Tuesday, November 3, 2015

Economy bleeds as blockade continues

Nepal's economy is bleeding blue as the stand-off between government and Tarai-Madhesh centric political parties, and India lingers. Fecklessness on the part of both government and Tarai-Madhesh centric parties is pushing the situation toward the brink.
With the Madhes in turmoil since the last 80 days, importers have been incurring huge demurrage charges at Kolkata port, the key route for Nepal's third country trade. The importers have been paying Rs 40 million per day as demurrage charge at Kolkata port, according to president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pashupati Murarka. He also claimed that the country is losing Rs 2 billion per day due to the unrest and the government's politics first policy. "The country has already lost Rs 160 billion in these days," he said.
Likewise, the government has lost Rs 25 billion in revenue in the first three months of the current fiscal year as the revenue mobilisation has dropped by 10.22 per cent compared to the same period last fiscal year, mainly due to plunge in customs mobilisation, according to the Revenue Division under the Finance Ministry. "The government has lost Rs 1 billion in vehicle tax alone."
The government had aimed at 12 per cent revenue growth for the current fiscal year as against last fiscal year. But the government has been able to mobilise only Rs 75.66 billion against the target of Rs 95.78 billion – a shortfall of 21 per cent – in the first three months.
It is mainly due to low customs revenue and value added tax (VAT), the major contributors to government coffers," thee division explained, adding that VAT mobilisation dropped by 26.43 per cent to Rs 23.58 billion against the target of Rs 32.06 billion. "VAT mobilisation is 16.41 per cent less than last fiscal year's same period," the figures further revealed.
The blockade by India has hit the customs the most as customs mobilisation stood at Rs 13.63 billion – which is a drop by 26.7 per cent compared to the same period last fiscal year – against the government's target of Rs 18.32 billion in customs revenue for the first three months of the fiscal year.
Similarly, banks and financial institutions could have lent Rs 1 billion in a working day in an average, had there been no unrest and bandhs. However, the Tarai-Madhes unrest has crippled their lending capacity, according to Nepal Bankers Association (NBA) president Upendra Poudel. "The banks and financial institutions could have lent at least Rs 70 billion in the last 80 days," he said, adding that they have not been able to lend due to loss of confidence by borrowers, and this will have a cascading impact on the economy. "The sloth in lending will not only hit the banks and financial institutions themselves but shrink the economy also."
Central bank has warned of low economic growth due to the ungoing unrest and blockade that has hit not only the trade and transit, but also contracted the economy.
According to senior economist Prof Dr Bishwambher Pyakuryal, Nepal is facing a unique combination of economic collapse and is moving toward a failed state. "Hyper inflation – due to supply side constraints because of the blockade – falling production, and private sector's loss of confidence have pushed the country toward a failed state," he said, adding that the situation has aggreviated also due to communication-gap between the citizens and the government. "It seems as if there is no government in this country, the economist said, adding that the people are in queue for petroleum products since more than a month, and the government has no clue when it can supply essential products to its populace. "It has created a huge trust deficit on government, which will lead to a question of legitimacy of the government resulting in a failed state," he added.

4 comments:

Nanda Shekar said...

Thanks for this informative article, I found it very interesting and I loved to read it. The facts and figures you have mentioned here is just unbelievable.

Real Estate Bangalore said...

Site at Bangalore | Plots for sale | bangalore5.com
Site at Bangalore, Site for sale in Bangalore, Site for sale in Sarjapur Road, Site for sale in Electronic City, Site in Magadi Road, Site at Devanahalli, Bangalore property
For More: https://www.bangalore5.com/Site-at-Bangalore

Rollme Blunt said...

This is really a very good blog. AtoZ Estates has many different type of office for you………..
Office Space for Rent in Okhla Industrial Area Delhi
Commercial Office Space for Rent in Okhla Industrial Area Delhi
Fully Furnished Office Space for Rent in Okhla Industrial Area
Warehouse Space for Rent in Okhla Industrial Area Delhi
Godown Space for Rent in Okhla Industrial Area Delhi

Rollme Blunt said...



Thanks to really a very Informative blog. AtoZ Estates has many different type of office as you want
Office Space in Okhla Industrial Area Delhi
Commercial Office Space in Okhla Industrial Area Delhi
Fully Furnished Office Space in Okhla Industrial Area Delhi
Warehouse Space in Okhla Industrial Area Delhi
Godown Space in Okhla Industrial Area Delhi