NOC hikes kerosene, diesel prices by one rupee

Nepal Oil Corporation (NOC) increased the price of kerosene and diesel -- both -- by one rupee per liter making them Rs 59 per litre in the Valley. But the price in the Tarai districts will be Rs 57.70 per litre.

"The price hike will come into effective from Thursday," said the sole petroleum importer.

The NOC board meeting on Wednesday late night has decided to increase the price as it has been incurring losses in both diesel and kerosene that is the poor men's fuel.

The state-owned petroleum importer will -- after the price hike -- profit Rs 20 million in a month. Earlier, it has been losing Rs 37.5 million per month, it said.

NOC has been adjusting the prices of the petroleum products every month as last year the prices started fluctuating pushing the state-owned corporation into red.

Earlier, it had increased the price of kerosene and diesel by Rs 3 per litre on November 17. Then, both kerosene and diesel prices were hiked to Rs 58 per litre. The NOC used to make a profit of Rs 4 in a litre of kerosene after the hike, while, it incurred a loss of Rs 2.50 in a litre of diesel.

The NOC had started making profit when the downward revision of prices started in October 2008, which continued till March. But the rise in the prices of petroleum products in the international market had again hit it to bring down to knees.

Every month - on 16th as per the Roman calendar - the NOC receives a new price list for petrol, diesel from the IOC -- its sole supplier. However, on the first of every month, it receives the new price list for petrol, diesel, kerosene, Air turbine Fuel (ATF) and cooking gas.

Revenue inflow surpasses target

By the end of the seventh month this fiscal year, revenue collection surpassed the target by Rs 3.87 billion.
"By the end of Magh (mid-February) we were successful in collecting Rs 94.28 billion, surpassing our own target of Rs 90.41 billion," said finance secretary Krishnahari Baskota. In the last fiscal year, at the end of the same month the collection was Rs 72.26 billion.
"Revenue collection went up by Rs 22 billion or 30.5 per cent compared with last year's same month due to regular follow-up, policy direction and incentives to revenue officials," he said adding that the ministry was also able to control leakages with the establishment of 64 new Border Out Posts (BOP).
"In the 17 Tarai districts, the chief district officers (CDOs) have been directed to review the customs patrolling every 15 days apart from ready flying sqauds that operate on the direction of 24-hour control room," Baskota said. "The ministry was also successful in making companies put stickers on tobacco products and beer factories also installed the flow-metre to check the leakage."
Of the total collection, Value Added tax (VAT) was at highest ever at around Rs 29 billion followed by customs at around Rs 19 billion. Income tax collection came to around Rs 17 billion, whereas collection from excise came to around Rs 13 billion. The government has by the end of the seventh month collected around Rs 11.5 billion under non-tax, around Rs 3.5 billion under registration fee and around Rs 2 billion under vehicles tax.
It was able to increase revenue collection in recent years after it appointed a separate secretary to look after the revenue.
This trend shows that the government will be able to collect over 20 per cent to 25 per cent revenue compared to the target. The revenue target of the government for this fiscal year -- according to the budget 2009-10 -- stands at Rs 176.5 billion.
In the next five months, the government has to collect around Rs 82.22 billion, which looks easy, if the current trend continues.

The collection

First month (Shrawan) -- Rs 11.47 billion
Second month (Bhadra) -- Rs 22.55 billion
Third month (Ashwin) -- Rs 34.32 billion
Fourth month (Kartik) -- Rs 46.67 billion
Fifth month (Mangsir) -- Rs 58.60 billion
Sixth month (Poush) -- Rs 79.68 billion
Seventh month (Magh) -- Rs 94.28 billion

10-Point carta wraps up Microfinance Summit

With a 10-point declaration, the second Microfinance Summit concluded here today.
In the closing session of the last day of the three-day summit, Centre for Microfinance president Dr Haridev Pant read out the 10-point declaration.
"In the first summit, we had targetted to bring three million people within the reach of microfinance sector by 2015," he said adding that by now 1.8 million Nepalis are involved in the sector. "We are pretty much on track," he added.
The declaration also urged various sectors to contribute to make this endeavour successful and ensure economic growth of the country in order to alleviate poverty.
The declaration also stated that in order to bring about national development, the microfinance sector should be given priority as a primary sector. Microfinance is the only tool to uplift the life standards of the poor. He also requested for a reduction in taxes as the tax on microfinance institutions is as high as that for commercial banks.
The summit also requested the Finance Ministry to support it in inclusive economic development. "Microfinance institutions have been facing problems due to conflict in the Tarai region," it said. Mountainous and hilly regions are yet at a low reach from the sector due to geographical reasons and high costs.
Former finance ministers Dr Ram Sharan Mahat and Bharat Mohan Adhikari also took part in the last session held today.
The summit also requested Nepal Rastra Bank (NRB) for a microfinance policy that would allow the sector to mobilise deposite as it has been facing resource crunch. The sector is also looking to form a unified network to promote its concerns via advocacy and deliberations.
Some 722 people involved with microfinance took part in the second edition of the Microfinance Summit, where 19 working papers were presented. It also reviewed the progress made in the field after the first summit. The third Summit will be held in 2013.

Prices resume upward climb

Prices have again starting ascending, thanks to a whopping rise in the price of sugar and sugar related products, pulses, spices, vegetables and meat.
"Year on year (y-o-y) inflation, as measured by the consumer price index (CPI), moderated to 11.8 per cent in mid-January," said Nepal Rastra Bank, the central authority. It had moderated to 11.3 per cent in mid-December.
Though the central bank in its report for the sixth month price analysis said that the CPI moderated to 11.8 per cent against a 14.4 per cent increase in the same period last year. "The price index of food and beverages group increased by 18.1 per cent whereas the index of non-food and services group rose only by 4.5 per cent," said the report.
The index of food and beverages and non-food and services group had risen by 18.3 per cent and 10.3 per cent respectively in the same period last year. Of the items in food and beverage group, price indices of sugar and sugar related products had the highest increased rate of 77.5 per cent against an increase of 37.3 per cent in the same period last year.
Similarly, the price indices of pulses, spices, vegetables and fruits as well as meat, fish and eggs sub-groups increased by 36.7 per cent, 34.8 per cent, 29.2 and 22.8 per cent, respectively against an increase of 25.6 per cent, 8.1 per cent, 13.3 per cent and 22.5 per cent in the same period last year.
The index of grains and cereal products subgroup also witnessed an increment of 11.7 per cent compared to 16.5 per cent increase in the same month last year. "Within the group of non-food and services, the index of tobacco and related products has the highest increased rate of by 11.6 per cent compared to a rise of 15.1 per cent during the same period last year," said NRB. However, the price index of transport and communication declined by 7.5 per cent in the review period. It had increased by 20.7 per cent during the same period last year.
Region-wise, according to price index the Terai is the most expensive place to live in as it rose by 12.5 per cent followed by 11.8 per cent in Hills and 10.6 per cent in Kathmandu Valley. The respective rates were 13.6 per cent, 14.2 per cent and 15.8 per cent last year.
In the review period, the y-o-y core inflation rose to 12.6 per cent, a moderation from 13.2 per cent a year ago.
Wholesale prices under the agricultural commodities group, the price index of cash crops, increased by a whopping 64.7 per cent against a decline of 7.7 per cent a year ago. The price index of spices, pulses and livestock production increased by 50.3 per cent, 34 per cent and 33.8 percent, respectively as compared to an increase of 7.2 per cent, 20 per cent and 27.9 per cent respectively during the same period last year. Within the group of domestic manufactured commodities, the price index of food-related products increased by 15.1 per cent as compared to a rise of 12 per cent a year ago.
Within the imported commodities group, the price indices of chemical fertilizers and chemical goods declined by 11.9 percent in the review period as compared to an increase of 8.3 per cent in the corresponding period of previous year.

Bhattarai for expanding rural access to finance, says no to donors prescription

Former finance minister and vice-chairman of the Unified Nepal Communist Party of Nepal (Maoist) Dr Baburam Bhattarai today said that the government must bring its own policy to expand access to finance in the rural areas. "The prescriptions from the donors won't work," he said.
Addressing the second Microfinance Summit here, he stressed on institutional investment for rural farmers and small entrepreneurs. The policy should focus on women as there is a rare incident of default by women entrepreneurs, he said adding that the policy should focus on indigenous, dalits and janajatis and extend their reach to finance. "There is no alternative to enabling the lower strata of society through microfinance to uplift their living standards," he said.
He also urged enough research on microfinance and target groups before starting any programmes for them. "Instead of depending on foreign jobs and consumption, we should focus on savings and production to develop an independent economy," he added. "There is no option other than enabling people through microfinance for the socio-economic transformation of society."
"Half of the total population has no access to formal financial channels," Mercy Corps deputy director Sanjaya Karki said, presenting his paper on 'Microfinannce in value chain'. Due to lack of access to formal financial channels, the majority of the rural populace still has to depend on local merchants, he said adding that these merchants charge higher interest rates.
Instead, the farmers are benefitting from microfinance, Karki said adding that Agriculture Development Bank and credit and cooperatives are giving service through price value chain.
Senior Programme Officer of GTZ-Include, Roshan Shrestha said the price value chain would be more effective if cooperatives involved in production and processing, implement it. Presenting his paper on 'Business Model for Value Chain finance through cooperatives,' he said that cooperatives can be more effective. The cooperative invloved in production can paly a role of bridge between the small producers and finance companies and help price-value chain, he said. "But there should be legal provision. Except lending, cooperatives can also help the target groups by serching for them new markets and training them," he added.
Commenting on the papers, Dr Purushottam Shrestha, CEO of NNMB, said that the central bank and the government have neglected the microfinance sector. "The government that talks about poverty alleviation has not said a single word in the budget about microfinance," he complained.
Saliya Ranasinghe, consultant, said that the small farmers might have also been cheated in the microfinance.
The second day of the Microfinance Summit 2010 also saw various working papers and the participants actively discussed the papers. Graham A N Wright, director of Micro save; Megha Raj Gajurel, senior manager at RMDC; Ralf Radeermacher, director at Micro Insurance Academy and Anurag Mishra of Standard Chartered bank also presented their papers.

MY CG to be first DTH in Nepal sky

My CG -- mero manoranjanko direct connection -- is planning to start Direct to Home (DTH) satellite television service by the end of June.
"In the first phase, we'll offer 60 channels," said Nir Shah, chairman of CG Techno Dreams -- a new venture of Chaudhary Group (CG) that is planning to invest Rs 1 billion. This is the huge investment from private sector in the television sector.
"In the second phase, we'll offer 30 more channels," he said adding that it will make a total of 90 channels but 25 per cent of the channels will be in Nepali language.
Though the government has licenced five companies to operate DTH satellite television service in Nepal by setting up their own hub stations, CG Techno Dreams is upbeat due to its chairman. The veteran actor and the man who master-minded Nepal Television (NT) thinks that at one point of time, the television world will be completely digital and satellite-based.
"DTH offers better quality picture than cable TV," said Shah adding, "because it offers stereophonic sound effects and can also reach remote areas."
The way DTH reaches a consumer's home is also different from the way cable TV does. "In DTH, TV channels would be transmitted by the satellite to a small dish antenna mounted on the window or rooftop of the subscriber's home. So the broadcaster directly connects to the user," he added.
Middlemen like local cable operators are not there in the picture. "Consumer will have multiple choices," he said adding that they can choose the channels they want to watch and pay accordingly.
"CG Techno Dreams -- apart from TV network -- also offers multi-facility for its consumers that is a complete package of information, recreation and communication," said Shah, who is starting a new innings in the TV world with CG Techno Dreams.

How it works
KATHMANDU: KATHMANDU: DTH stands for Direct-To Home Television. DTH is defined as the reception of satellite programmes with a personal dish In an individual home. DTH doses away with the need for the local cable operator and puts the broadcaster directly In touch with the consumer. Only cable operators can receive satellite programmes and they then distribute them to individual homes. A DTH network consists of broadcasting centre, satellite, encoders, multiplexers, modulators and DTH receivers. the service provider has to lease Ku-band transponders from the satellite. The encoder converts the audio, video and data signals into the digital format and the multiplexer mixes these signals. At the user end, there will be a small dish antenna and Set-Top Boxes to decode and view numerous channels. On the user's end, receiving dishes can be as small as 45 cm in diameter. DTH is an encrypted transmission that travels to the consumer directly through a satellite. DTH transmission is received directly by the consumer at his end through the small dish antenna. A Set-Top Box, unlike the regular cable connection, decodes the encrypted transmission.

Microfinance Act in offing, to get more teeth

Nepal Rastra Bank (NRB) has prepared a Microfinance Act. NRB acting governor Krishna Bahadur Manandhar during the opening of second Microfinance Summit said that these institutions are getting tremendous success that banks have not been able to get in the last seven decades.
He also urged microfinance institutions to expand their horizon from the rural poor to the poorest.
Manandhar said adding that NRB may grant deposit mobilisation facility to microfinance institutions.
The second microfinance summit opened here today with the aim of uplifting people's lives through new innovations and strategies. Finance Minister Surendra Pandey inaugurated the summit by putting coins into a coin-box, here today.
FM Pandey hailed microfinance institutions for their role in poverty alleviation and urged them to expand their services across the country. "The contribution of microfinance will be included in gross domestic production (GDP)," he said urging microfinance experts to reduce interest rates and rethink the spread and period of payment.
Microfinance institutions are providing services to over 1.8 million poor and disadvantaged families around the country, said summit coordinator Dr Harihar Dev Pant. Microfinance service started in Nepal during 1975-76 from a small farmer project but it has grown rapidly after 1990. "There are many challenges in service expansion due to financial and technical reasons," he said adding that because of these reasons the cost of operation of MFs has also gone up.
Among the total 31 per cent Nepalis below the extreme poverty line, MFs are serving 20 per cent. It has been an effective tool for poverty reduction.
"Regrettably, the government has adopted an indifferent attitude towards the development of these institutions," Dr Pant said adding that these institutions should not be taxed at par with commercial banks. "Though the central bank has helped the sector grow, NRB should revise its policy towards microfinance institutions."
Philipp Kruschel, Senior Advisor of German Technical Corporation (GTZ) Include, expressed disappointment at the reduced productivity of the industrial sector due to political interference and energy shortage. He, however, expressed happiness at the progress made in microfinance sector in the recent past. "Microfinance institutions should lead the way to develop small and medium scale industries," he said.
Discussions on 11 papers were concluded on the first day of the summit. Ganesh Bahadur Thapa, chairman of Center for Microfinance, presented a paper on inclusive economic growth while Naresh Shrestha presented a paper on socio-economic part of microfinance institutions. Other papers presented were about good governance, government's role in microfinance development, sustainable microfinance and difference between individual and group lending.