pyakurel, an eminent economist addressing a programme on 'Global Economic Recession: Impacts on Remmittance' organised by Nepal Remitters' Association (NRA) here today.
"Every dollar remitted will generate economic activities worth $3 in the receiving country," he said adding, "Remittance in the most of the developing countries exceeds international aid."
Empirical findings also show significant correlations of economic variables and remittances, implying the fact that long-term economic growth is occuring as remittance increases within developing countries. "Gulf countries have started feeling the heat, and that substantially hurts Nepali remittance," he added.
According to Badri Pandey, member Non-Resident Nepali (NRN) co-ordination committee in The Gulf countries, "Big real estate companies in Gulf countries are slowly reducing the workforce as their business -- hit by global crisis -- have gone down by 40 to 50 per cent in recent days." Around 90 per cent of out-sourced Nepalis work in construction sector in Gulf countries.
According to Nepal Rastra Bank (NRB) data, during the fiscal year 2007-08 of the total remittance generating countries, Qatar ranked first followed by Malaysia, UAE and Saudi Arabia.Since 2000, the real estate business started booming in Gulf countries making these lucrative destinations for Nepali migrant workers. There are around one million Nepalis in Gulf countries, at present. "Once the workers start returning, the remittance will come down," he added. The figure will be reflected in next month's report, he said.
NRB acting governor Krishna Bahadur Manandhar agreed, saying, "The report of the fourth month of the current fiscal year shows decline in remittance though in the first three months remittance had gone up by 80 per cent in comparison to the same period last fiscal."
Manandhar said that it was due to Dashain festival in Ashwin - the third month - of this fiscal year adding that last year Dashain fell in the fourth month - Kartik. "This fiscal's fourth month's data shows the remittance has gone down by 40 per cent in comparison to last year," he said and pointed out that while there would be no dramatic impact of the recession, still the impact on the Nepali economy would be mild and slow.
According to IMF, Remittances remain the primary source of foreign exchange and they have been growing very rapidly. What we expect is there will be slowdown of that growth rate and if it occurs, it will take place over several years. The present global crisis will have mild and slow impact on the economy as Nepal's macroeconomic fuindamentals are considered to be better suited to external shocks.
Dipendra Bahadur Chhetri, former member of National Planning Commission, and Chandra Prasad Dhakal, president of Nepal Remitters' Association, also highlighted the impacts of decline in remmittance and its effect on the economy.
The decline in remittance will reduce spending on basic necessities such as food, electricity, medicine, school fees, oil products and others, leading to decline in demand, they said.NT
Sunday, December 14, 2008
Minister's sermon to guard against flight of capital
The Maoist-led government plans to come down heavily on militant trade unionism, which is having an adverse impact on the industries.
"If there is regular disturbance in the industrial sector, then there will be a flight of capital soon," Lekhraj Bhatta, Minister for Labour and Transport Management, said here today. "The government is mulling over banning strikes. Talks are the best way to resolve any forms of dispute," he said.
According to the minister, hectic parleys are on to reopen the padlocked industries. Bhatta's potion for stir-happy unions: The bodies should inform the companies a good 12 hours in advance before they announce unilateral closure.
Some three dozen industries in the Birgunj-Pathlaiya trade corridor are closed since last week. The ongoing strike is a fall out over the vexed minimum wage issue. The government has hiked it from Rs 3,300 to Rs 4,600 (Rs 3,050 as basic salary and Rs 1,550 as dearness allowance).
The government-affiliated trade unions, including the ruling Maoists' body, have ensured the closure. They are demanding an across-the-board increase in monthly salary for all workers, irrespective of their wages and designations, flouting the government order.
The industrialists have been crying foul of the unions' move, dubbing it 'illegitimate'. But, the stir-hardened unions are firmly standing their ground.
They claim that the agreement inked between the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and various union bodies is inadvertently got distorted in the official Gazette.
Though, there seems to be no confusion over the basic salary figure, problem persists as far as dearness allowance and allowance are concerned.
The unions maintain that the Gazette states 'salary and allowances will be adjusted' -- instead of salary and dearness allowance -- hiked only after January 15, 2008, as agreed by the two parties on November 30.
Seven trade unions including Maoists-affiliated All Nepal Federation of Trade Union, UML's GEFONT, NC-affiliated Nepal Trade Union Congress today issued a release, stating that the confusion over the dearness allowance is on thanks to 'distortion' in the Gazette. "It is hampering industrial environment," stated the release. They urged the government to rectify the anomalies at the earliest to ensure industrial growth and output.
Transport fare to go down
KATHMANDU: Minister for Labour and Transport Management Lekhraj Bhatta has promised to reduced transport fares by seven to 10 per cent in a couple of days. But the pledge rings hollow in the light of his inability to implement the revised fare-structure deal that he had sealed with transport entrepreneurs. At that point, the fares were slashed by six per cent in diesel-run vehicles and seven per cent in petrol-operated ones. "This time round, those who are found guilty of flouting the government's directive will be hauled up. Their route permit will be cancelled," he threatened. But private transport operators are in no mood to relent. They are arbitrarily charging the commuters despite the cut in fuel prices by Nepal Oil Corporation (NOC) as many as three times.
"If there is regular disturbance in the industrial sector, then there will be a flight of capital soon," Lekhraj Bhatta, Minister for Labour and Transport Management, said here today. "The government is mulling over banning strikes. Talks are the best way to resolve any forms of dispute," he said.
According to the minister, hectic parleys are on to reopen the padlocked industries. Bhatta's potion for stir-happy unions: The bodies should inform the companies a good 12 hours in advance before they announce unilateral closure.
Some three dozen industries in the Birgunj-Pathlaiya trade corridor are closed since last week. The ongoing strike is a fall out over the vexed minimum wage issue. The government has hiked it from Rs 3,300 to Rs 4,600 (Rs 3,050 as basic salary and Rs 1,550 as dearness allowance).
The government-affiliated trade unions, including the ruling Maoists' body, have ensured the closure. They are demanding an across-the-board increase in monthly salary for all workers, irrespective of their wages and designations, flouting the government order.
The industrialists have been crying foul of the unions' move, dubbing it 'illegitimate'. But, the stir-hardened unions are firmly standing their ground.
They claim that the agreement inked between the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and various union bodies is inadvertently got distorted in the official Gazette.
Though, there seems to be no confusion over the basic salary figure, problem persists as far as dearness allowance and allowance are concerned.
The unions maintain that the Gazette states 'salary and allowances will be adjusted' -- instead of salary and dearness allowance -- hiked only after January 15, 2008, as agreed by the two parties on November 30.
Seven trade unions including Maoists-affiliated All Nepal Federation of Trade Union, UML's GEFONT, NC-affiliated Nepal Trade Union Congress today issued a release, stating that the confusion over the dearness allowance is on thanks to 'distortion' in the Gazette. "It is hampering industrial environment," stated the release. They urged the government to rectify the anomalies at the earliest to ensure industrial growth and output.
Transport fare to go down
KATHMANDU: Minister for Labour and Transport Management Lekhraj Bhatta has promised to reduced transport fares by seven to 10 per cent in a couple of days. But the pledge rings hollow in the light of his inability to implement the revised fare-structure deal that he had sealed with transport entrepreneurs. At that point, the fares were slashed by six per cent in diesel-run vehicles and seven per cent in petrol-operated ones. "This time round, those who are found guilty of flouting the government's directive will be hauled up. Their route permit will be cancelled," he threatened. But private transport operators are in no mood to relent. They are arbitrarily charging the commuters despite the cut in fuel prices by Nepal Oil Corporation (NOC) as many as three times.
Prices in the Valley spiral alarmingly, inflation at 14.5pc
Kathmandu valley is becoming more expensive by the day to live in. However, while it might seem that life in the capital is more expensive than in other parts of the country regionwise prices in Kathmandu Valley increased less than those in the Tarai region last year in the first four months, according to Nepal Rastra Bank.
Inflation here has increased by 16.8 per cent, the highest among hills and Tarai, said a report of this fiscal year's first four months by the Nepal Rastra Bank (NRB). Indeed, there seems no end to the price hike in the Valley in the near future as prices go on skyrocketing. Living in Tarai, however, is cheaper than living in the hills or Kathmandu Valley. The hills registered a 14.2 per cent and the Tarai registered a 13.3 per cent price rise during the period.
"Last year, the price rise in the Tarai, hills and Kathmandu Valley was 6.6, 5.7 and 6.1 per cent respectively," said the NRB report.
The price of food and beverages increased by more than double to 17 per cent, from 8.4 per cent in the same period last year. Non-food and service sectors' price increased by almost by triple, to 11.7 per cent from 4.1 per cent in the first four months of the last fiscal year pushing the year-on-year inflation to 14.5 per cent against 6.3 per cent in the same period last year.
The central bank's figure is a challenge to the bank itself as it had, in its monetary policy for 2008-09, vowed to bring inflation down to 7.5 per cent.
"Assuming no further adjustment in the petroleum products' prices takes place, the annual average consumer inflation is projected to moderate at 7.5 per cent," the Monetary Policy had said. While the price of petroleum products has been brought down by the end of fourth month of this fiscal year, yet inflation stands at 14.5 per cent.
While the price of sugar and sugar-related products increased by more than double, with prices shooting up by 37.6 per cent as against 18 per cent in the same period last year, almost all food items' and products' prices witnessed more than a double and even triple price hike.
Inflation in Nepal is directly related to India where it has come down but is on the rise here, which is alarming.
"It's too early to say that the government has failed to control the price hike, but the situation is alarming," said Dr Shanker Sharma, former vice-president of National Planning Commission. "The government should be cautious and take measures to control inflation," he suggested.
The Maoist-led government came to power on August 18 - exactly a month after the first month of this fiscal year. With every other month of this fiscal year, price rise has been steady. Despite the whopping price hike, salary and wages have not increased accordingly. Salary and wages increased by just 10 per cent against a rise of 10.1 per cent in the same period last fiscal year.
Inflation here has increased by 16.8 per cent, the highest among hills and Tarai, said a report of this fiscal year's first four months by the Nepal Rastra Bank (NRB). Indeed, there seems no end to the price hike in the Valley in the near future as prices go on skyrocketing. Living in Tarai, however, is cheaper than living in the hills or Kathmandu Valley. The hills registered a 14.2 per cent and the Tarai registered a 13.3 per cent price rise during the period.
"Last year, the price rise in the Tarai, hills and Kathmandu Valley was 6.6, 5.7 and 6.1 per cent respectively," said the NRB report.
The price of food and beverages increased by more than double to 17 per cent, from 8.4 per cent in the same period last year. Non-food and service sectors' price increased by almost by triple, to 11.7 per cent from 4.1 per cent in the first four months of the last fiscal year pushing the year-on-year inflation to 14.5 per cent against 6.3 per cent in the same period last year.
The central bank's figure is a challenge to the bank itself as it had, in its monetary policy for 2008-09, vowed to bring inflation down to 7.5 per cent.
"Assuming no further adjustment in the petroleum products' prices takes place, the annual average consumer inflation is projected to moderate at 7.5 per cent," the Monetary Policy had said. While the price of petroleum products has been brought down by the end of fourth month of this fiscal year, yet inflation stands at 14.5 per cent.
While the price of sugar and sugar-related products increased by more than double, with prices shooting up by 37.6 per cent as against 18 per cent in the same period last year, almost all food items' and products' prices witnessed more than a double and even triple price hike.
Inflation in Nepal is directly related to India where it has come down but is on the rise here, which is alarming.
"It's too early to say that the government has failed to control the price hike, but the situation is alarming," said Dr Shanker Sharma, former vice-president of National Planning Commission. "The government should be cautious and take measures to control inflation," he suggested.
The Maoist-led government came to power on August 18 - exactly a month after the first month of this fiscal year. With every other month of this fiscal year, price rise has been steady. Despite the whopping price hike, salary and wages have not increased accordingly. Salary and wages increased by just 10 per cent against a rise of 10.1 per cent in the same period last fiscal year.
Saturday, December 13, 2008
Market prods lose steam
The popular belief that Group-A companies dominate domestic secondary market was challenged this week. These companies lost lustre. The contribution of Group-A companies to the total trading dropped to 39.87 per cent this week against last week's 73.17 per cent.However, the total transaction increased by 0.87 per cent to Rs 446.37 million against last week's transaction. A total of 84 companies' scrips were traded at the secondary market this week.
Group-A has 74 companies' -- all market propellers. With the fall in their transaction, they pulled down the total Nepal Stock Exchange (Nepse) index by 11.66 points to dip to 743.25 points this week from last week's closing of 754.91 points. Sensitive index -- a barometer of the group-A companies -- also dropped, albeit by just 1.20 points to dip to 195.47 points. Similarly, the float index - calculated on the basis of real transactions - lost 1.01 points to go to 72.16 points.
This week, commercial banks, hydropower and insurance companies -- the key market propellers -- respectively lost 16.65 points to reach 725.20 points, 26.69 points to reach 923.54 points and 8.47 points to reach 751.22 points. However, the sharholders of development banks, and finance company groups gained this week as the development bank and finance company group index gained by 3.26 points to go up to 1140.54 points and 12.96 points to go up to 993.73 points, respectively.
Shareholders of National Hydropower Company this week gained the most as in terms of monetary value, National Hydropower Company (with Rs 44.11 million), Nepal Bangladesh Bank (with Rs 40.03 million), Butwal Power Company (with Rs 37.01 million), Siddhartha Bank (with Rs 27.96 million) and Nepal Credit and Commerce Bank (with Rs 26.70 million) were top scorers.
The market wound up in negative territory for three days in its four-day session this week Tuesday was a public holiday. The market opened in the red on Sunday and lost 0.62 points to go down to 754.29 points. On Monday, it further lost 6.57 points to slip to 747.72 points. Nepse lost 5.36 points on Wednesday to slump to 742.36 points. However, on Thursday, the last day of the trading in the domestic market, it gained 0.89 points to close at 743.25 points.
In terms of numbers of share units traded, National Hydropower Company topped the chart with 3,06000-unit shares while in terms of number of transactions Biratlaxmi Bikas Bank topped the chart with 811 transactions.
Nepse also published the base price of companies for brokers and investors as there was confusion on how to calculate the capital gain tax. Now, capital gain tax will be calculated on base price published by Nepse, according to the Finance Ministry's recent decision.
Thursday, December 11, 2008
Big industrial houses in eye of minimum wage storm
Militant trade unions are holding the nascent industries to ransom. Contrary to the government's tall talks on investor-friendly moves, the situation on the ground reveals a disturbing picture, especially on the Birgunj-Parsa corridor in the Tarai, where lots of industries are sufering the frequent labour disputes.
Unions have closed down at least two dozen industries, including Surya Nepal Pvt Ltd, a multinational company (MNC), today. The demand: salary hike for all employees. The result: the state exchequer is being deprived of millions daily. And leading the anti-industry assault is none other than the Maoist-affiliated All Nepal Trade Union Federation (ANTUF).
The industrialists are pleading helplessness in the face of unions' sponsored stir. The demand, insist business houses, are illegal since the workers are being paid in accordance with the minimum salary slab fixed by the government.
"We have agreed to comply with the minimum wage of Rs 4,600. Earlier, it used to be Rs 3,300. But, all the workers are demanding a similar raise, which is simply unacceptable," said Sanjeeva Keshava, chief executive officer, Surya Nepal Pvt Ltd. "The flat raise of Rs 1,300 to all is what they are demanding."
Badri Bajagain, vice-president, ANTUF, rubbished the charges. "We want a minimum salary fixed by the government, which has the following components; basic salary Rs 3,050 and Rs 1,550 dearness allowance that adds up to a consolidated sum of Rs 4,600," maintained Bajagain.
"We aren't targeting all and sundry. Of the 350 medium and large scale industries in the corridor, 70 per cent have fallen in line with our demand," he said. He also alleged that some big industrial houses are still getting away by paying Rs 2,200 as basic salary.
"It is in clear violation of the agreement reached on November 30. Federation of Nepalese Chambers of Commerce and Industry (FNCCI), an umbrella organisation of Nepali private sector, and representatives of six trade unions were party to that accord. As per the agreement, if any company has hiked salaries of late, then it will be adjusted in line with the present accord," added Bajagain.
Interestingly, the accord doesn't specify about the hike earmarked for higher salary holders.
"We have shut down all those companies, which refused to implement the agreement," said Dinesh Rai, central member, GEFONT, UML-affiliated union. He is also the president of Nepal Independent Workers' Union (NIWU).
Bishnu Rimal, vice-president, GEFONT, tried to deflect his union's involvement in the ongoing stir. "We have urged them to hold talks and come to an amicable settlement," reasoned Rimal.
Meanwhile, Nepali Congress-affiliated Nepal Trade Union Congress has also thrown its lot behind the rival bodies.
Unions have closed down at least two dozen industries, including Surya Nepal Pvt Ltd, a multinational company (MNC), today. The demand: salary hike for all employees. The result: the state exchequer is being deprived of millions daily. And leading the anti-industry assault is none other than the Maoist-affiliated All Nepal Trade Union Federation (ANTUF).
The industrialists are pleading helplessness in the face of unions' sponsored stir. The demand, insist business houses, are illegal since the workers are being paid in accordance with the minimum salary slab fixed by the government.
"We have agreed to comply with the minimum wage of Rs 4,600. Earlier, it used to be Rs 3,300. But, all the workers are demanding a similar raise, which is simply unacceptable," said Sanjeeva Keshava, chief executive officer, Surya Nepal Pvt Ltd. "The flat raise of Rs 1,300 to all is what they are demanding."
Badri Bajagain, vice-president, ANTUF, rubbished the charges. "We want a minimum salary fixed by the government, which has the following components; basic salary Rs 3,050 and Rs 1,550 dearness allowance that adds up to a consolidated sum of Rs 4,600," maintained Bajagain.
"We aren't targeting all and sundry. Of the 350 medium and large scale industries in the corridor, 70 per cent have fallen in line with our demand," he said. He also alleged that some big industrial houses are still getting away by paying Rs 2,200 as basic salary.
"It is in clear violation of the agreement reached on November 30. Federation of Nepalese Chambers of Commerce and Industry (FNCCI), an umbrella organisation of Nepali private sector, and representatives of six trade unions were party to that accord. As per the agreement, if any company has hiked salaries of late, then it will be adjusted in line with the present accord," added Bajagain.
Interestingly, the accord doesn't specify about the hike earmarked for higher salary holders.
"We have shut down all those companies, which refused to implement the agreement," said Dinesh Rai, central member, GEFONT, UML-affiliated union. He is also the president of Nepal Independent Workers' Union (NIWU).
Bishnu Rimal, vice-president, GEFONT, tried to deflect his union's involvement in the ongoing stir. "We have urged them to hold talks and come to an amicable settlement," reasoned Rimal.
Meanwhile, Nepali Congress-affiliated Nepal Trade Union Congress has also thrown its lot behind the rival bodies.
Global crisis may hit Nepal, warns expert
With the global financial crisis having gripped the world by the short hairs, shortfall in remittance, dwindling budgetary support, real estate downturn and financial institution failures arising from a lack of the regulatory authority's timely intervention may lead to a crisis in Nepal.
According to an expert, "Innovative measures to combat financial institution failure may help insulate Nepal from the global financial crisis." "Over exposure of financial institutions to the real estate sector that has seen a 500 per cent rise in the last five years despite no new economic activities is an odd phenomenon," said Ravi Kumar Swami, a cost consultant and chartered accountant from India.
Though Nepal Ratra Bank has put a 10 per cent cap on the total loan portfolio of any bank, it still is huge in the context of Nepal, he said adding that the size of economy determines how resilient a country is. "Nepal also might feel the heat of the global financial crisis as Asia and particularly South Asia has started feeling it," he added.
According to a new report from Asian Development Bank (ADB), economic growth in developing Asia will slow to 5.8 per cent in 2009, down from a likely 6.9 per cent this year and nine per cent in 2007, as the impact of the global financial crisis spreads to emerging markets.
With the global economy facing a major downturn, the region's economic resilience will be tested by weakening exports and a sharp slowdown of private capital flows, according to the December issue of Asia Economic Monitor (AEM).
"The year 2009 is likely to be a difficult one for developing Asia but it will be manageable if countries respond decisively and collectively," Jong-Wha Lee, head of ADB's Office of Regional Economic Integration (OREI), said adding that swift action by policymakers to stem both the threat to the financial systems and the real economy would allow most of the region's economies to sustain a healthy if slower expansion.
AEM also recommends the region's authorities continue to improve regulation and overseeing of financial systems to strengthen transparency and accountability; enhance sound regulation and prudent overseeing; mitigate the procyclicality of financial markets; broaden and deepen financial markets to enhance resilience and reinforce cross-border cooperation.
According to a special note, "Developing Asia's Prospects in the Global Slowdown," also released by ADB today, South Asia is likely to reach 6.8 per cent growth this year and 6.1 per cent in 2009, down from 8.6 per cent in 2007.
ADB recommends policymakers step up their monitoring of local financial markets and have clear policies in place to deal with stressed institutions, provide adequate provisions of foreign and domestic liquidity so that credit continues to flow into the economy and consider a range of policies to contain the spillover effects of the worsening financial conditions and risks arising from weaker growth on regional banking systems.
According to an expert, "Innovative measures to combat financial institution failure may help insulate Nepal from the global financial crisis." "Over exposure of financial institutions to the real estate sector that has seen a 500 per cent rise in the last five years despite no new economic activities is an odd phenomenon," said Ravi Kumar Swami, a cost consultant and chartered accountant from India.
Though Nepal Ratra Bank has put a 10 per cent cap on the total loan portfolio of any bank, it still is huge in the context of Nepal, he said adding that the size of economy determines how resilient a country is. "Nepal also might feel the heat of the global financial crisis as Asia and particularly South Asia has started feeling it," he added.
According to a new report from Asian Development Bank (ADB), economic growth in developing Asia will slow to 5.8 per cent in 2009, down from a likely 6.9 per cent this year and nine per cent in 2007, as the impact of the global financial crisis spreads to emerging markets.
With the global economy facing a major downturn, the region's economic resilience will be tested by weakening exports and a sharp slowdown of private capital flows, according to the December issue of Asia Economic Monitor (AEM).
"The year 2009 is likely to be a difficult one for developing Asia but it will be manageable if countries respond decisively and collectively," Jong-Wha Lee, head of ADB's Office of Regional Economic Integration (OREI), said adding that swift action by policymakers to stem both the threat to the financial systems and the real economy would allow most of the region's economies to sustain a healthy if slower expansion.
AEM also recommends the region's authorities continue to improve regulation and overseeing of financial systems to strengthen transparency and accountability; enhance sound regulation and prudent overseeing; mitigate the procyclicality of financial markets; broaden and deepen financial markets to enhance resilience and reinforce cross-border cooperation.
According to a special note, "Developing Asia's Prospects in the Global Slowdown," also released by ADB today, South Asia is likely to reach 6.8 per cent growth this year and 6.1 per cent in 2009, down from 8.6 per cent in 2007.
ADB recommends policymakers step up their monitoring of local financial markets and have clear policies in place to deal with stressed institutions, provide adequate provisions of foreign and domestic liquidity so that credit continues to flow into the economy and consider a range of policies to contain the spillover effects of the worsening financial conditions and risks arising from weaker growth on regional banking systems.
Wednesday, December 10, 2008
Solution in sight to Nefisco-investor row
The lingering dispute between Nepal Finance Ltd (Nefisco) and investors is close to being resolved as Nefisco has agreed to give ordinary shares to the investors who had bought promoters' shares from the company which sold them the shares allegedly without informing them of their status.
Anoj Agrawal, Broker No 6 - who had bought 3,500-unit of promoters' shares of Lumbini Bank Ltd - said Nefisco had finally agreed to give investors 'ordinary shares' instead of the promoters' shares that it had sold them.
Nefisco sold promoters' shares of Lumbini Bank to the investors as ordinary shares without declaring the status of those shares. Investors had since been urging the finance company to either give them the share certificates of 'ordinary shares' that they had bought or refund the money.
However, after several meetings between Nefisco and the shareholders' representatives, it was decided to give investors ordinary shares.
Nefisco chief executive officer (CEO) Sudhindra Lal Pradhan said that his company had finally agreed to give 3,500-units of ordinary shares instead of promoters' shares. "We had been holding dialogue with Lumbini Bank and the investors for quite some time," he said adding that Nefisco had agreed to the investors' demands.
Though promoters' shares can be sold and bought in the secondary market just like ordinary shares, they have separate status and pricing mechanism that are lower than the market price.
Nefisco also came under fire for not having followed the central bank's directives. On August 13, Securities Board of Nepal (Sebon) suspended the merchant banking licence of Nefisco. It was the first time that Sebon took such stern action after it received a series of complaints from investors against it.
Invoking the Securities Act-2063, Clause 58 (2)(D) and Clause 60 (C), Sebon suspended Nefisco's merchant banking licence and barred it from operating as a merchant banker due to its alleged 'fraudulent' transaction of promoters' shares. Forbidding Nefisco to act as merchant banker, issue manager, underwriter or share registrar, Sebon said it took the step to safeguard the investors' interest after receiving a slew of complaints against Nefisco.
The investors bought the shares thinking these to be ordinary shares. After learning of the status of these shares, they accused Nefisco of duping them. Usually, the brokers for the seller know the status of the shares before they are traded but in this case they ignored it when the transaction took place.
It took a marathon round of investors' meetings with Nefisco, Sebon, Nepse and Lumbini Bank, for the case to get solved. The blame game continued between Nefisco and brokers for long.
However, this has not been the only case of sale of promoters' shares to investors. Some other financial institutions like Kathmandu Finance Ltd had also sold its promoters' shares to the public without declaring their status.
Anoj Agrawal, Broker No 6 - who had bought 3,500-unit of promoters' shares of Lumbini Bank Ltd - said Nefisco had finally agreed to give investors 'ordinary shares' instead of the promoters' shares that it had sold them.
Nefisco sold promoters' shares of Lumbini Bank to the investors as ordinary shares without declaring the status of those shares. Investors had since been urging the finance company to either give them the share certificates of 'ordinary shares' that they had bought or refund the money.
However, after several meetings between Nefisco and the shareholders' representatives, it was decided to give investors ordinary shares.
Nefisco chief executive officer (CEO) Sudhindra Lal Pradhan said that his company had finally agreed to give 3,500-units of ordinary shares instead of promoters' shares. "We had been holding dialogue with Lumbini Bank and the investors for quite some time," he said adding that Nefisco had agreed to the investors' demands.
Though promoters' shares can be sold and bought in the secondary market just like ordinary shares, they have separate status and pricing mechanism that are lower than the market price.
Nefisco also came under fire for not having followed the central bank's directives. On August 13, Securities Board of Nepal (Sebon) suspended the merchant banking licence of Nefisco. It was the first time that Sebon took such stern action after it received a series of complaints from investors against it.
Invoking the Securities Act-2063, Clause 58 (2)(D) and Clause 60 (C), Sebon suspended Nefisco's merchant banking licence and barred it from operating as a merchant banker due to its alleged 'fraudulent' transaction of promoters' shares. Forbidding Nefisco to act as merchant banker, issue manager, underwriter or share registrar, Sebon said it took the step to safeguard the investors' interest after receiving a slew of complaints against Nefisco.
The investors bought the shares thinking these to be ordinary shares. After learning of the status of these shares, they accused Nefisco of duping them. Usually, the brokers for the seller know the status of the shares before they are traded but in this case they ignored it when the transaction took place.
It took a marathon round of investors' meetings with Nefisco, Sebon, Nepse and Lumbini Bank, for the case to get solved. The blame game continued between Nefisco and brokers for long.
However, this has not been the only case of sale of promoters' shares to investors. Some other financial institutions like Kathmandu Finance Ltd had also sold its promoters' shares to the public without declaring their status.
Tuesday, December 9, 2008
Minister Bhatta fails to tackle transporters' mafia raj
The state oil monopoly - Nepal Oil Corporation (NOC) - has taken the global cues to slash fuel prices successively over the past three months. Be that as it may, the transport operators are standing their ground and have refused to cut fares despite popular demand.
The transport entrepreneurs clearly hold their sway over an effete Ministry of Transport Management and Labour (MoTML).
Such is their stranglehold that entrepreneurs arbitrarily hike the fare. They never feel the urge to consult the MoTML. It's been more than two months since the ruling coalition has slashed the fuel prices. But private transport operators are in no mood to relent as they laugh all the way to the banks.
Lekh Raj Bhatta, minister for Transport management and Labour, has, however, done his bit. After marathon parleys with transport entrepreneurs, he has agreed to reduce fares by six per cent for diesel-vehicles and seven per cent for those run by petrol.
But, neither has been implemented till date, which has a ripple effect on the economy. The prices of essential goods are spiralling. Inflation, which is hovering around 14.1 per cent in the first quarter, as per Nepal Rastra Bank's latest figure, is a growing pointer to this.
Consumer bodies are cut up with sorry state of affairs.
Ram Chandra Simkhada, secretary, Consumers' Forum, Nepal, dubbed it anarchy. "This is fraud. The government must come down heavily on them," he said.
"The ministry for reasons best known to it has failed to implement the decision. The earlier cut was in tune with the then prices. There has been another round of revision since then. The fares should come down by a minimum 20 per cent," he reasoned.
NOC also came in line of Simkhada's fire for "lack of transparency in fuel price cuts".
Purushottam Ojha, secretary, supplies and commerce, had commented last week that the latest reduction of prices, pegged at Rs 5, was to make it on a par with the cost of petroleum products in India.
But, his fuzzy logic stands exposed, thanks to the latest price revision by the Indian authorities.
India slashed the price of petrol by INR 5 and diesel by NPR 2.
The transport entrepreneurs clearly hold their sway over an effete Ministry of Transport Management and Labour (MoTML).
Such is their stranglehold that entrepreneurs arbitrarily hike the fare. They never feel the urge to consult the MoTML. It's been more than two months since the ruling coalition has slashed the fuel prices. But private transport operators are in no mood to relent as they laugh all the way to the banks.
Lekh Raj Bhatta, minister for Transport management and Labour, has, however, done his bit. After marathon parleys with transport entrepreneurs, he has agreed to reduce fares by six per cent for diesel-vehicles and seven per cent for those run by petrol.
But, neither has been implemented till date, which has a ripple effect on the economy. The prices of essential goods are spiralling. Inflation, which is hovering around 14.1 per cent in the first quarter, as per Nepal Rastra Bank's latest figure, is a growing pointer to this.
Consumer bodies are cut up with sorry state of affairs.
Ram Chandra Simkhada, secretary, Consumers' Forum, Nepal, dubbed it anarchy. "This is fraud. The government must come down heavily on them," he said.
"The ministry for reasons best known to it has failed to implement the decision. The earlier cut was in tune with the then prices. There has been another round of revision since then. The fares should come down by a minimum 20 per cent," he reasoned.
NOC also came in line of Simkhada's fire for "lack of transparency in fuel price cuts".
Purushottam Ojha, secretary, supplies and commerce, had commented last week that the latest reduction of prices, pegged at Rs 5, was to make it on a par with the cost of petroleum products in India.
But, his fuzzy logic stands exposed, thanks to the latest price revision by the Indian authorities.
India slashed the price of petrol by INR 5 and diesel by NPR 2.
Government spending falls, revenue up
The total government spending has decreased by 2.4 per cent to Rs 29.3 billion in the first three months of fiscal year 2008-09, compared to an increase of 53.7 percent in the corresponding period last fiscal year. The reduction of such spending was due to a decline in recurrent as well as capital expenditure, according to the central bank.
In the first quarter of this fiscal year, recurrent expenditure has decreased by 13.2 per cent to Rs 18.5 billion. In the corresponding period of the previous fiscal year, recurrent expenditure had increased by 35.6 per cent. A significant amount was spent for the preparation of the Constitution Assembly (CA) election in the previous year, there was no occurrence of such expenditure in the current fiscal year pulling the account for such a decline in recurrent expenditure in the review period.
The principal repayment expenditure has also increased by 20.8 per cent to Rs 4.2 billion mainly on account of the payment of treasury bills amounting to Rs 2.8 billion, stated a report of the Nepal Rastra Bank (NRB).
However, the finance ministry led by Dr Baburam Bhattarai has been successful in revenue mobilisation that has seen a encouraging increase in the first quarter. It grew by 16 per cent to Rs 22.3 billion compared to an increase of 18.8 per cent in the corresponding period last fiscal year.
In the review period, income tax, VAT revenue and registration fee recorded a higher growth whereas customs, excise and vehicle tax revenue recorded a lower growth compared to that of the corresponding period of the previous year. Moreover, non-tax revenue witnessed a decline of 59.7 per cent. The revenue will increase more in the days to come as the government has come heavily on the open sale of liquors and started providing licence keeping track on its sale.
The government received foreign cash loans of Rs 936.7 million and foreign cash grants of Rs 2.5 billion in the first three months of 2008-09. The government had received foreign cash loans of Rs 845.7 million and foreign cash grants of Rs 1.2 billion in the corresponding period of the previous year.
The government did not mobilize any domestic borrowing in the first three months of this fiscal year, stated the report.
In the first quarter of this fiscal year, recurrent expenditure has decreased by 13.2 per cent to Rs 18.5 billion. In the corresponding period of the previous fiscal year, recurrent expenditure had increased by 35.6 per cent. A significant amount was spent for the preparation of the Constitution Assembly (CA) election in the previous year, there was no occurrence of such expenditure in the current fiscal year pulling the account for such a decline in recurrent expenditure in the review period.
The principal repayment expenditure has also increased by 20.8 per cent to Rs 4.2 billion mainly on account of the payment of treasury bills amounting to Rs 2.8 billion, stated a report of the Nepal Rastra Bank (NRB).
However, the finance ministry led by Dr Baburam Bhattarai has been successful in revenue mobilisation that has seen a encouraging increase in the first quarter. It grew by 16 per cent to Rs 22.3 billion compared to an increase of 18.8 per cent in the corresponding period last fiscal year.
In the review period, income tax, VAT revenue and registration fee recorded a higher growth whereas customs, excise and vehicle tax revenue recorded a lower growth compared to that of the corresponding period of the previous year. Moreover, non-tax revenue witnessed a decline of 59.7 per cent. The revenue will increase more in the days to come as the government has come heavily on the open sale of liquors and started providing licence keeping track on its sale.
The government received foreign cash loans of Rs 936.7 million and foreign cash grants of Rs 2.5 billion in the first three months of 2008-09. The government had received foreign cash loans of Rs 845.7 million and foreign cash grants of Rs 1.2 billion in the corresponding period of the previous year.
The government did not mobilize any domestic borrowing in the first three months of this fiscal year, stated the report.
Monday, December 8, 2008
PPP has no alternative to development
The country requires a huge infrastructure investment of above $60 billion in next 10-15 years and there is no alternative to PPP to develop infrastructure. But the PPP Act and Regulations have many constriants making private sector hesitant to invest on it.
The government has targetted 10,000 MW electricity generation in the next 10 years time, which alone will require an investment of $20 billion at current prices apart from an additional investment of $40 billion by the year 2025 in infrastructure, "That is, if our GDP grows consistently at seven per cent," experts opined.
"The problem is that the size of our economy is too small," said Maheshwor Prakash Shrestha, co-ordinator of Infrastructure Bank (proposed) while presenting his paper on Challenges and Constraints in PPP Financing - Bankers' Perspective, at an interaction on 'Private Financing in Building and Operation of Infrastructure Act 2063 and Regulations 2064', organised by the Ministry of Physical Planning and Works (MPPW), Public Private Partnership for Urban Environment (PPPUE), Ministry of Local Development and UNDP jointly here today.
Nepal's total GDP as of this mid-January was Rs 71,9480 million ($8.993 billion) and the total deposit base of the banking sector as a whole including development banks and finance companies is just a meagre $4.689 billion (Rs 37,5040 million).
"On the top of that, most of the deposits have maturity period of less than a year," Shrestha said adding that it was a challenge for the sector to book assets for a longer period, say of ten years or more. Infrastructure projects take a long time to complete and returns rolls in only after 10 to 12 years. PPP projects generally carry a stable lower rate of return. "Generally, they carry a return of 10 to 15 per cent," he said adding that in many cases the return does not justify comparatively higher rate of investment. Though, there are specific incentives by Nepal Rastra Bank to finance PPPs, banks finance PPPs on a basis similar to deprived sector lending," he informed.
However, the basic theme of PPP is joint resource sharing between the government and private sector for mutual benefit. But the PPP Act and rules there under does not treat the private sector and government at par, complained Shrestha adding that the government acts as a regulator and the private sector as a follower.
South Asia's infrastructure investment need is estimated at $94 billion per annum, according to Asian Development Bank. Infrastructure investments are nearly half the estimated need and are done predominantly by governments.
Nepal is very poor in terms of providing basic infrastructure facilities like energy, transportation, water and sanitation, pushing the country towards more poverty. World Bank says that infrastructure can deliver major benefits in economic growth, poverty alleviation, and environmental sustainability. Infrastructure represents, if not the engine, then the wheels of economic activity.Sukunta Lal Hirachan, immediate past president of the Federation of Contractors' Association of Nepal (FCAN) and Kamal Raj Pande, joint secretary at the MoPPW, also presented their papers at the programme where private developers, banks, project developers (consultants) took part. The programme has been organised to disseminate information, sensitise and obtain feedback on the PPP Act and Regulation.
The government has targetted 10,000 MW electricity generation in the next 10 years time, which alone will require an investment of $20 billion at current prices apart from an additional investment of $40 billion by the year 2025 in infrastructure, "That is, if our GDP grows consistently at seven per cent," experts opined.
"The problem is that the size of our economy is too small," said Maheshwor Prakash Shrestha, co-ordinator of Infrastructure Bank (proposed) while presenting his paper on Challenges and Constraints in PPP Financing - Bankers' Perspective, at an interaction on 'Private Financing in Building and Operation of Infrastructure Act 2063 and Regulations 2064', organised by the Ministry of Physical Planning and Works (MPPW), Public Private Partnership for Urban Environment (PPPUE), Ministry of Local Development and UNDP jointly here today.
Nepal's total GDP as of this mid-January was Rs 71,9480 million ($8.993 billion) and the total deposit base of the banking sector as a whole including development banks and finance companies is just a meagre $4.689 billion (Rs 37,5040 million).
"On the top of that, most of the deposits have maturity period of less than a year," Shrestha said adding that it was a challenge for the sector to book assets for a longer period, say of ten years or more. Infrastructure projects take a long time to complete and returns rolls in only after 10 to 12 years. PPP projects generally carry a stable lower rate of return. "Generally, they carry a return of 10 to 15 per cent," he said adding that in many cases the return does not justify comparatively higher rate of investment. Though, there are specific incentives by Nepal Rastra Bank to finance PPPs, banks finance PPPs on a basis similar to deprived sector lending," he informed.
However, the basic theme of PPP is joint resource sharing between the government and private sector for mutual benefit. But the PPP Act and rules there under does not treat the private sector and government at par, complained Shrestha adding that the government acts as a regulator and the private sector as a follower.
South Asia's infrastructure investment need is estimated at $94 billion per annum, according to Asian Development Bank. Infrastructure investments are nearly half the estimated need and are done predominantly by governments.
Nepal is very poor in terms of providing basic infrastructure facilities like energy, transportation, water and sanitation, pushing the country towards more poverty. World Bank says that infrastructure can deliver major benefits in economic growth, poverty alleviation, and environmental sustainability. Infrastructure represents, if not the engine, then the wheels of economic activity.Sukunta Lal Hirachan, immediate past president of the Federation of Contractors' Association of Nepal (FCAN) and Kamal Raj Pande, joint secretary at the MoPPW, also presented their papers at the programme where private developers, banks, project developers (consultants) took part. The programme has been organised to disseminate information, sensitise and obtain feedback on the PPP Act and Regulation.
Sunday, December 7, 2008
India unveils IRs 3,000 billion package to pump prime economy
New Delhi: In a bid to contain the impact of the global financial crisis on India, the government Sunday unveiled a IRs 300,000 crore (IRs 3,000 billion/$60 billion) package to pump prime the economy with specific measures for various sectors.
The amount is to be spent over the remaining four months on a host of areas and stake holders such as exporters, housing, infrastructure and textiles. A four per cent cut in Value Added Tax (VAT) has also been announced to help the corporate sector in general.
"The government has been concerned about the impact of the global financial crisis on the Indian economy and a number of steps have been taken to deal with this problem," an official statement said, unveiling the package.
The measures Sunday come a day after the central bank reduced its key rates and eased the norms for accessing overseas funds to reduce the cost of borrowing for commercial banks and signal them to lower interest rate for India Inc.
These measures were overseen by Indian Prime Minister Manmohan Singh himself, in consultations with now Home Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Commerce Minister Kamal Nath, officials said.
As a first step, the United Progressive Alliance (UPA) government will seek parliament's mandate for an additional allocation of IRs 200 billion to take the authorised plan and non-plan expenditure to IRs 3,000 billion in the remaining months of the fiscal. Parliament session is slated to open December 10.
“The economy will continue to need stimulus in 2009-2010 also and this can be achieved by ensuring a substantial increase in plan expenditure as part of the budget for next year,” the statement said.
The measures for exporters, who saw a decline in shipments in October for the first time in five years, include an interest support of two percent for labour intensive sectors like textiles, handicraft and handloom.
This apart, additional allocation has been made towards various incentives for exporters, guarantee of export credit, full refund of service tax to foreign agents and refund of service tax under the duty drawback scheme.
Instructions have also been given to state-run banks to unveil a scheme under which borrowers for houses under two categories - up to IRs 500,000 and up to IRs 2 million - will get special incentives.
“Housing is a potentially very important source of employment and demand for critical sectors and there is a large unmet need for housing in the country, especially for middle and low income groups,” the statement said.
For small and micro enterprises, the limits under the credit guarantee scheme which gives access to working capital and other financial needs, have been doubled to IRs 10 million.
The lock in period for loans covered under the existing credit guarantee scheme is also being reduced from 24 to 18 months to encourage banks to extend more loans under the credit guarantee scheme, the statement said.
The government has also authorised the India Infrastructure Finance Co Ltd (IIFCL) to raise IRs 100 billion ($2 billion) through tax-free bonds to support financing of government-financed infrastructure projects.
“These funds will be used by IIFCL to refinance bank lending of longer maturity to eligible infrastructure projects, particularly in highways and port sectors.” In a push to the automobile sector, government departments have been allowed to replace vehicles within the allowed budget, with a major relaxation in the time-consuming procedures.
This apart, import duty on naphtha for use by the power sector is being reduced to zero, while export duty on iron ore fines will be eliminated, and reduced to five per cent for lumps.
“The government is keeping a close watch on the evolving economic situation and will not hesitate to take any additional steps that may be needed to counter recessionary trends and maintain the pace of economic activity.” -- Agencies
Highlights of India's fiscal stimulus package
New Delhi: The following are the highlights of the fiscal stimulus package unveiled by the government Sunday to contain the impact of global financial crisis on the Indian economy:
- Plan, non-plan expenditure of IRs 300,000 crore (IRs 3,000 billion/$60 billion) in four months
- Parliament nod to be sought for IRs 20,000 crore more toward plan expenditure
- Across-the-board cut of four percent in the ad valorem central value-added tax
- Interest subvention of two percent on export credit for labour intensive sectors
- Additional allocations for export incentive schemes
- Full refund of service tax paid by exporters to foreign agents
- Incentives for loans on housing for up to IRs 500,000, and up to IRs 2 million
- Limits under the credit guarantee scheme for small enterprises doubled
- Lock-in period for loans to small firms under credit guarantee scheme reduced
- India Infrastructure Finance Co allowed to raise IRs 100 billion through tax-free bonds
- Norms for government departments to replace vehicles relaxed
- Import duty on naphtha for use by the power sector is being reduced to zero
- Export duty on iron ore fines eliminated
- Export duty on lumps for steel industry reduced to five percent -- Agencies
The amount is to be spent over the remaining four months on a host of areas and stake holders such as exporters, housing, infrastructure and textiles. A four per cent cut in Value Added Tax (VAT) has also been announced to help the corporate sector in general.
"The government has been concerned about the impact of the global financial crisis on the Indian economy and a number of steps have been taken to deal with this problem," an official statement said, unveiling the package.
The measures Sunday come a day after the central bank reduced its key rates and eased the norms for accessing overseas funds to reduce the cost of borrowing for commercial banks and signal them to lower interest rate for India Inc.
These measures were overseen by Indian Prime Minister Manmohan Singh himself, in consultations with now Home Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Commerce Minister Kamal Nath, officials said.
As a first step, the United Progressive Alliance (UPA) government will seek parliament's mandate for an additional allocation of IRs 200 billion to take the authorised plan and non-plan expenditure to IRs 3,000 billion in the remaining months of the fiscal. Parliament session is slated to open December 10.
“The economy will continue to need stimulus in 2009-2010 also and this can be achieved by ensuring a substantial increase in plan expenditure as part of the budget for next year,” the statement said.
The measures for exporters, who saw a decline in shipments in October for the first time in five years, include an interest support of two percent for labour intensive sectors like textiles, handicraft and handloom.
This apart, additional allocation has been made towards various incentives for exporters, guarantee of export credit, full refund of service tax to foreign agents and refund of service tax under the duty drawback scheme.
Instructions have also been given to state-run banks to unveil a scheme under which borrowers for houses under two categories - up to IRs 500,000 and up to IRs 2 million - will get special incentives.
“Housing is a potentially very important source of employment and demand for critical sectors and there is a large unmet need for housing in the country, especially for middle and low income groups,” the statement said.
For small and micro enterprises, the limits under the credit guarantee scheme which gives access to working capital and other financial needs, have been doubled to IRs 10 million.
The lock in period for loans covered under the existing credit guarantee scheme is also being reduced from 24 to 18 months to encourage banks to extend more loans under the credit guarantee scheme, the statement said.
The government has also authorised the India Infrastructure Finance Co Ltd (IIFCL) to raise IRs 100 billion ($2 billion) through tax-free bonds to support financing of government-financed infrastructure projects.
“These funds will be used by IIFCL to refinance bank lending of longer maturity to eligible infrastructure projects, particularly in highways and port sectors.” In a push to the automobile sector, government departments have been allowed to replace vehicles within the allowed budget, with a major relaxation in the time-consuming procedures.
This apart, import duty on naphtha for use by the power sector is being reduced to zero, while export duty on iron ore fines will be eliminated, and reduced to five per cent for lumps.
“The government is keeping a close watch on the evolving economic situation and will not hesitate to take any additional steps that may be needed to counter recessionary trends and maintain the pace of economic activity.” -- Agencies
Highlights of India's fiscal stimulus package
New Delhi: The following are the highlights of the fiscal stimulus package unveiled by the government Sunday to contain the impact of global financial crisis on the Indian economy:
- Plan, non-plan expenditure of IRs 300,000 crore (IRs 3,000 billion/$60 billion) in four months
- Parliament nod to be sought for IRs 20,000 crore more toward plan expenditure
- Across-the-board cut of four percent in the ad valorem central value-added tax
- Interest subvention of two percent on export credit for labour intensive sectors
- Additional allocations for export incentive schemes
- Full refund of service tax paid by exporters to foreign agents
- Incentives for loans on housing for up to IRs 500,000, and up to IRs 2 million
- Limits under the credit guarantee scheme for small enterprises doubled
- Lock-in period for loans to small firms under credit guarantee scheme reduced
- India Infrastructure Finance Co allowed to raise IRs 100 billion through tax-free bonds
- Norms for government departments to replace vehicles relaxed
- Import duty on naphtha for use by the power sector is being reduced to zero
- Export duty on iron ore fines eliminated
- Export duty on lumps for steel industry reduced to five percent -- Agencies
Saturday, December 6, 2008
Nepse shows abnormal behaviour
It happens only in Nepal. It has happened earlier also, when Maoists walked out of the government, Nepse gained.
And this time too, a week after Securities Board of Nepal (Sebon) chairman Dr Chiranjivi Nepal put in his papers, the Nepal Stock Exchange (Nepse) index gained 22.73 points to reach 754.91 points - from last week's closing of 732.18 points - giving a clue to long-suspected manipulation of the market. Under normal conditions, the market should plunged after the board chair went vacant.
All key market propellers - commercial banks, development banks, finance companies, hydropower companies gained, posting 741.85 points, 1137.28 points, 980.77 points and 950.23 points, respectively. Only the insurance company group ended in negative territory, shedding 11.78 points to tumble to 759.57 points.
The sensitive index - the barometer of group-A companies - also gained 3.92 points to climb to 198.48 points. The domination of group- A companies continued this week too as they contributed 77.30 per cent to the total amount transacted. Similarly, the float index - calculated on the basis of real transactions - rose by 0.99 points to reach 73.17 points.
Shareholders of Bank of Kathmandu, this week, gained the most as in terms of monetary value, Bank of Kathmandu (with Rs 88.43 million), Siddhartha Bank (with Rs 44.48 million), Standard Chartered Bank Nepal (with Rs 31.60 million) and Sanima Bikas Bank (with Rs 27.92 million) and Nepal Investment Bank (with Rs 23.07 million) were top scorers.
The market wound up in negative territory for three days in its five-day session. However, it opened in green on Sunday. Nepse gained 18.53 points that day and 15.05 points on Monday to rise to 761.67 points on Tuesday. However, it dipped on Wednesday and Thursday.
In terms of numbers of share units traded, Bank of Kathmandu topped the chart with 43,000-unit shares while in terms of number of transactions Prabhu Finance topped the chart with 421 transactions.
Narayani Finance, Annapurna Bikas Bank, International Leasing and Finance and Guheshwori Merchant and Finance listed their rights shares whereas Diprox Bikas Bank listed its 52,200-unit of bonus shares at Nepse.The government and other institutions' bonds and debentures could not generate public interest in the secondary market. Nepse did not witness any such transaction. Similar was the fate of Over The Counter (OTC) market that also has not seen a single transaction since it started a few months back.
New Sebon chief anytime soon
KATHMANDU: The Finance Ministry will appoint a new chairman of Sebon early this week, according to a ministry source. A retired bureaurocrat is tipped to be the most probable candidate for the post. The post went vacant when Dr Chiranjivi Nepal resigned the chairmanship citing 'no seriousness' on part of Finance Minister Dr Baburam Bhattarai towards developing the capital market. Meanwhile, the government also announced a vacancy for the post of Nepse's general manager. The incumbent general manager Rewat Bahadur Karki has got an extension after his tenure ended three months ago. Karki will stay until a successor is named.
And this time too, a week after Securities Board of Nepal (Sebon) chairman Dr Chiranjivi Nepal put in his papers, the Nepal Stock Exchange (Nepse) index gained 22.73 points to reach 754.91 points - from last week's closing of 732.18 points - giving a clue to long-suspected manipulation of the market. Under normal conditions, the market should plunged after the board chair went vacant.
All key market propellers - commercial banks, development banks, finance companies, hydropower companies gained, posting 741.85 points, 1137.28 points, 980.77 points and 950.23 points, respectively. Only the insurance company group ended in negative territory, shedding 11.78 points to tumble to 759.57 points.
The sensitive index - the barometer of group-A companies - also gained 3.92 points to climb to 198.48 points. The domination of group- A companies continued this week too as they contributed 77.30 per cent to the total amount transacted. Similarly, the float index - calculated on the basis of real transactions - rose by 0.99 points to reach 73.17 points.
Shareholders of Bank of Kathmandu, this week, gained the most as in terms of monetary value, Bank of Kathmandu (with Rs 88.43 million), Siddhartha Bank (with Rs 44.48 million), Standard Chartered Bank Nepal (with Rs 31.60 million) and Sanima Bikas Bank (with Rs 27.92 million) and Nepal Investment Bank (with Rs 23.07 million) were top scorers.
The market wound up in negative territory for three days in its five-day session. However, it opened in green on Sunday. Nepse gained 18.53 points that day and 15.05 points on Monday to rise to 761.67 points on Tuesday. However, it dipped on Wednesday and Thursday.
In terms of numbers of share units traded, Bank of Kathmandu topped the chart with 43,000-unit shares while in terms of number of transactions Prabhu Finance topped the chart with 421 transactions.
Narayani Finance, Annapurna Bikas Bank, International Leasing and Finance and Guheshwori Merchant and Finance listed their rights shares whereas Diprox Bikas Bank listed its 52,200-unit of bonus shares at Nepse.The government and other institutions' bonds and debentures could not generate public interest in the secondary market. Nepse did not witness any such transaction. Similar was the fate of Over The Counter (OTC) market that also has not seen a single transaction since it started a few months back.
New Sebon chief anytime soon
KATHMANDU: The Finance Ministry will appoint a new chairman of Sebon early this week, according to a ministry source. A retired bureaurocrat is tipped to be the most probable candidate for the post. The post went vacant when Dr Chiranjivi Nepal resigned the chairmanship citing 'no seriousness' on part of Finance Minister Dr Baburam Bhattarai towards developing the capital market. Meanwhile, the government also announced a vacancy for the post of Nepse's general manager. The incumbent general manager Rewat Bahadur Karki has got an extension after his tenure ended three months ago. Karki will stay until a successor is named.
Economic crisis looming large
Former vice-chairman of National Planning Commission (NPC) Dr Shankar Sharma today said the Maoists’ ‘economic revolution’ had failed.
“The delay in service delivery, tug-of war in the Maoist party — between hardliners and moderate faction — and continuous labour problem have put an end to the Maoist claim of economic revolution,” Dr Sharma said, addressing an interaction on ‘Global Economic Crisis and its impact on Nepal’ organised here today.
“Nepal will feel the heat of global crisis a little late as it is not directly linked to the global financial market. But Nepali exports, tourism sector, foreign direct investment (FDI) and remittances will bear the brunt of the crisis,” Prof Bishwambher Pyakurel said, adding that the government has to cough up Rs 1.9 billion more to pay off foreign debt due to rising US dollar.
Former secretary Dr Bhola Chalise said, “The impact will be felt late but was inevitable. The government’s attitude towards the looming crisis is surprising.” He came down heavily on the government for its lackadaisical approach towards crisis mitigation.
Earlier this week, Finance Minister Dr Baburam Bhattarai claimed that Nepal had not been hit by global crisis. He had presented the first quarter’s data to justify his point.
“However, the crisis started in September,” Dr Sharma said, adding that it will take six months to one year to affect Nepali economy. “It’s obvious that the old data, which the Finance Minister presented, doesn’t show any impact,” the former vice-chairman said.
“The data is encouraging,” Finance Secretary Rameshwor Khanal said, defending the government, and added that there was enough liquidity in the financial system at present. “There might be some impact. That’s why the government has formed a committee to study its impact,” he added.
Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said the entrepreneurs had started paying the price of the global meltdown. “The first impact has been on food commodities,” he said, adding,”Apart from that, the private sector - despite government’s repeated claims - is suffering from labour dispute. Around 54 industries were closed or remained closed for a long time in the last six months.” Complaining of lawlessness in the country, Joshi said, “Security is our primary concern.”
“The increase in revenue generation will not sustain in the long run,” Dr Dilli Raj Khanal, another economist said, adding that the government can neither meet the GDP target of seven per cent nor will it be able to curb the price rise.
"India is bringing a stimulus package tomorrow and Nepal government is still taking the looming crisis surfacially," he blamed.
“The delay in service delivery, tug-of war in the Maoist party — between hardliners and moderate faction — and continuous labour problem have put an end to the Maoist claim of economic revolution,” Dr Sharma said, addressing an interaction on ‘Global Economic Crisis and its impact on Nepal’ organised here today.
“Nepal will feel the heat of global crisis a little late as it is not directly linked to the global financial market. But Nepali exports, tourism sector, foreign direct investment (FDI) and remittances will bear the brunt of the crisis,” Prof Bishwambher Pyakurel said, adding that the government has to cough up Rs 1.9 billion more to pay off foreign debt due to rising US dollar.
Former secretary Dr Bhola Chalise said, “The impact will be felt late but was inevitable. The government’s attitude towards the looming crisis is surprising.” He came down heavily on the government for its lackadaisical approach towards crisis mitigation.
Earlier this week, Finance Minister Dr Baburam Bhattarai claimed that Nepal had not been hit by global crisis. He had presented the first quarter’s data to justify his point.
“However, the crisis started in September,” Dr Sharma said, adding that it will take six months to one year to affect Nepali economy. “It’s obvious that the old data, which the Finance Minister presented, doesn’t show any impact,” the former vice-chairman said.
“The data is encouraging,” Finance Secretary Rameshwor Khanal said, defending the government, and added that there was enough liquidity in the financial system at present. “There might be some impact. That’s why the government has formed a committee to study its impact,” he added.
Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said the entrepreneurs had started paying the price of the global meltdown. “The first impact has been on food commodities,” he said, adding,”Apart from that, the private sector - despite government’s repeated claims - is suffering from labour dispute. Around 54 industries were closed or remained closed for a long time in the last six months.” Complaining of lawlessness in the country, Joshi said, “Security is our primary concern.”
“The increase in revenue generation will not sustain in the long run,” Dr Dilli Raj Khanal, another economist said, adding that the government can neither meet the GDP target of seven per cent nor will it be able to curb the price rise.
"India is bringing a stimulus package tomorrow and Nepal government is still taking the looming crisis surfacially," he blamed.
Wednesday, December 3, 2008
Consumer at crossroads over pricing war
In the Valley-Petrol - Diesel - Kerosene
NOC price - Rs 85.50 - Rs 60.50 - Rs 60.50
NPDA price - Rs 85.70 - Rs 60.75 - Rs 60.75
-----------
The state oil monopoly Nepal Oil Corporation (NOC) has lived up to its promise, slashing the retail prices of petrol, diesel and kerosene, which will be applicable from this midnight.
Contrary to the global freefall of oil prices, the cuts are a paltry Rs 5 for each item. Currently, international price of crude is hovering around $50 per barrel (159 litres). It had risen to an unprecedented high of $147 per barrel about three months ago.
Ideally, the prices should have been readjusted on the same day NOC received the new price list from its sole supplier of petroleum products, Indian Oil Corporation (IOC). The delay has had a cascading effect in the Valley, which had stopped lifting petrol over the last couple of days, causing an artificial scarcity of sorts.
However, the reduction is couched in a shrewd pricing mechanism. Though in the face of it, the prices have been reduced by Rs 5, the Valley denizens will end up paying more due to Nepal Petroleum Dealers' Association (NPDA) and pollution controlling charge. The negligible alteration - Re 0.50 per litre more for petrol and diesel - in mark-up prices is attributed to 'pollution controlling charge'.
Consequently, petrol and diesel will be available for Rs 85.50 and Rs 60.50 per litre, respectively in the Valley, according to the NOC that has fixed revised price of kerosene at Rs 60.50 per litre, which is on a par with diesel. The cost of ever-scarce cooking gas (LPG) remains unchanged.
But, despite NOC's caveat, the Nepal Petroleum Dealers' Association (NPDA) is busy chalking out its own pricing mechanism.
"A consumer has to pay Rs 85.70 for per litre petrol, Rs 60.75 per litre diesel and Rs 60.75 for per litre kerosene in the Valley," according to NPDA.
Digamber Jha, managing director, NOC, strictly said that NOC fixes retail prices of petroleum products. "NOC will stop supply," he said adding that "if necessary NOC will also suspend the licence of those not following NOC's price list. But entreaties are likely to fall on deaf ears.
The price of Air Turbine Fuel (ATF) has also been reduced by $100 to $1,200 per kilolitre for international flights. Local aviation companies have to cough up Rs 95 per litre, a reduction of Rs 5. Incidentally, bowing to global cues, NOC was compelled to slash prices for the third time in as many months.
Notwithstanding the downward revision, NOC is raking in a tidy monthly profit of Rs 500 million. "But the present profit cannot make up for the cumulative loss that stands around Rs 15 billion. At this rate, NOC will be able to pay its outstanding loan to various financial institutions within next three years," said Purushottam Ojha, secretary at the ministry of commerce and supplies.
On the otherhand, NPDA authorities insisted that NOC price would adversely affect their business prospects within the Valley. They argued that the distance ensured a price difference of Rs 2 in each litre of fuel between the Valley and Hetauda. "Cumulatively, it adds up to an astounding difference of Rs 24,000 for a single tanker," they said.
A logic that may not cut ice with NOC. They, it seems, at loggerheads again and the consumers will again be at crossroads.
NOC price - Rs 85.50 - Rs 60.50 - Rs 60.50
NPDA price - Rs 85.70 - Rs 60.75 - Rs 60.75
-----------
The state oil monopoly Nepal Oil Corporation (NOC) has lived up to its promise, slashing the retail prices of petrol, diesel and kerosene, which will be applicable from this midnight.
Contrary to the global freefall of oil prices, the cuts are a paltry Rs 5 for each item. Currently, international price of crude is hovering around $50 per barrel (159 litres). It had risen to an unprecedented high of $147 per barrel about three months ago.
Ideally, the prices should have been readjusted on the same day NOC received the new price list from its sole supplier of petroleum products, Indian Oil Corporation (IOC). The delay has had a cascading effect in the Valley, which had stopped lifting petrol over the last couple of days, causing an artificial scarcity of sorts.
However, the reduction is couched in a shrewd pricing mechanism. Though in the face of it, the prices have been reduced by Rs 5, the Valley denizens will end up paying more due to Nepal Petroleum Dealers' Association (NPDA) and pollution controlling charge. The negligible alteration - Re 0.50 per litre more for petrol and diesel - in mark-up prices is attributed to 'pollution controlling charge'.
Consequently, petrol and diesel will be available for Rs 85.50 and Rs 60.50 per litre, respectively in the Valley, according to the NOC that has fixed revised price of kerosene at Rs 60.50 per litre, which is on a par with diesel. The cost of ever-scarce cooking gas (LPG) remains unchanged.
But, despite NOC's caveat, the Nepal Petroleum Dealers' Association (NPDA) is busy chalking out its own pricing mechanism.
"A consumer has to pay Rs 85.70 for per litre petrol, Rs 60.75 per litre diesel and Rs 60.75 for per litre kerosene in the Valley," according to NPDA.
Digamber Jha, managing director, NOC, strictly said that NOC fixes retail prices of petroleum products. "NOC will stop supply," he said adding that "if necessary NOC will also suspend the licence of those not following NOC's price list. But entreaties are likely to fall on deaf ears.
The price of Air Turbine Fuel (ATF) has also been reduced by $100 to $1,200 per kilolitre for international flights. Local aviation companies have to cough up Rs 95 per litre, a reduction of Rs 5. Incidentally, bowing to global cues, NOC was compelled to slash prices for the third time in as many months.
Notwithstanding the downward revision, NOC is raking in a tidy monthly profit of Rs 500 million. "But the present profit cannot make up for the cumulative loss that stands around Rs 15 billion. At this rate, NOC will be able to pay its outstanding loan to various financial institutions within next three years," said Purushottam Ojha, secretary at the ministry of commerce and supplies.
On the otherhand, NPDA authorities insisted that NOC price would adversely affect their business prospects within the Valley. They argued that the distance ensured a price difference of Rs 2 in each litre of fuel between the Valley and Hetauda. "Cumulatively, it adds up to an astounding difference of Rs 24,000 for a single tanker," they said.
A logic that may not cut ice with NOC. They, it seems, at loggerheads again and the consumers will again be at crossroads.
Tuesday, December 2, 2008
Dry day ahead of third cut in fuel prices in as many months
Some petrol pumps in the Valley were dry today, albeit deliberately. The reason, though, isn’t hard to seek. The pump owners didn’t replenish their quota, thanks to the ‘open secret’ that petrol prices will be slashed tomorrow.
Saroj Pandey, president, Nepal Petroleum Dealers' Association (NPDA), admitted the dealers’ reluctance. “Prices will be cut tomorrow. But there isn’t any crisis as other pumps were selling petrol. Nepal Oil Corporation (NOC) also didn’t lift petrol from Raxual yesterday and today," he said.
The sole-petroleum supplier has started reviewing the prices from last month. As per the practice, NOC receives the price list from its benefactor Indian Oil Corporation (IOC) on the second and 16th of every month. The cut comes in the wake of new IOC list, which NOC received yesterday. The authorities would review the prices on the basis of the list they receive on second of every month.
Minister for Commerce and Supplies Rajendra Mahato also made a grand announcement on Sunday that fuel prices would go down from Wednesday.
However, NOC officials should have reviewed the price on the same day it receives the list from the IOC. There is always a possibility of a ‘dry day’ — when the price either goes up or down depending on the global cues — every month.
"This problem may not arise from January. We will understand the repercussion by then,” said Pandey.
NOC has reduced petrol prices twice in as many months. Petrol has been slashed to Rs 90 per litre and diesel to Rs 65 per litre.
NOC board will meet at 12 noon tomorrow to decide on the exact figure. According to sources, some senior NOC officials are against the price review, citing delay in transport fare cut.
As per the new price list, NOC stands to lose Rs 61 for each cooking gas (LPG) cylinder. But it will up with other petroleum products. It will make a tidy profit of Rs 27 for each litre of petrol, Rs 47 for Air Turbine Fuel, Rs 8 for diesel and Rs 9 for kerosene
Saroj Pandey, president, Nepal Petroleum Dealers' Association (NPDA), admitted the dealers’ reluctance. “Prices will be cut tomorrow. But there isn’t any crisis as other pumps were selling petrol. Nepal Oil Corporation (NOC) also didn’t lift petrol from Raxual yesterday and today," he said.
The sole-petroleum supplier has started reviewing the prices from last month. As per the practice, NOC receives the price list from its benefactor Indian Oil Corporation (IOC) on the second and 16th of every month. The cut comes in the wake of new IOC list, which NOC received yesterday. The authorities would review the prices on the basis of the list they receive on second of every month.
Minister for Commerce and Supplies Rajendra Mahato also made a grand announcement on Sunday that fuel prices would go down from Wednesday.
However, NOC officials should have reviewed the price on the same day it receives the list from the IOC. There is always a possibility of a ‘dry day’ — when the price either goes up or down depending on the global cues — every month.
"This problem may not arise from January. We will understand the repercussion by then,” said Pandey.
NOC has reduced petrol prices twice in as many months. Petrol has been slashed to Rs 90 per litre and diesel to Rs 65 per litre.
NOC board will meet at 12 noon tomorrow to decide on the exact figure. According to sources, some senior NOC officials are against the price review, citing delay in transport fare cut.
As per the new price list, NOC stands to lose Rs 61 for each cooking gas (LPG) cylinder. But it will up with other petroleum products. It will make a tidy profit of Rs 27 for each litre of petrol, Rs 47 for Air Turbine Fuel, Rs 8 for diesel and Rs 9 for kerosene
Monday, December 1, 2008
PM's promise of fare cut proves hollow
The Nepal Meter Taxi Association (NMTA) has reduced taxi fares by seven per cent after continuous pressure. However, it should have reduced the fares a month ago on November 1 when Nepal Oil Corporation (NOC) has reduced the petroleum products' prices for the second time in a week.
When asked about the delay in reducing taxi fares, contacted, NMTA officials clammed up.
NOC is slated to reduce the price of petroleum products again on December 3, and NMTA too would have to once again reduce the fare accordingly. NOC reduced the petroleum products' prices twice - on October 25 and November 1 - but public transport vehicles did not reduce the fare accordingly though they arbitarily increased fares when the price of petro-products had gone up.
The student unions were protesting against the transporters to create pressure for fare reduction. They have, however, taken their protest programme back after an assurance from Prime Minister Pushpa Kamal Dahal 'Prachanda' that fares would be reduced within two days.
The PM said he would ensure that public transportation complies with the transport ministry's decision to reduce the fares by seven per cent in petrol-run vehicles and six per cent in diesel-run vehicles within two days. However, except for taxis public transport vehicles are yet to reduce the fares.
The Department for Transport Management (DoTM), under the Ministry for Labour and Transport Management, has urged the general people to be wary of taxis charging higher fares.
"Support us by informing about taxis charging high fares. Dial the DoTM's numbers 4602126 and 4601002," the department said adding that it has already seized the licenses and other important documents of four taxis on the charge of taking higher taxi fares after an investigation by its probe committee.
Meanwhile, NMTA through a press release has asked all taxi drivers to charge seven per cent less fares and told them to take the list of seven per cent discount fares fixed by the government on November 22.
When asked about the delay in reducing taxi fares, contacted, NMTA officials clammed up.
NOC is slated to reduce the price of petroleum products again on December 3, and NMTA too would have to once again reduce the fare accordingly. NOC reduced the petroleum products' prices twice - on October 25 and November 1 - but public transport vehicles did not reduce the fare accordingly though they arbitarily increased fares when the price of petro-products had gone up.
The student unions were protesting against the transporters to create pressure for fare reduction. They have, however, taken their protest programme back after an assurance from Prime Minister Pushpa Kamal Dahal 'Prachanda' that fares would be reduced within two days.
The PM said he would ensure that public transportation complies with the transport ministry's decision to reduce the fares by seven per cent in petrol-run vehicles and six per cent in diesel-run vehicles within two days. However, except for taxis public transport vehicles are yet to reduce the fares.
The Department for Transport Management (DoTM), under the Ministry for Labour and Transport Management, has urged the general people to be wary of taxis charging higher fares.
"Support us by informing about taxis charging high fares. Dial the DoTM's numbers 4602126 and 4601002," the department said adding that it has already seized the licenses and other important documents of four taxis on the charge of taking higher taxi fares after an investigation by its probe committee.
Meanwhile, NMTA through a press release has asked all taxi drivers to charge seven per cent less fares and told them to take the list of seven per cent discount fares fixed by the government on November 22.
Sunday, November 30, 2008
Exports up sixfold but imports far behind: NRB
Exports surged six-fold while imports more than doubled in the first quarter (Q1) of the current fiscal year in comparison to the same period the last fiscal year.
In the first three months of 2008-09 fiscal, exports went up by 27.1 per cent in comparison to a rise of just 4.3 per cent in the corresponding period for the previous year, according to the first quarter report of the Nepal Rastra Bank (NRB), the central bank. At the same time, total imports also increased by 30.6 per cent in the same period in comparison to a lower increase of 13.1 per cent in the Q1 of last fiscal year.
"Of the total exports, export to India increased by 10.1 per cent in comparison to an increase of 0.6 per cent in the same period last fiscal year. Exports to other countries alo soared by 58.3 per cent compared to an increase of 11.9 per cent in the same period of the previous year," said the report 'Recent Macroeconomic Situation' based on Q1.
The report attributes the rise in exports to India to the upsurge in exports of readymade garments, shoes and sandals, polyester yarn, copper wire, rod and GI pipe. Likewise, the rise in exports to other countries was ascribed to the upsurge in exports of pulses, woolen carpets, pashmina, herbs and tanned hides.
Meanwhile, imports from India augmented by 19.3 per cent in the review period compared to a growth of 13.7 per cent in the corresponding period the last fiscal year. Imports from other countries expanded by 48.5 per cent compared to just 12.1 per cent last fiscal, said NRB.An increase in the import of petroleum products, vehicles & spare parts, cold-rolled sheet in coil, hot-rolled sheet in coil and cement, among others, from India and gold, MS billet, telecommunication equipment & parts, computer & parts and polythene granules, among others, from other countries led to the surge in imports in Q1.
Overall Balance of Payment (BoP) recorded a surplus of Rs 7.7 billion in the first three months of this fiscal year in contrast to a deficit of Rs 5.6 billion in the same period last fiscal. According to the central bank, the current account also posted a surplus of Rs 8.8 billion in the period as against a deficit of Rs 6.6 billion in the corresponding period of the previous fiscal year. Such current account surplus was primarily attributed to the surge in net transfers by 75.5 per cent in the first three months. Under transfers, workers' remittances soared by 80.7 per cent compared to a growth of only 17.2 per cent in the same period last fiscal year.
Gross foreign exchange reserves stood at Rs 230.8 billion by mid-October, an upsurge by 8.5 per cent compared to the level as in mid-July 2008. Such reserves had gone down by 4.1 per cent in the same period of the preceding year.
However, in terms of the US dollar, gross foreign exchange reserves declined by 3.9 per cent to $3 billion in mid-October. In the same period the previous year, such reserves had gone down by 1.6 per cent. The current level of reserves is adequate for financing merchandise imports for 10.1 months and merchandise and service imports for eight months.
In the first three months of 2008-09 fiscal, exports went up by 27.1 per cent in comparison to a rise of just 4.3 per cent in the corresponding period for the previous year, according to the first quarter report of the Nepal Rastra Bank (NRB), the central bank. At the same time, total imports also increased by 30.6 per cent in the same period in comparison to a lower increase of 13.1 per cent in the Q1 of last fiscal year.
"Of the total exports, export to India increased by 10.1 per cent in comparison to an increase of 0.6 per cent in the same period last fiscal year. Exports to other countries alo soared by 58.3 per cent compared to an increase of 11.9 per cent in the same period of the previous year," said the report 'Recent Macroeconomic Situation' based on Q1.
The report attributes the rise in exports to India to the upsurge in exports of readymade garments, shoes and sandals, polyester yarn, copper wire, rod and GI pipe. Likewise, the rise in exports to other countries was ascribed to the upsurge in exports of pulses, woolen carpets, pashmina, herbs and tanned hides.
Meanwhile, imports from India augmented by 19.3 per cent in the review period compared to a growth of 13.7 per cent in the corresponding period the last fiscal year. Imports from other countries expanded by 48.5 per cent compared to just 12.1 per cent last fiscal, said NRB.An increase in the import of petroleum products, vehicles & spare parts, cold-rolled sheet in coil, hot-rolled sheet in coil and cement, among others, from India and gold, MS billet, telecommunication equipment & parts, computer & parts and polythene granules, among others, from other countries led to the surge in imports in Q1.
Overall Balance of Payment (BoP) recorded a surplus of Rs 7.7 billion in the first three months of this fiscal year in contrast to a deficit of Rs 5.6 billion in the same period last fiscal. According to the central bank, the current account also posted a surplus of Rs 8.8 billion in the period as against a deficit of Rs 6.6 billion in the corresponding period of the previous fiscal year. Such current account surplus was primarily attributed to the surge in net transfers by 75.5 per cent in the first three months. Under transfers, workers' remittances soared by 80.7 per cent compared to a growth of only 17.2 per cent in the same period last fiscal year.
Gross foreign exchange reserves stood at Rs 230.8 billion by mid-October, an upsurge by 8.5 per cent compared to the level as in mid-July 2008. Such reserves had gone down by 4.1 per cent in the same period of the preceding year.
However, in terms of the US dollar, gross foreign exchange reserves declined by 3.9 per cent to $3 billion in mid-October. In the same period the previous year, such reserves had gone down by 1.6 per cent. The current level of reserves is adequate for financing merchandise imports for 10.1 months and merchandise and service imports for eight months.