Travelling, be it surface or air, is going to be a costly affair.
No sooner the government hiked the public transport fare by nine per cent, the Airlines Operators Association of Nepal (AOAN) has also urged the government to hike airfare.
Though the transport entrepreneurs have been lobbying hard for the transport fare hike by 15 per cent, Minister for Labour and Transport Management Mohamed Aftab Alam approved the nine per cent hike today.
However, the Federation of Nepalese National Transport Entrepreneurs (FNNTE) that has been lobbying for at least 15 per cent fare hike, has not officially accepted the new rate, though ministry claims of scientific method for fare hike.
"We have applied scientific method to hike transport fare," Alam said, adding that all the factors associated with transportation are given reasonable weight in setting the new fare. The government has set eight parameters including fuel, spare parts and tax in calculating the new fare.
According to the new rate, people traveling in public vehicles have to pay at least Rs 10.90.Earlier on April 5, 2010, the government had fixed minimum of Rs 10 as the public transport fare but the public transport used to collect up to Rs 12 as minimum fare, which is expected to be further increased by the transporters after today's decision.
However, Alam said that the Department of Transport Management (DoTM) will monitor the fare from tomorrow and the public transportation means not abiding by the rule will be punished on spot.
Meanwhile, the consumer groups termed the fare hike -- that is in favour of the transporters -- anti-public. "It will increase burden to people already suffering from price hike of consumer goods due to high transportation cost," said Jajannath Mishra, secretary of Consumer Rights Protection Forum (CRPF).
The hike in transportation fare will also fuel the market prices of the goods and services, despite government's target of containing the inflation at seven per cent.
Similarly, the Airlines Operators Association of Nepal (AOAN) has also today urged the government to revise the airfare upward. "The airfare used to be revised in every two years, has not been revised for last five years," Sri Kanta Baral, scretary of AOAN said, adding that the Air Turbine Fuel (ATF), insurance, lease tax, VAT, renewal fee have been increased in the last five year, except the airfare.
On Februay 13, it will be five years that the airlines operators havenot revised their fare. The government has also agreed and formed a committee to revise the airfare on November 3, 2010, according to the AOAN.
The committee has submitted the report to the Ministry of Tourism and Civil Aviation one month ago, suggesting the the government to revise the airfare upward soon.
Monday, January 31, 2011
International agency chiefs call for attention to commodity price hike
Volatile and rising prices for basic farm produce, petroleum and raw industrial materials are a cause for concern, especially for the poor of the world, and steps are needed to calm historically turbulent commodities markets, the heads of several international agencies said.
UNCTAD’s second Global Commodities Forum (GCF) opened with addresses by the chiefs of four international agencies and the deputy executive secretary of a fifth. They said the theme of this year’s forum – 'Volatility in international commodity markets' – is timely as prices for such basic products are edging upward towards the limits reached during the 2008 food and energy crises.
UNCTAD secretary-general Supachai Panitchpakdi said that there are serious concerns about the way in which commodity markets have been evolving in recent years. "Since mid-2010, commodities have, for the second time in three years, been experiencing extremely high price volatility," he said, warning of 'speculative distortions that complicate the economic management of commodities production and trade,' and noted that natural events such as floods in Pakistan and fires in the Russian Federation, events which may be linked to global warming, have spurred upward pressure on prices for agricultural goods such as wheat and cotton.
Copper prices, he said, have risen by 35 per cent since the summer of 2010. These forces come on top of basic increases in demand fuelled by the fast-growing economies of such countries as China. "Such volatility has huge negative impacts on vulnerable groups, such as low-income households in developing countries, for whom food expenditure can account for up to 80 per cent of household budgets,” he added.
Panitchpakdi urged greater efforts to 'identify the policy levers that can rein in excessive volatility and maintain prices within a reasonable band'. He also urged commodity-dependent developing countries to continue efforts to diversify their economies so that they are less vulnerable to shifts in commodities markets.
Pascal Lamy, director-general of the World Trade Organisation (WTO), cautioned that '2011 will see the prices of most commodities rise, as the rise in global GDP bolsters demand, led by emerging economies. Global GDP is set to grow by four per cent this year.'" Over 70 per cent of the growth will come from commodity-intensive emerging markets. China, India and Latin America, in particular, will be acting as a ‘pull’ for global commodities," Lamy said, adding that that 'volatility is at its worst in tight and closed markets. It eases in open and, hence, deeper markets.
"Completion of the Doha Round of global trade talks could calm the picture, he added. "In fact, were this round to be completed, least developed countries (LDCs) would get almost entirely duty-free, quota-free access to developed world markets."
Hamadoun I Touré, secretary-general of the International Telecommunication Union (ITU), termed 'the timing of the forum especially important. "For billions of people, the cost of meeting daily food needs takes up a 'significant proportion' of family incomes," he said. "We must therefore work together to ensure the long-term sustainability of the production and marketing of commodities.
"Careful monitoring of these markets is vital, Touré said, and to that end ITU and UNCTAD had signed last year an agreement to set up and run a Natural Resources Information Exchange for African countries.
Ali Mchumo, managing director of the Common Fund for Commodities (CFC), said, "The recent developments in the commodity markets have been a subject of intense attention and discussion by the members of the CFC and all the stakeholders of commodities with whom we interact daily in our projects.
"The challenge, Mchumo said, is to find 'practical workable solutions to the perennial problems of the commodity economy.' He added, "There’s not much disagreement in the international community that commodity dependence is a development problem."
Andrey Vasilyev, deputy executive secretary of the United Nations Economic Commission for Europe (UNECE), said the world’s advanced economies are recovering only slowly from the global recession, with unemployment distressingly high.
Recent rises in commodity prices pose the possibility of contributing unwelcome inflationary pressure, and it is important to limit such prices to the forces of “supply and demand alone," Vasilyev said, and to reduce any influence coming from financial speculation in such goods.
UNECE’s internationally agreed standards for a number of agricultural products are applied in many cases worldwide and help to reduce trade barriers and improve the prospects of farmers in developing countries, he noted.
Opening the session was Luis Manuel Piantini Munnigh, president of UNCTAD’s Trade and Development Board, who told the gathering that the two-day conference is part of 'a search for better solutions for the chronic problems of the commodities economy'.
He said it is important 'to address these chronic problems in a manner that is both systemic and systematic, seeking the best ways to solve them'. The GCF will continue over the next two days with a series of discussions in three parallel 'streams'.
Topics to be covered include 'The state of energy markets: lower volatility and a new price zone for hydrocarbons?'
UNCTAD’s second Global Commodities Forum (GCF) opened with addresses by the chiefs of four international agencies and the deputy executive secretary of a fifth. They said the theme of this year’s forum – 'Volatility in international commodity markets' – is timely as prices for such basic products are edging upward towards the limits reached during the 2008 food and energy crises.
UNCTAD secretary-general Supachai Panitchpakdi said that there are serious concerns about the way in which commodity markets have been evolving in recent years. "Since mid-2010, commodities have, for the second time in three years, been experiencing extremely high price volatility," he said, warning of 'speculative distortions that complicate the economic management of commodities production and trade,' and noted that natural events such as floods in Pakistan and fires in the Russian Federation, events which may be linked to global warming, have spurred upward pressure on prices for agricultural goods such as wheat and cotton.
Copper prices, he said, have risen by 35 per cent since the summer of 2010. These forces come on top of basic increases in demand fuelled by the fast-growing economies of such countries as China. "Such volatility has huge negative impacts on vulnerable groups, such as low-income households in developing countries, for whom food expenditure can account for up to 80 per cent of household budgets,” he added.
Panitchpakdi urged greater efforts to 'identify the policy levers that can rein in excessive volatility and maintain prices within a reasonable band'. He also urged commodity-dependent developing countries to continue efforts to diversify their economies so that they are less vulnerable to shifts in commodities markets.
Pascal Lamy, director-general of the World Trade Organisation (WTO), cautioned that '2011 will see the prices of most commodities rise, as the rise in global GDP bolsters demand, led by emerging economies. Global GDP is set to grow by four per cent this year.'" Over 70 per cent of the growth will come from commodity-intensive emerging markets. China, India and Latin America, in particular, will be acting as a ‘pull’ for global commodities," Lamy said, adding that that 'volatility is at its worst in tight and closed markets. It eases in open and, hence, deeper markets.
"Completion of the Doha Round of global trade talks could calm the picture, he added. "In fact, were this round to be completed, least developed countries (LDCs) would get almost entirely duty-free, quota-free access to developed world markets."
Hamadoun I Touré, secretary-general of the International Telecommunication Union (ITU), termed 'the timing of the forum especially important. "For billions of people, the cost of meeting daily food needs takes up a 'significant proportion' of family incomes," he said. "We must therefore work together to ensure the long-term sustainability of the production and marketing of commodities.
"Careful monitoring of these markets is vital, Touré said, and to that end ITU and UNCTAD had signed last year an agreement to set up and run a Natural Resources Information Exchange for African countries.
Ali Mchumo, managing director of the Common Fund for Commodities (CFC), said, "The recent developments in the commodity markets have been a subject of intense attention and discussion by the members of the CFC and all the stakeholders of commodities with whom we interact daily in our projects.
"The challenge, Mchumo said, is to find 'practical workable solutions to the perennial problems of the commodity economy.' He added, "There’s not much disagreement in the international community that commodity dependence is a development problem."
Andrey Vasilyev, deputy executive secretary of the United Nations Economic Commission for Europe (UNECE), said the world’s advanced economies are recovering only slowly from the global recession, with unemployment distressingly high.
Recent rises in commodity prices pose the possibility of contributing unwelcome inflationary pressure, and it is important to limit such prices to the forces of “supply and demand alone," Vasilyev said, and to reduce any influence coming from financial speculation in such goods.
UNECE’s internationally agreed standards for a number of agricultural products are applied in many cases worldwide and help to reduce trade barriers and improve the prospects of farmers in developing countries, he noted.
Opening the session was Luis Manuel Piantini Munnigh, president of UNCTAD’s Trade and Development Board, who told the gathering that the two-day conference is part of 'a search for better solutions for the chronic problems of the commodities economy'.
He said it is important 'to address these chronic problems in a manner that is both systemic and systematic, seeking the best ways to solve them'. The GCF will continue over the next two days with a series of discussions in three parallel 'streams'.
Topics to be covered include 'The state of energy markets: lower volatility and a new price zone for hydrocarbons?'
Sunday, January 30, 2011
Forex reserve declines, marginally
The gross foreign exchange reserves has declined by 2.2 per cent to Rs 262.90 billion in mid-December 2010 from a level of Rs 268.91 billion as of mid July 2010, according to the central bank.
Such reserves had decreased by 11.2 per cent to Rs 254.47 billion in the same period last fiscal year. However, on a monthly basis, foreign exchange reserve of Rs 1.46 billion increased in the month of mid-November to mid-December (the fifth month of the current fiscal year) from the level of the a month ago in this fiscal year.
"Out of total reserve, Nepal Rastra Bank's (NRB) reserves have declined marginally by 0.8 per cent to Rs 203.72 billion in the first five months of the current fiscal year from a level of Rs 205.37 billion as at mid-July 2010," it said, adding that the gross foreign exchange reserves in US dollar terms, has however, increased marginally by 1.6 per cent to $3.67 billion in mid-December 2010 from a level of $3.61 billion as at mid-July 2010. "Such reserves had decreased by 6.9 per cent in the same period last fiscal year."
Based on the trend of import during the five months of the current fiscal year, the current level of reserves is sufficient for financing merchandise imports of 8.7 months and merchandise and service imports of 7.4 months.
The central bank purchased Indian currency (IC) equivalent to Rs 74.45 billion through the sale of the $1.02 billion in the Indian money market.
Indian rupees equivalent to Rs 66.40 billion was purchased through the sale of $870 million in the same period of the last fiscal year, it added.
IC withdrawal from ATMs in India up significantly
KATHMANDU: Indian currency (IC) withdrawal from ATMs in India has increased, according to the central bank's board member Prof Dr Bishwembher Pyakurel. "In the first five months of current fiscal year Rs 19 billion worth nepali rupees is withdrawan from the ATMs in India," he said, adding that in the same period last fiscal year, the withdrawal stood at Rs 3 billion worth Nepali ripees only. The significant amount of IC withdrawal from India has forced the central bank to look into the matter seriously. A customer can get Rs 25,000 IC at once and not more than Rs 200,000 IC in a month from the bank prompting the withdrawal from ATMs.
Such reserves had decreased by 11.2 per cent to Rs 254.47 billion in the same period last fiscal year. However, on a monthly basis, foreign exchange reserve of Rs 1.46 billion increased in the month of mid-November to mid-December (the fifth month of the current fiscal year) from the level of the a month ago in this fiscal year.
"Out of total reserve, Nepal Rastra Bank's (NRB) reserves have declined marginally by 0.8 per cent to Rs 203.72 billion in the first five months of the current fiscal year from a level of Rs 205.37 billion as at mid-July 2010," it said, adding that the gross foreign exchange reserves in US dollar terms, has however, increased marginally by 1.6 per cent to $3.67 billion in mid-December 2010 from a level of $3.61 billion as at mid-July 2010. "Such reserves had decreased by 6.9 per cent in the same period last fiscal year."
Based on the trend of import during the five months of the current fiscal year, the current level of reserves is sufficient for financing merchandise imports of 8.7 months and merchandise and service imports of 7.4 months.
The central bank purchased Indian currency (IC) equivalent to Rs 74.45 billion through the sale of the $1.02 billion in the Indian money market.
Indian rupees equivalent to Rs 66.40 billion was purchased through the sale of $870 million in the same period of the last fiscal year, it added.
IC withdrawal from ATMs in India up significantly
KATHMANDU: Indian currency (IC) withdrawal from ATMs in India has increased, according to the central bank's board member Prof Dr Bishwembher Pyakurel. "In the first five months of current fiscal year Rs 19 billion worth nepali rupees is withdrawan from the ATMs in India," he said, adding that in the same period last fiscal year, the withdrawal stood at Rs 3 billion worth Nepali ripees only. The significant amount of IC withdrawal from India has forced the central bank to look into the matter seriously. A customer can get Rs 25,000 IC at once and not more than Rs 200,000 IC in a month from the bank prompting the withdrawal from ATMs.
Look outward policy can save real estate sector
Nepalis Direct Investment (NDI) and Foreign Direct Investment (FDI) can resurrect the domestic real estate business, according to a real estate entrepreneur.
"For those Non-resident Nepalis (NRNs), who want to create asset back home, the government can help them by making favourable policy,” said Om Rajbhandari, managing director of Comfort Housing.
“In the first phase, we need to attract the investment from the Nepalis living abroad,” he said, terming the NRNs Direct Investment as NDI -- the word coined by himself.
"From their hard earned money, the NRNs can create asset back home,” he said, adding that the Nepal Land and Housing Development Association (NLHDA) can organise Housing Exhibition for those NRNs abroad, who want to buy home back in Nepal.
He opined that Nepal can also attract Foreign Direct Investment (FDI) by giving expats ownership of apartments. "In each apartment project, 20 per cent to 30 per cent of the total units could be allowed for the expats,” he said, adding that those expats, who are more than 50 years of age can get retirement visa and own an apartment in Nepal.
Meanwhile, the increasing trend of constructing unmanaged residential buildings in the fertile land has forced the government to revise the National Building Code to manage and facilitate modern amenities to address increasingly unmanaged urbanisation and housings.
The decade long insurgency has forced the people to migrate to the urban areas for security reasons speeding up the urbanisation without proper planning and infrastructure.
Among government, private builders and individuals, culturally, the individuals are more inclined to construction of houses as traditionally house gives a sence of security in the society. But the individual construction has been more unmanaged and unplanned.
"The private developers can create a small city or satellite city with all the necessary infrastructures that could lead to planned development,” said Rajbhandari, one of the private developers. "The planned city will serve as the focal point of the multiple dimensions, providing a variety of attractions that promote public enjoyment and appreciation of the area, acting as the anchor of the nation and promoting decentralisation concept too.
"With mass employment opportunities, Multi Dimension Cities (MDCs) will surely be beneficial for people and generate huge revenue for the government too.
The government has also planned 10 new modern cities for business and residential purpose in the vicinity of Mid-hills Highway and North-South corridors. The budget for the current fiscal year has promised infrastructural mapping after the identification of the location and completion of their feasibility studies.
Though, the government has also been involved in the 'People’s Housing Programme' -- that is given continuity in this fiscal year's budget too -- that is extended to Chepang, Raute and Kusunda community’s settlement areas, the private builders are the key players in the sector.
Approach Paper
KATHMANDU: The finance ministry has formed an internal committee to prepare approach paper to loosen the real sector and allow expats to buy apartment. The committee is expetected to submit the approach paper on Monday, according to finance secretary Rameshwor Khanal. In a major policy shift, the government is planning to let the expats buy human-erected apartments.
"For those Non-resident Nepalis (NRNs), who want to create asset back home, the government can help them by making favourable policy,” said Om Rajbhandari, managing director of Comfort Housing.
“In the first phase, we need to attract the investment from the Nepalis living abroad,” he said, terming the NRNs Direct Investment as NDI -- the word coined by himself.
"From their hard earned money, the NRNs can create asset back home,” he said, adding that the Nepal Land and Housing Development Association (NLHDA) can organise Housing Exhibition for those NRNs abroad, who want to buy home back in Nepal.
He opined that Nepal can also attract Foreign Direct Investment (FDI) by giving expats ownership of apartments. "In each apartment project, 20 per cent to 30 per cent of the total units could be allowed for the expats,” he said, adding that those expats, who are more than 50 years of age can get retirement visa and own an apartment in Nepal.
Meanwhile, the increasing trend of constructing unmanaged residential buildings in the fertile land has forced the government to revise the National Building Code to manage and facilitate modern amenities to address increasingly unmanaged urbanisation and housings.
The decade long insurgency has forced the people to migrate to the urban areas for security reasons speeding up the urbanisation without proper planning and infrastructure.
Among government, private builders and individuals, culturally, the individuals are more inclined to construction of houses as traditionally house gives a sence of security in the society. But the individual construction has been more unmanaged and unplanned.
"The private developers can create a small city or satellite city with all the necessary infrastructures that could lead to planned development,” said Rajbhandari, one of the private developers. "The planned city will serve as the focal point of the multiple dimensions, providing a variety of attractions that promote public enjoyment and appreciation of the area, acting as the anchor of the nation and promoting decentralisation concept too.
"With mass employment opportunities, Multi Dimension Cities (MDCs) will surely be beneficial for people and generate huge revenue for the government too.
The government has also planned 10 new modern cities for business and residential purpose in the vicinity of Mid-hills Highway and North-South corridors. The budget for the current fiscal year has promised infrastructural mapping after the identification of the location and completion of their feasibility studies.
Though, the government has also been involved in the 'People’s Housing Programme' -- that is given continuity in this fiscal year's budget too -- that is extended to Chepang, Raute and Kusunda community’s settlement areas, the private builders are the key players in the sector.
Approach Paper
KATHMANDU: The finance ministry has formed an internal committee to prepare approach paper to loosen the real sector and allow expats to buy apartment. The committee is expetected to submit the approach paper on Monday, according to finance secretary Rameshwor Khanal. In a major policy shift, the government is planning to let the expats buy human-erected apartments.
Saturday, January 29, 2011
IMF to host conference on macro and growth policies
Conference on the theme 'Macro and Growth Policies in the wake of the crisis' will be held at the International Monetary Fund (IMF) in Washington DC on March 7-8. The conference will be hosted by four of the world’s most noted economists, including Nobel laureates Michael Spence (Stanford University) and Joseph Stiglitz (Columbia University), and Olivier Blanchard (Economic Counsellor and Director of Research at the IMF), and David Romer (University of California, Berkeley). The event will bring together leading policymakers and academics from both advanced and emerging countries.
The aim of the conference is to distill the policy lessons of the global financial crisis. Participants will focus on six key areas: monetary policy, fiscal policy, financial intermediation and regulation, capital account management, growth strategies, and international coordination and globalisation. They will also seek to make concrete policy recommendations for how to revive sustainable growth while safeguarding macroeconomic and financial stability.
"The crisis has clearly shown both the limits of markets and the limits of government intervention. It is time to take stock, and draw a first set of lessons,” Blanchard said, adding that given the IMF’s mandate to advise its 187 member countries on economic and financial policies, it needs to be at the forefront of this effort. "I look forward to this important conference."
The conference will be open to participation by the general public and media. A conference website, which will allow the proceedings to be webcast live will be launched shortly.
The aim of the conference is to distill the policy lessons of the global financial crisis. Participants will focus on six key areas: monetary policy, fiscal policy, financial intermediation and regulation, capital account management, growth strategies, and international coordination and globalisation. They will also seek to make concrete policy recommendations for how to revive sustainable growth while safeguarding macroeconomic and financial stability.
"The crisis has clearly shown both the limits of markets and the limits of government intervention. It is time to take stock, and draw a first set of lessons,” Blanchard said, adding that given the IMF’s mandate to advise its 187 member countries on economic and financial policies, it needs to be at the forefront of this effort. "I look forward to this important conference."
The conference will be open to participation by the general public and media. A conference website, which will allow the proceedings to be webcast live will be launched shortly.
Friday, January 28, 2011
New investment policy
At least 27 countries introduced new national investment policy measures during October 1, 2010 to January 15, 2011, according to the Investment Policy Monitor.
At the international level, 58 economies concluded 32 new international investment agreements (IIAs), including 23 double taxation treaties (DTTs), five bilateral investment treaties (BIT), and four other IIAs, said the fourth Investment Policy Monitor published by the UNCTAD today.
The Monitor finds there is an ongoing trend towards rebalancing the rights and obligations of private investors with those of the State. This is apparent in stronger regulation of individual industries and an increase in State ownership or control in areas of strategic importance. State influence has also grown in the aftermath of the financial crisis.
At November’s G-20 Seoul Summit, political leaders confirmed their commitment to resisting investment protectionism with a view to generating strong, sustainable, and balanced growth. Effective investment policy making is even more important in light of today’s global investment trends, the Monitor said.
Industrial production and trade have recovered to the pre-crisis levels, but foreign direct investment (FDI) and employment are lagging behind. The Monitor says policy makers need to identify ways and means to encourage private investment to sustain the economic recovery.
At the international level, 58 economies concluded 32 new international investment agreements (IIAs), including 23 double taxation treaties (DTTs), five bilateral investment treaties (BIT), and four other IIAs, said the fourth Investment Policy Monitor published by the UNCTAD today.
The Monitor finds there is an ongoing trend towards rebalancing the rights and obligations of private investors with those of the State. This is apparent in stronger regulation of individual industries and an increase in State ownership or control in areas of strategic importance. State influence has also grown in the aftermath of the financial crisis.
At November’s G-20 Seoul Summit, political leaders confirmed their commitment to resisting investment protectionism with a view to generating strong, sustainable, and balanced growth. Effective investment policy making is even more important in light of today’s global investment trends, the Monitor said.
Industrial production and trade have recovered to the pre-crisis levels, but foreign direct investment (FDI) and employment are lagging behind. The Monitor says policy makers need to identify ways and means to encourage private investment to sustain the economic recovery.
Real estate entrepreneurs discuss with finance ministry
The finance ministry and Nepal Land and Housing Developers Association today discussed on the proposed-draft to let the expats buy apartments in Nepal.
"We discussed with the finance ministry officials today on the positive and negative aspects of the proposed policy that is expected to give a boost to the construction sector," one of the participants said.
In a major policy shift, the government is loosening its policy on real estate and letting foreigners buy apartments -- human-erected property -- aiming at giving momentum to the construction sector, one of the growth sectors in the recent times.
"Opening the sector for foreigners ‘to buy apartments’ is one of the ways that can make the construction sector dynamic," according to the association.
As per existing laws, a foreigner is not allowed to buy land, house or apartments in Nepal as citizenship is a must to buy such immoveable property.
Though, the market last year witnessed a boom in the construction sector in the wake of increased demand for housing and apartments, this year it has witnessed a sluggish growth. The stagnation that proves that last year’s boom was more speculative than intrinsic demand has hurt the growth of the sector that is one of the sectors with competitive advantage with the potential to create more jobs and contribution to economic growth.
Though there is rising domestic demand, according to the association, the low purchasing capacity and no option for financing has slowed down the sector's growth this year.
According to 2001 data the urban population of Nepal totaled 15 per cent and expected to reach 18 per cent by 2015 and 30 per cent by 2030.
According to the revised Housing Policy, based on the population rise, the Urban Housing shortage is expected to rise by 215,357 units every year between 2063 and 2077 (3,015,000 units total) and 1,000,000 units needs repair maintenance. "In Kathmandu valley alone, by 2020, demand of 40,300 units per year is expected," the data reveals.
Similarly, around 87.6 per cent of the total population of Nepal has their own homes, according to the Nepal Rastra Bank's Survey-2008. "Of the total urban population, 88.5 per cent have their own homes while 10 per cent live in rented homes and 1.5 per cent lives without paying rent," it said, adding that in urban areas, 36.1 per cent live in nuclear units, 59.4 per cent live in joint units and 4.3 per cent live in commercial units.
"In urban areas, 60 per cent homes are Concrete, 23.4 per cent homes are mix design and 16.6 per cent are kachhi," the Survey added.
Residential area in 'Greater Kathmandu' has increased from 13.7 per cent in 1971 to 30.6 per cent in 1981 to 46 per cent in 1991-92.
However, until the purchasing capacity of the Nepalis strengthens, the sector needs fresh capital injection to keep its momentum and allowing foreigners to buy apartments could keep the sector alive and kicking, the association added.
Construction industry has recorded 5.7 per cent growth rate in 2008-09 which is notable as compared to other sub sectors. The Central Bureau of Statistics has also predicted construction sector’s increased contribution at 6.62 per cent to the gross domestic product (GDP) in the fiscal year 2009-10.
"We discussed with the finance ministry officials today on the positive and negative aspects of the proposed policy that is expected to give a boost to the construction sector," one of the participants said.
In a major policy shift, the government is loosening its policy on real estate and letting foreigners buy apartments -- human-erected property -- aiming at giving momentum to the construction sector, one of the growth sectors in the recent times.
"Opening the sector for foreigners ‘to buy apartments’ is one of the ways that can make the construction sector dynamic," according to the association.
As per existing laws, a foreigner is not allowed to buy land, house or apartments in Nepal as citizenship is a must to buy such immoveable property.
Though, the market last year witnessed a boom in the construction sector in the wake of increased demand for housing and apartments, this year it has witnessed a sluggish growth. The stagnation that proves that last year’s boom was more speculative than intrinsic demand has hurt the growth of the sector that is one of the sectors with competitive advantage with the potential to create more jobs and contribution to economic growth.
Though there is rising domestic demand, according to the association, the low purchasing capacity and no option for financing has slowed down the sector's growth this year.
According to 2001 data the urban population of Nepal totaled 15 per cent and expected to reach 18 per cent by 2015 and 30 per cent by 2030.
According to the revised Housing Policy, based on the population rise, the Urban Housing shortage is expected to rise by 215,357 units every year between 2063 and 2077 (3,015,000 units total) and 1,000,000 units needs repair maintenance. "In Kathmandu valley alone, by 2020, demand of 40,300 units per year is expected," the data reveals.
Similarly, around 87.6 per cent of the total population of Nepal has their own homes, according to the Nepal Rastra Bank's Survey-2008. "Of the total urban population, 88.5 per cent have their own homes while 10 per cent live in rented homes and 1.5 per cent lives without paying rent," it said, adding that in urban areas, 36.1 per cent live in nuclear units, 59.4 per cent live in joint units and 4.3 per cent live in commercial units.
"In urban areas, 60 per cent homes are Concrete, 23.4 per cent homes are mix design and 16.6 per cent are kachhi," the Survey added.
Residential area in 'Greater Kathmandu' has increased from 13.7 per cent in 1971 to 30.6 per cent in 1981 to 46 per cent in 1991-92.
However, until the purchasing capacity of the Nepalis strengthens, the sector needs fresh capital injection to keep its momentum and allowing foreigners to buy apartments could keep the sector alive and kicking, the association added.
Construction industry has recorded 5.7 per cent growth rate in 2008-09 which is notable as compared to other sub sectors. The Central Bureau of Statistics has also predicted construction sector’s increased contribution at 6.62 per cent to the gross domestic product (GDP) in the fiscal year 2009-10.
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