Friday, July 31, 2015

Nepal, India agree on smoothening cross-border vehicular movement

India is devising a web-based solution to facilitate two-way traffic between Nepal and India.
The first meeting of the Nepal-India Cross Border Transport Facilitation Joint Working Group (JWG) under the Motor Vehicle Agreement for regulation of passenger vehicular traffic between the two countries – held in New Delhi on July 16-17 – recommended the web-based solution to facilitate movement of vehicles across the Nepal- India border.
National Informatics Centre (NIC) – the IT-solution provider of Indian government – will design a web-based solution for the issue of online permits under the bilateral Nepal-India Motor Vehicle Agreement," a press note released after the meeting reads.
The web-based solution will help issue, monitor and verify permits for non-scheduled and personal passenger vehicles, it says, adding that the new online vehicle permit system – after being developed by NIC – would be demonstrated to Nepal for consideration, suggestions and concurrence.
The new system would facilitate procurement of vehicle permits for people based in far-flung and remote areas, it adds.
After concurrence by both sides, the web-based portal for issue of vehicle permits would be tested on a pilot basis at Birgunj-Raxaul and Bhairahawa-Sunauli border points. The existing manual and traditional system for the issuing of vehicle permits being used by both countries would continue simultaneously.
The joint-secretary-level meeting – that saw an eight-member delegation from the Ministry of Physical Infrastructure and Transport Management and their counterpart Indian delegation led by India's Ministry of Road Transport and Highways – also agreed for rationalising permit fees, customs duty and bank guarantees for different categories of vehicles.
Likewise, the Indian side told Nepal that free Wi-Fi service and a tracking system have been installed on the Delhi-Kathmandu route.
The JWG also recommended starting regular bus services between India and Nepal in four new routes including Kathmandu-Patna-Bodhgaya, Mahendranagar-New Delhi, Siliguri-Kakarbhitta-Kathmandu and Janakpur-Patna.
Currently, regular bus services between Kathmandu and New Delhi and between Kathmandu and Varanasi are in operation.
The new routes will improve connectivity and seamless movement between Nepal and the border states of India, including Uttar Pradesh, Bihar, West Bengal and Uttarakhand, the note says.

Thursday, July 23, 2015

Central bank directs banks to hike paid-up capital

Encouraging further consolidation, central bank today directed the banks and financial institutions to hike paid up capital within next two years.
The commercial banks need to increase their paid-up capital by four fold to Rs 8 billion – from current Rs 2 billion – by the end of fiscal year 2016-17, said central bank governor Dr Chiranjivi Nepal unveiling the Monetary Policy for the current fiscal year 2015-16, here today.
Likewise, development banks should increase their paid-up capital upto Rs 2.5 billion as per their working area, he said, adding that the minimum paid-up capital requirement for finance companies will be increased from Rs 200 million to between Rs 400 million to Rs 800 million.
Nepal said that the move to raise the paid-up capital was taken to strengthen the banks and financial institutions, make them competitive and bring financial stability. "The objective is to enable a commercial bank to invest in a big infrastructure project on its own without consortium,” he said.
The banks and financial institutions have no other options than to issue rights share, bonus share and further public issue apart from merger to increase their paid up capital. Earlier, central bank had asked the banks and financial institutions to go for merger, according to their convinence. "The move will help lead merger and acquisition – the buzzword that started a decade ago – or the consolidation process in the banking sector to a logical end," said deputy governor Maha Prasad Adhikari. " The central bank move will also encourage good governance," he said, adding that the move is also aimed at bringing a mixed group of promoters to promote self-supervision.
The banks and financial institutions will have to meet the new capital requirement without reserves within the next two years according to the Monetary Policy 2015-16. "The move is aimed at encouraging mergers and consolidation apart from rights issue, bonus issue and issuing further public issue," he added.
But the bankers said that the time period of two years – to increase paid up capital –  is too short, though in the long run, they accept, they have no option than to increase paid up capital. "The merger is not a magic wand," the bankers said, adding that mergers without right partners could be disastrous.
Likewise, some bankers also argued that the move will hurt central bank’s policy of separating the professional bankers and businessmen because the latter are ones with more money to invest. "The increament of paid up capital itself is not an issue, but the time frame is too short,” said president of Nepal Bankers’ Association (NBA) Upendra Poudyal.
However, the sudden but expected move of the central bank to hike paid up capital will fuel the share market.
According to share narket analyst Rabindra Bhattarai the bull run in the share market will not last long as the investors willnot get desired return on their investments in the next two years.
The first Monetary Policy of the incumbent governor Dr Chiranjivi Nepal has, however, not changed much of the existing provisions.
The expansionary Monetary Policy has kept cash reserve ratio (CRR) and statutory liquidity ratio (SLR) unchanged, despite speculation that both could be hiked to check inflation. The Policy has targeted to keep the inflation at 8.5 per cent, though it has not devised any monetary instrument to crack whip on inflation.
The Policy acknowledging the reconstruction drive – in the aftermath of devastating earthquake – and supporting the expansionary fiscal policy lacked plans to deal with price hike, though it has focused on macroeconomic stability and fuelling growth to six per cent.
The monetary policy has also failed to come up with measures to effectively deal with the issue of excess liquidity as the banks and financial institutions currently have over Rs 100 billion of excess liquidity that could increase inflationary pressure.
Last fiscal year, central bank had raised CRR — the portion of total deposits that banks and financial institutions must park at the central bank — for commercial banks to six per cent. Likewise, development banks have to maintain CRR of five per cent as in the past, while finance companies do not have to park more than four per cent of the total deposits at the central bank like in the previous year.
Likewise, SLR — the portion of deposit that has to be invested in government securities and assets like gold — has not been changed either. But policy rate, also popularly known as bank rate, has been revised downwards to seven per cent from eight per cent. The banks and financial institutions that approach the central bank — the lender of the last resort — for loans in dire situation will start getting funds at seven per cent interest rate from now onwards.
The policy has also introduced a new concept of Infrastructure Development Bank – following the budget – as a joint venture with a paid up capital of Rs 20 billion to fund big infrastructure projects.

Paid-up capital requirement 
Institutions – existing capital – requirement in two years
Commercial banks – Rs 2 billion – Rs 8 billion

Development banks
National level – Rs 640 million – Rs 2.5 billion
4 to 10 district-based – Rs 200-300 million – Rs 1.2 billion
1 to 3 district-based – Rs100-300 million – Rs500 million

Finance Companies
National level – Rs200-300 million – Rs 800 million
1 to 3 district-based – Rs100-300 million – Rs 400 million

Monetary Policy 2015-16 Highlights
Inflation target of 8.5 per cent
Banks and financial institutions should bring chip-based debit and credit cards by mid-October
Spread rate to be used for microfinance institutions also
Special supervision of too-big-to-fail banks
Foreign exchange facility of up to IRs 75,000 to be extended to settle payments of Indian transport companies
Foreign exchange facility of up to $500 to be extended to Indian tourists visiting Mansarovar Kailash through Nepali tour operators
CRR, SLR not changed
Banks and financial institutions should invest certain portion of profit to train human resources and for corporate social responsibility (CSR)
Banks and financial institutions can use local currency bonds to maintain statutory liquidity facility
Liquidity Monitoring and Forecasting Framework to be revised
Registration fees and other pre-operating expenses of foreign investors — who establish business with 100 per cent foreign investment — to be reckoned as investment
Permission to be extended to establish national-level Infrastructure Development Bank with a minimum paid-up capital of Rs 20 billion
Banks to be categorised as ‘Systematically Important’ depending on impact they could create on the entire financial system; separate standards to be created to regulate and monitor such institutions
Prompt corrective action to be taken against banks and financial institutions that fail to meet liquidity requirements
Deprived sector lending requirement raised by 0.5 percentage point
Banks and financial institutions allowed to extend loan of up to Rs 1 million on security of land not linked with motorable road unlike current provision
Special refinancing facility at one per cent interest to increase credit flow towards agriculture sector and small enterprises in districts with high poverty incidence

Tuesday, July 14, 2015

Finance minister unveils post earthquake reconstruction budget of Rs 819.47 billion

Finance Minister Dr Ram Sharan Mahat today presented a post-disaster reconstruction budget of Rs 819.47 billion for the next fiscal year 2015-16.
Presentation the budget at the Legislature Parliament, Mahat said that budget for the next fiscal year is 32.6 per cent more than the budget for the current fiscal year. "The government plans to mobilise Rs 475.01 billion (59 per cent) from revenue, Rs 2 billion from principal repayment, Rs 110.93 billion (14 per cent) from foreign grant, Rs 88 billion (11 per cent) from internal borrowing, and Rs 94.96 billion (12 per cent) from foreign loans," he said, adding that the current fiscal year's savings of Rs 48.56 billion will also be used to fund the budget. "The savings from the current fiscal year and principal repayment will make up four per cent."
The expansionary budget has earmarked Rs 484.27 billion (59.1 per cent) for recurrent expenditure, Rs 208.87 billion (25.5 per cent) for capital expenditure and Rs 126.33 billion (15.4 per cent) for financial management provisions.
With priority for reconstruction – after the devastating earthquake of April 25 and subsequent aftershocks – the budget aims to boost people’s confidence on government by prioritising relief, reconstruction and rehabilitation works in the aftermath of the devastating quake, he said, adding that the government has allocated Rs 74 billion for the National Reconstruction Fund, while Rs 17 billion is provided directedly to the concerned authorities until Reconstruction Authorities comes into operation. "The government will not let people of earthquake-hit region feel lack of budget."
Urging private sector to cooperate with the government in reconstruction campaign, Mahat said that National Reconstruction Authority will be given a full shape soon. Pledging to train government staff for disaster management, he said that heritage sites will be prioritised during the reconstruction to revive tourism. "The government will leave no stone unturned to revive tourism," he added.
The socialism-tilted budget – unlikely from Mahat's past six budgets – aims at exploiting internal resources to its maximum, progressing in economic and social index, effectively completing the reconstruction work by issuing reconstruction bonds, Mahat said presenting his seventh budget. The budget has doubled senior citizen allowance to Rs 1,000 per month from Rs 500, he added.
Likewise, the budget promised to train as many as 50,000 youth for reconstruction work.
It will help create employment opportunities, he said, adding that the government will also organise an Investment Conference in the next fiscal year to promote foreign investment.
Minister Mahat said the government is likely to mobilse only 93 per cent of the revenue target for the current fiscal year, due to the devastating earthquake of April 25. "The earthquake is likely to increase poverty," he said, adding that the government will, however, try to restrict it to 25 per cent. "The government is facing a serious challenge to maintain economic growth rate above eight per cent to graduate from the least developed countries (LDC) to the developing country by 2022."
However, the budget has targeted six per cent economic growth for the next fiscal year.
The budget has also pledged its support to Constituent Assembly (CA) for fast-track constitution writing and holding of local body elections, apart from supporting cement industry for access road construction, completing construction of Postal Highway within the next five years, continuing multi-year contract system, and arranging additional budget for projects and programmes facing budget deficiency on basis of their work progress.
Earlier, a meeting of the cabinet in the afternoon has endorsed the budget for the next fiscal year before presenting it to the House.

Monday, July 13, 2015

Lonely planet recommends trekking in Annapurna Region

World's leading travel guide 'Lonely Planet' has included Annapurna Region in its list of 'Best Places to Travel in October 2015'.
Saying that one can gain some serious altitude in Nepal, Lonely Planet has suggested going trekking to Annapurna Region in October. "Do your bit for Nepal's economy and enjoy spectacular views as reward," it said, adding, "Everyone has seen the news reports from the April 25 earthquake in Nepal, but most reports neglected to mention that most of Nepal was untouched by the disaster, including the most popular trekking areas. With the clearing of the monsoon rains, October is once again peak season for trekking, and the Annapurna region is a great, nay epic, place to start."
"In the process of visiting the region, one will be performing a valuable social service, helping Nepal to rebuild after the disaster by investing directly in the local economy," Lonely Planet writes further.
At the time, when the tourism entrepreneurs have been wary of tourist arrivals due to damaged world heritage sites because of devastating earthquake, Lonely Planet's listing is expected to bring back the tourists in October.
From the gateway town of Pokhara, which saw little damage from the tremor, classic trekking routes like Annapurna Circuit and Annapurna Sanctuary Trek offers the kind of views normally reserved for mountaineers, it added. Pokhara is easy to travel from Kathmandu, and it's easy to make arrangements for a trek on arrival.
The Annapurna Circuit is the most popular trekking route in Nepal. It includes Thorong-La pass. The trek reaches an altitude of 5,416 metres at Thorong-La pass, touching the edge of the fabled Tibetan plateau. The magnificent mountain scenery seen at close quarters includes Annapurna 8,091 metres, Dhaulagiri 8,167 metres and Machhapuchchhre 6,993 metres.
The Lonely Planet has also recommended travelling Jordan’s Petra, Mexico, Britain, Italy and New Mexico for the world-renowned Albuquerque International Balloon Fiesta.

Saturday, July 11, 2015

Government to present budget for next fiscal year on July 14

The government is going to present the budget for the next fiscal year 2015-16 on Tuesday.
Finance secretary Suman Sharma confirmed that finance minister Dr Ram Sharan Mahat is presenting the budget for the next fiscal year in the Legislature-Parliament on July 14.
Nepali Congress joint general secretary and lawmaker Purna Bahadur Khadka also confirmed that the budget will be presented on Tuesday.
National Planning Commission (NPC) has revised the budget ceiling upward to Rs 841 billion – including Rs 106 billion for reconstruction after April 25 devastating earthquake that floored over 8,00,000 private and public buildings taking over 9,000 lives – from earlier Rs 735 billion.
The over Rs 841 billion-budget will focus on reconstruction – including the world heritage sites and infrastructures damaged by the earthquake – and revive tourism sector, apart from agriculture as usual, according to the finance minister Mahat.
Likewise, the budget for the next fiscal year is going to add Rs 1,000 allowance, that is provided to the civil servant currently, in the salary, whereas the salary itself could also be increased by 10 per cent.
Earlier, the government was planning to present the fiscal policy on July 15, but it has preponed for a day due to the lawmakers' schedule to go to their respective constituencies with the draft of Constitution to collect the suggestions.
The Finance Ministry has preponed the budget date for a day as the speaker of the House Subash Chandra Nembang requested the government to present budget as soon as possible to let the lawmakers have time to go to their constituencies soon. "The lawmakers will be going to their respective constituencies to collecting suggestions on the draft Constitution on July 17, after endorsing the budget presentation," Nembang said, adding that the discussion on the budget will start after the lawmakers return from their constituencies, after July 23.
The Constitution Assembly (CA) has directed the committee on Citizen Relation and Public Opinion Collection to submit the compiled report of suggestions on July 23.

PM to answer tomorrow
KATHMANDU: Prime Minister Sushil Koirala will respond the House tomorrow, according to the Parliament Secretariat. The premier will answer queries – being raised by the lawmakers during the discussions – over the Programme and Policy next fiscal year 2015-16, presented by the President on July 8. The premier was supposed to respond today, but it was postponed for a day as discussions could not end today. After the Prime Minister's answer on the Programme and Policy, the House will endorse it, informed Parliament Secretariat assistant spokesperson Sudarshan Kuinkel. The lawmakers have – during the discussions yesterday and today – registered over a dozen amendment proposals to the government Programme and Policy.