June 17
Govt proposes revised rebidding to ADB (eKantipur.com)
Manakamana Cable car: country's pride (eKantipur.com)
Nepal bags Destination Travel Award from ITE HK (Nepalbiznews.com)
June 18
Pashmina suffers identity crisis after years of trade (eKantipur.com)
NAC cancels bid for Boeing lease (eKantipur.com)
Farmers demand 11 tea refineries in Ilam (eKantipur.com)
Private dairies flay DDC over milk price (eKantipur.com)
Declare tourism industry as a national industry: NATO (Nepalbiznews.com)
Entrepreneurs urge for Nepali products’ logo (Nepalbiznews.com)
Minister Yami intent on appeasing ADB, says govt. would fulfill all its conditions
June 19
Nepal Samachar- patra suspends publication (eKantipur.com)
Depreciating dollar hits remittance, exports (eKantipur.com)
Private airlines to build hangars at TIA (eKantipur.com)
NPC prepares interim plan (Nepalnews.com)
June 20
Yami's ambitious infrastructure plan (eKantipur.com)
Govt to ask ADB to extend Melamchi loan (eKantipur.com)
Additional state support for Nepali workers soon (eKantipur.com)
Govt approves SEZ Act (eKantipur.com)
Is the stock market awaiting meltdown? (eKantipur.com)
Parliament asked to investigate loan defaulters (eKantipur.com)
‘Involve private sector in infrastructure’ (eKantipur.com)
June 21
Nepali firms to go multinational (eKantipur.com)
ADB extending Melamchi loan (eKantipur.com)
$169,000 aid for micro hydro project (eKantipur.com)
Nepal to sign labor pact with Malaysia, UAE (eKantipur.com)
Biratnagar customs take improves (eKantipur.com)
Germany to provide €22m grant for health and energy sectors (Nepalbiznews.com)
June 22
Interim Plan to invest Rs 587 billion (ekantipur.com)
Deposit collection soars by 10 pc (ekantipur.com)
Cabinet endorses NT's 15 pc divestment plan (ekantipur.com)
June 23
DDC asked to raise prices, Govt for single price of milk (ekantipur.com)
Govt agrees to hike salary of employees (Nepalbiznews.com)
(Nepalnews.com)
Sunday, June 24, 2007
Interim Plan to invest Rs 587 billion
Interim Plan to invest Rs 587 billion
eKantipur.com, 22-Jun-2007
BY PREM KHANAL
The three-year Interim Plan that will be implemented from the coming fiscal year aims to spend Rs 587.7 billion on development activities to achieve an average 5.5 percent economic growth and lower incidence of poverty by seven percentage points to 24 percent.
Likewise, the plan also aims to increase per capita income by 3.3 percent on annual average and set a target of limiting inflation to 5.6 percent during the plan period.
According to a copy of draft concept paper of the plan obtained by the Post, the plan also targets to achieve average annual growth of 3.6 percent for the agriculture sector and 6.5 percent for non-agriculture sector.
To achieve the targets, the government is planning to invest 28.84 percent (Rs 169.49 billion) of the total planned expenditure while the remaining amount is expected to come from the private sector. The private sector is estimated to invest Rs 418.19 billion during the three-year period that will end in the fiscal year.
Of the total government's development expenditure, 87.68 percent will be spent on non-agriculture sector. With an estimated expenditure of 26.07 percent of the total, transportation and communication sector is expected to be the largest absorber of government investment.
Similarly, community sector will get 20.38 percent while electricity, gas and water sector is expected to attract 18.97 percent. Education sector will receive 18.25 percent while health is allotted 7.32 percent.
However, the government's total expenditure, including recurrent expenditure, is estimated to remain Rs 493.38 billion during the plan period. The recurrent expenditure, which mainly finances salaries of government employees, security expenditure and interest of loans, among others, is expected to absorb 55.28 percent (Rs 272.72 billion) of the total expenditure.
Likewise, capital expenditure that mainly deals with the expenditure related to development activities is likely to be second largest absorber (Rs 175.28 billion or 35.53 percent of the total) followed by the principal repayment of loans (9.20 percent).
Of the expected sources of financing, revenue will be financing Rs 312.53 billion (63.35 percent) while foreign assistance Rs 133.54 billion (27.07 percent) and internal loan Rs 47.3 billion (9.59 percent).
The plan, which is being implemented with the main purpose of providing the feeling of change to common people by lowering existing level of unemployment and poverty, has focused its main emphasis in restoration of peace, reconstruction and rehabilitation.
Likewise, preparation of economic basis based on inclusive employment opportunities, promotion of peace and good governance, increment of investments in infrastructure development, acceleration of development activities with policy of social inclusion and targeted programs are major strategies of the plan.
eKantipur.com, 22-Jun-2007
BY PREM KHANAL
The three-year Interim Plan that will be implemented from the coming fiscal year aims to spend Rs 587.7 billion on development activities to achieve an average 5.5 percent economic growth and lower incidence of poverty by seven percentage points to 24 percent.
Likewise, the plan also aims to increase per capita income by 3.3 percent on annual average and set a target of limiting inflation to 5.6 percent during the plan period.
According to a copy of draft concept paper of the plan obtained by the Post, the plan also targets to achieve average annual growth of 3.6 percent for the agriculture sector and 6.5 percent for non-agriculture sector.
To achieve the targets, the government is planning to invest 28.84 percent (Rs 169.49 billion) of the total planned expenditure while the remaining amount is expected to come from the private sector. The private sector is estimated to invest Rs 418.19 billion during the three-year period that will end in the fiscal year.
Of the total government's development expenditure, 87.68 percent will be spent on non-agriculture sector. With an estimated expenditure of 26.07 percent of the total, transportation and communication sector is expected to be the largest absorber of government investment.
Similarly, community sector will get 20.38 percent while electricity, gas and water sector is expected to attract 18.97 percent. Education sector will receive 18.25 percent while health is allotted 7.32 percent.
However, the government's total expenditure, including recurrent expenditure, is estimated to remain Rs 493.38 billion during the plan period. The recurrent expenditure, which mainly finances salaries of government employees, security expenditure and interest of loans, among others, is expected to absorb 55.28 percent (Rs 272.72 billion) of the total expenditure.
Likewise, capital expenditure that mainly deals with the expenditure related to development activities is likely to be second largest absorber (Rs 175.28 billion or 35.53 percent of the total) followed by the principal repayment of loans (9.20 percent).
Of the expected sources of financing, revenue will be financing Rs 312.53 billion (63.35 percent) while foreign assistance Rs 133.54 billion (27.07 percent) and internal loan Rs 47.3 billion (9.59 percent).
The plan, which is being implemented with the main purpose of providing the feeling of change to common people by lowering existing level of unemployment and poverty, has focused its main emphasis in restoration of peace, reconstruction and rehabilitation.
Likewise, preparation of economic basis based on inclusive employment opportunities, promotion of peace and good governance, increment of investments in infrastructure development, acceleration of development activities with policy of social inclusion and targeted programs are major strategies of the plan.
Biratnagar customs take improves
Biratnagar customs take improves
eKantipur.com, 21-Jun-2007
Revenue collection of Biratnagar customs office has improved significantly after revenue flying squad intensified patrol, sudden raids and site inspections, bringing down incidence of revenue leakage.
The customs office said it is presently collecting revenue worth Rs 1 million a day, whereas its daily collection used stand barely at Rs 150,000 till May end.
Revenue Investigation Department had mobilized a special flying squad to control smuggling and revenue leakage after Customs Department disclosed that Biratnagar customs office was missing monthly collection target by Rs 150 million due to rise in illicit trade.
The customs office has reported that the revenue collection grew simply because sudden raids and site inspections by the squad have resulted in a dramatic decline in cross-border smuggling.
Owing to the rise in revenue collection, the customs office has said it has achieved the annual collection target within the 11 months of the fiscal year.
eKantipur.com, 21-Jun-2007
Revenue collection of Biratnagar customs office has improved significantly after revenue flying squad intensified patrol, sudden raids and site inspections, bringing down incidence of revenue leakage.
The customs office said it is presently collecting revenue worth Rs 1 million a day, whereas its daily collection used stand barely at Rs 150,000 till May end.
Revenue Investigation Department had mobilized a special flying squad to control smuggling and revenue leakage after Customs Department disclosed that Biratnagar customs office was missing monthly collection target by Rs 150 million due to rise in illicit trade.
The customs office has reported that the revenue collection grew simply because sudden raids and site inspections by the squad have resulted in a dramatic decline in cross-border smuggling.
Owing to the rise in revenue collection, the customs office has said it has achieved the annual collection target within the 11 months of the fiscal year.
Govt approves SEZ Act
Govt approves SEZ Act
eKantipur.com, 20-Jun-2007
BY MILAN MANI SHARMA
After years of debate, the government has finally endorsed the Special Economic Zone (SEZ) Act, incorporating better tax incentives and flexible labor provisions for entrepreneurs in the zone.
The Act would soon be forwarded to the House of Representatives for enactment, said acting Industry Secretary Purushottam Ojha.
Referring to provisions of the Act, Ojha told the Post that it upholds three broader principles: incentives to industries, one-spot service and labor flexibility.
The Act treats SEZ as a land where other domestic laws related to labor and industries would not be applicable. It has mooted an autonomous SEZ Authority to oversee its operations.
The Act, however, is still weak on labor related provisions, said officials involved in the formulation of Act, adding that provisions to tighten 'labor indiscipline' proposed initially has been diluted in the approved Act.
Nevertheless, while allowing workers to unite and practice collective bargaining, it prohibits workers from undertaking activities that affect production and normal operations of industries.
The Act allows entrepreneurs to hire workers on contract basis. “Terms of recruitment, facilities and lay off would be governed by the agreement the worker and management would sign while accepting the job.”
Initially, officials had pushed for 'hire and fire' provision as demanded by entrepreneurs.
The Act says that facilities for workers in the SEZ should be better than what workers receive outside of the zone. “SEZ Authority will see that workers pay scale, medical and insurance facilities are better than others,” reads the Act.
In order to lure investors in SEZ, the government has decided to provide them with facilities such as duty-free import of raw materials, exemption of value added tax (VAT) and free them from excise duty and other local taxes.
“The industries in SEZ will be provided with income tax holiday for five years,” says the Act. After five years also, they would be provided with 50 percent discount on income tax.
In order to ensure investment guarantee, the Act says industries already into operation would continue to enjoy all the facilities, even if later amendments changed the structure and extent of facilities.
Going by the Act, only export-oriented industries can be set up in SEZ. Nevertheless the government has allowed them to make domestic sales not exceeding 15 percent of their transactions.
SEZ Authority, to be led by an independent expert, would initially lease the land in SEZ for 30 years. Also, 50 percent, 40 percent and 25 percent discounts will be provided on lease rent for the first three years of investment. After 30 years, lease agreement can be renewed in every 5 years.
The Act has asked SEZ Authority to provide one-spot services so that foreign and domestic investors would not have to take the trouble of approaching different government offices.
The vision of the Act is to provide services like visa, visa renewal, logistics and other facilities through a special office of SEZ Authority.
eKantipur.com, 20-Jun-2007
BY MILAN MANI SHARMA
After years of debate, the government has finally endorsed the Special Economic Zone (SEZ) Act, incorporating better tax incentives and flexible labor provisions for entrepreneurs in the zone.
The Act would soon be forwarded to the House of Representatives for enactment, said acting Industry Secretary Purushottam Ojha.
Referring to provisions of the Act, Ojha told the Post that it upholds three broader principles: incentives to industries, one-spot service and labor flexibility.
The Act treats SEZ as a land where other domestic laws related to labor and industries would not be applicable. It has mooted an autonomous SEZ Authority to oversee its operations.
The Act, however, is still weak on labor related provisions, said officials involved in the formulation of Act, adding that provisions to tighten 'labor indiscipline' proposed initially has been diluted in the approved Act.
Nevertheless, while allowing workers to unite and practice collective bargaining, it prohibits workers from undertaking activities that affect production and normal operations of industries.
The Act allows entrepreneurs to hire workers on contract basis. “Terms of recruitment, facilities and lay off would be governed by the agreement the worker and management would sign while accepting the job.”
Initially, officials had pushed for 'hire and fire' provision as demanded by entrepreneurs.
The Act says that facilities for workers in the SEZ should be better than what workers receive outside of the zone. “SEZ Authority will see that workers pay scale, medical and insurance facilities are better than others,” reads the Act.
In order to lure investors in SEZ, the government has decided to provide them with facilities such as duty-free import of raw materials, exemption of value added tax (VAT) and free them from excise duty and other local taxes.
“The industries in SEZ will be provided with income tax holiday for five years,” says the Act. After five years also, they would be provided with 50 percent discount on income tax.
In order to ensure investment guarantee, the Act says industries already into operation would continue to enjoy all the facilities, even if later amendments changed the structure and extent of facilities.
Going by the Act, only export-oriented industries can be set up in SEZ. Nevertheless the government has allowed them to make domestic sales not exceeding 15 percent of their transactions.
SEZ Authority, to be led by an independent expert, would initially lease the land in SEZ for 30 years. Also, 50 percent, 40 percent and 25 percent discounts will be provided on lease rent for the first three years of investment. After 30 years, lease agreement can be renewed in every 5 years.
The Act has asked SEZ Authority to provide one-spot services so that foreign and domestic investors would not have to take the trouble of approaching different government offices.
The vision of the Act is to provide services like visa, visa renewal, logistics and other facilities through a special office of SEZ Authority.
Yami's ambitious infrastructure plan
Yami's ambitious infrastructure plan
eKantipur.com, 20-Jun-2007
Minister for Physical Planning and Works Hisila Yami unveiled a "Vision Document" on Wednesday, setting out ambitious targets for massive expansion of road, water and sanitation and housing infrastructure in the country.
According to the document, which has set targets for the next one, three and 20 years, all settlements in the hills and plains will have road access at a walking distance of not more than four hours and two hours respectively by the next 20 years; the country's population will have cent percent access to drinking water by 2017; and all people will have concrete houses by the next 20 years. "My ministry arrived at this vision document through intensive discussion, and we will implement it," said Yami, talking to the Post.
12 district HQs to have roads in 3 yrs
The document has set a deadline of three years for connecting 12 more district headquarters by roads. The districts are Jajarkot, Manang, Mustang, Diktel, Solukhumbu, Dolpa, Mugu, Humla, Bajura, Bajhang, Bhojpur and Sankhuwasabha. Within the deadline, the government will also build "with priority" the Shahid Marg from Ghorahi to Thawang in Rolpa district.
Two railways, one from Birgunj to Haldiya via Raxaul-Calcutta, and the other from Birgunj to Katihar via Raxaul, will also be built by this time, Yami said. Additionally, at least 10 transit corridor points with China and 22 with India will be developed. The 1,700-km mid-hill highway will also be developed during this period.
In Kathmandu, the inner ring road will be built, study and design for an outer ring road will be completed, and several corridors, including Bagmati, Bishnumati, Manahara and Dhobikhola corridors will be built. The ministry will repair 4,200 kilometers of existing roadway in one year alone.
Drinking water for all by 2017
While targeting completion of Melamchi project on time, the ministry has said it will promote rainwater harvesting at the household level in Kathmandu.
In one year, some 350,000 people will be provided basic drinking water through completion of some 80 ongoing projects, while an additional 145,000 people will be provided quality drinking water through completion of another 10 projects under Small Town Drinking Water and Sanitation Program.
Similarly, with construction of water treatment plants in Dhulabari and Gauradaha in Jhapa, and Mangad in Morang, 65,000 more people will be supplied quality drinking water.
Meanwhile, in the next three years, 1.6 million Nepalis will be supplied with basic drinking water through completion of 269 projects; 415,000 Nepalis will be supplied quality water in small towns; while another 700,000 people in 21 districts will be supplied basic drinking water. Within this period, an additional 2.5 million people will have access to sanitation facilities.
By 2017, the government plans to provide cent percent access to drinking water to the country's population.
Concrete houses for all in 20 yrs
By the next three years, 15 model villages will be developed in the country, while 4,000 low-cost houses will be distributed to poor families. Settlements will be arranged for all squatters and Kamaiyas within this period.
Meanwhile, in the next 20 years, satellite towns will be developed around Kathmandu Valley to ease population density here. By this time, all people will be settled in concrete houses through implementation of a National Housing Plan.
eKantipur.com, 20-Jun-2007
Minister for Physical Planning and Works Hisila Yami unveiled a "Vision Document" on Wednesday, setting out ambitious targets for massive expansion of road, water and sanitation and housing infrastructure in the country.
According to the document, which has set targets for the next one, three and 20 years, all settlements in the hills and plains will have road access at a walking distance of not more than four hours and two hours respectively by the next 20 years; the country's population will have cent percent access to drinking water by 2017; and all people will have concrete houses by the next 20 years. "My ministry arrived at this vision document through intensive discussion, and we will implement it," said Yami, talking to the Post.
12 district HQs to have roads in 3 yrs
The document has set a deadline of three years for connecting 12 more district headquarters by roads. The districts are Jajarkot, Manang, Mustang, Diktel, Solukhumbu, Dolpa, Mugu, Humla, Bajura, Bajhang, Bhojpur and Sankhuwasabha. Within the deadline, the government will also build "with priority" the Shahid Marg from Ghorahi to Thawang in Rolpa district.
Two railways, one from Birgunj to Haldiya via Raxaul-Calcutta, and the other from Birgunj to Katihar via Raxaul, will also be built by this time, Yami said. Additionally, at least 10 transit corridor points with China and 22 with India will be developed. The 1,700-km mid-hill highway will also be developed during this period.
In Kathmandu, the inner ring road will be built, study and design for an outer ring road will be completed, and several corridors, including Bagmati, Bishnumati, Manahara and Dhobikhola corridors will be built. The ministry will repair 4,200 kilometers of existing roadway in one year alone.
Drinking water for all by 2017
While targeting completion of Melamchi project on time, the ministry has said it will promote rainwater harvesting at the household level in Kathmandu.
In one year, some 350,000 people will be provided basic drinking water through completion of some 80 ongoing projects, while an additional 145,000 people will be provided quality drinking water through completion of another 10 projects under Small Town Drinking Water and Sanitation Program.
Similarly, with construction of water treatment plants in Dhulabari and Gauradaha in Jhapa, and Mangad in Morang, 65,000 more people will be supplied quality drinking water.
Meanwhile, in the next three years, 1.6 million Nepalis will be supplied with basic drinking water through completion of 269 projects; 415,000 Nepalis will be supplied quality water in small towns; while another 700,000 people in 21 districts will be supplied basic drinking water. Within this period, an additional 2.5 million people will have access to sanitation facilities.
By 2017, the government plans to provide cent percent access to drinking water to the country's population.
Concrete houses for all in 20 yrs
By the next three years, 15 model villages will be developed in the country, while 4,000 low-cost houses will be distributed to poor families. Settlements will be arranged for all squatters and Kamaiyas within this period.
Meanwhile, in the next 20 years, satellite towns will be developed around Kathmandu Valley to ease population density here. By this time, all people will be settled in concrete houses through implementation of a National Housing Plan.
Sunday, June 17, 2007
Roundup of Economic & Business News (Jun 9 - Jun 16)
June 9
Nepal Federation of Indigenous Nationalities (NEFIN) calls off banda (eKantipur.com)
Stock brokers: Making hay while sun shines (eKantipur.com)
NEPSE posts impressive growth (eKantipur.com)
Hetauda Cement Factory (HCF) resumed production (eKantipur.com)
Inland Revenue Office (IRO) to miss revenue target (eKantipur.com)
June 10
Interview - Jhapat Vohra, Chairman&MD, Malika Development Bank (eKantipur.com)
NIBL opens 16th branch, DCBL opens 2nd branch, Kumari Bank opens 8th branch
Trade deficit continuous to widen: NRB (Nepalbiznews.com)
Labour MoU with UAE to be signed in July (Nepalnews.com)
June 11
Notification delay stalls camouflage cloth import (eKantipur.com)
JTMM-Goit seizes 435 bighas of land in Saptari (Nepalnews.com)
June 12
GDP per capita up 8.8pc (eKantipur.com)
NAC cancels engine overhaul tender (eKantipur.com)
Nepal pushes for trade preference in China (eKantipur.com)
Another industry packs up (eKantipur.com)
Paradise-II colony under development, IME completes 5 years (eKantipur.com)
Strike by landless people partially affects life (Nepalbiznews.com)
Remittance growth plummets (Nepalnews.com)
June 13
‘Company Act to be revised soon’ (eKantipur.com)
Airfares on Ktm-Delhi route up (eKantipur.com)
Govt appoints Poverty Alleviation Fund (PAF) board members (eKantipur.com)
June 14
ADB positive on Melamchi, Asks govt to suggest options (eKantipur.com)
15m euros EU aid for renewable energy (eKantipur.com)
Stock market plummets (eKantipur.com)
IMF to disburse US$ 16m under PRGF (eKantipur.com)
June 15
Locals encircle Marsyangdi hydro (eKantipur.com)
National park revenues dwindle (eKantipur.com)
Unregistered drugs continue to flood market (eKantipur.com)
June 16
NEA's unpaid account rises to Rs 780 million (eKantipur.com)
Nepse scales to 15.89 points (Nepalbiznews.com)
(eKantipur.com)
Nepal Federation of Indigenous Nationalities (NEFIN) calls off banda (eKantipur.com)
Stock brokers: Making hay while sun shines (eKantipur.com)
NEPSE posts impressive growth (eKantipur.com)
Hetauda Cement Factory (HCF) resumed production (eKantipur.com)
Inland Revenue Office (IRO) to miss revenue target (eKantipur.com)
June 10
Interview - Jhapat Vohra, Chairman&MD, Malika Development Bank (eKantipur.com)
NIBL opens 16th branch, DCBL opens 2nd branch, Kumari Bank opens 8th branch
Trade deficit continuous to widen: NRB (Nepalbiznews.com)
Labour MoU with UAE to be signed in July (Nepalnews.com)
June 11
Notification delay stalls camouflage cloth import (eKantipur.com)
JTMM-Goit seizes 435 bighas of land in Saptari (Nepalnews.com)
June 12
GDP per capita up 8.8pc (eKantipur.com)
NAC cancels engine overhaul tender (eKantipur.com)
Nepal pushes for trade preference in China (eKantipur.com)
Another industry packs up (eKantipur.com)
Paradise-II colony under development, IME completes 5 years (eKantipur.com)
Strike by landless people partially affects life (Nepalbiznews.com)
Remittance growth plummets (Nepalnews.com)
June 13
‘Company Act to be revised soon’ (eKantipur.com)
Airfares on Ktm-Delhi route up (eKantipur.com)
Govt appoints Poverty Alleviation Fund (PAF) board members (eKantipur.com)
June 14
ADB positive on Melamchi, Asks govt to suggest options (eKantipur.com)
15m euros EU aid for renewable energy (eKantipur.com)
Stock market plummets (eKantipur.com)
IMF to disburse US$ 16m under PRGF (eKantipur.com)
June 15
Locals encircle Marsyangdi hydro (eKantipur.com)
National park revenues dwindle (eKantipur.com)
Unregistered drugs continue to flood market (eKantipur.com)
June 16
NEA's unpaid account rises to Rs 780 million (eKantipur.com)
Nepse scales to 15.89 points (Nepalbiznews.com)
(eKantipur.com)
Saturday, June 16, 2007
GDP per capita up 8.8 percent
GDP per capita up 8.8 percent
eKantipur.com, 12-Jun-2007
Despite deepening economic sluggishness, per capita income in Nepali rupee terms increased by 8.8 percent to Rs 27,209 in the current fiscal year 2006/07 - thanks to continued healthy remittance income, which is expected to cross the Rs 100 billion mark this year.
Similarly, per capita GDP (Gross Domestic Product) in dollar terms increased to US$ 383 from last year's US$ 350, a 9.4 percent increment which is much higher than the annual average population growth rate of 2.25 percent.
According to the national accounts for fiscal year 2006/07 prepared by the Central Bureau of Statistics and circulated among top government officials, the overall economy of the country is estimated to expand by 2.29 percent to Rs 486.84 billion (US$ 6.85 billion when calculated at an annual average exchange rate of Rs 71.06 per dollar) at constant prices of 2000/01.
The expected GDP growth for the current fiscal year is less than half the targeted rate. The government had set a target of achieving 5 percent GDP growth this year.
In addition, given the growth rate estimate for this year, which is also the last fiscal year of the Tenth Plan, the average growth of the plan period remained 3.3 percent, as low as nearly half the targeted growth rate.
However, at current prices that also accommodate annual inflation, the size of the economy is expected to touch Rs 670.6 billion (US$ 9.4 billion), which is 11.1 percent more than the size of economy last year.
Among the major sectors in the national accounts, which were re-categorized into 15 sub-groups with 2000/01 as a new base, the agricultural sector, which contributes 34 percent to the national economy, increased by a mere 0.7 percent mainly due to erratic monsoon. The growth in fact is the lowest in the last five years.
Likewise, the non-agriculture sector is expected to grow by 3.6 percent, one percentage point less than last year's 4.6 percent. Among the major sub-sectors of the non-agriculture sector, industry grew by 2.2 percent while the services sector went up by 4.1 percent.
eKantipur.com, 12-Jun-2007
Despite deepening economic sluggishness, per capita income in Nepali rupee terms increased by 8.8 percent to Rs 27,209 in the current fiscal year 2006/07 - thanks to continued healthy remittance income, which is expected to cross the Rs 100 billion mark this year.
Similarly, per capita GDP (Gross Domestic Product) in dollar terms increased to US$ 383 from last year's US$ 350, a 9.4 percent increment which is much higher than the annual average population growth rate of 2.25 percent.
According to the national accounts for fiscal year 2006/07 prepared by the Central Bureau of Statistics and circulated among top government officials, the overall economy of the country is estimated to expand by 2.29 percent to Rs 486.84 billion (US$ 6.85 billion when calculated at an annual average exchange rate of Rs 71.06 per dollar) at constant prices of 2000/01.
The expected GDP growth for the current fiscal year is less than half the targeted rate. The government had set a target of achieving 5 percent GDP growth this year.
In addition, given the growth rate estimate for this year, which is also the last fiscal year of the Tenth Plan, the average growth of the plan period remained 3.3 percent, as low as nearly half the targeted growth rate.
However, at current prices that also accommodate annual inflation, the size of the economy is expected to touch Rs 670.6 billion (US$ 9.4 billion), which is 11.1 percent more than the size of economy last year.
Among the major sectors in the national accounts, which were re-categorized into 15 sub-groups with 2000/01 as a new base, the agricultural sector, which contributes 34 percent to the national economy, increased by a mere 0.7 percent mainly due to erratic monsoon. The growth in fact is the lowest in the last five years.
Likewise, the non-agriculture sector is expected to grow by 3.6 percent, one percentage point less than last year's 4.6 percent. Among the major sub-sectors of the non-agriculture sector, industry grew by 2.2 percent while the services sector went up by 4.1 percent.
Trade deficit continuous to widen: NRB
Trade deficit continuous to widen: NRB
Nepalbiznews.com, 11-Jun-2007
Due to continuous rise in imports against export, Nepal's trade deficit continues to widen, as it crossed Rs 70 billion during the first nine months of the current fiscal year 2006-07, states a recent data of Nepal Rastra Bank (NRB).
According to the macroeconomic situation report released by NRB on Sunday, total exports fell by 2.9 per cent in the first nine months, while imports registered a growth of 7.4 per cent. Total exports in the corresponding period in the previous year had risen by 9.1 per cent and a 21 per cent rise was recorded on imports.
While exports to India declined by 2.3 per cent in 2006-07 as against a significant increase of 15.4 per cent in the same period of 2005-06, exports to other countries fell by 4.2 per cent in comparison to a decline of 2.6 per cent in the preceding year.
The responsible factors for the dismal performance of the export sector included the unfriendly investment climate, worsening security situation, load shedding and the Terai bandh, among others.
The decline in exports to India was ascribed to the decline in exports of polyester yarn, cattle-feed, plastic utensils, G.I. pipes and readymade garments. Likewise, the decline in exports to other countries was due to the decline in the export of readymade garments, pashmina, woollen carpets, and handicrafts and tanned skin.
On the other hand, total imports from India increased by 9.5 per cent in the review period compared to a higher growth of 26.4 per cent in the corresponding period last year. Similarly, imports from other countries registered a rise of four per cent compared to a growth of 13.4 per cent a year earlier.
The rise in total imports during the period was attributed to the rise in imports of vehicles and spare parts, petroleum products, cold rolled sheet in coil, electrical equipment and cement, among others, from India as well as a rise in imports of crude palm oil, computer parts, chemical fertilizer, zinc ingot and medicine, among others, from other countries.
On the external front, the overall balance of payments (BoP) posted a surplus of Rs 10.79 billion in the first nine months of 2006-07. In the corresponding period of 2005-06, the BoP surplus was significant at Rs 17.15 billion.
Of this BoP surplus, the current account surplus was Rs 6.85 billion and the remaining Rs 3.94 billion emanated from the capital and financial account.
In the government budgetary operations, the total expenditure, on a cash basis, increased by 13.3 per cent to Rs 68.68 billion. Of the total government expenditure, recurrent expenditure increased by 12.7 per cent to Rs 47.76 billion, while the capital expenditure rose by 25 per cent to Rs 11.67 billion.
Increase in the allowance of government employees, expenses on the management of Maoist's army, re-establishment of the police posts accounted for the acceleration of recurrent expenditure in the review period, while a frequent Terai unrest and absence of elected representatives in local bodies accounted for deceleration in capital expenditure.
During the review period, total revenue grew by 22.2 per cent to Rs 56.65 billion compared to a growth of a mere 0.1 per cent in the previous year. Revenue collection grew on the account of adjustment in customs and excise rates, improvement in customs valuation, increased tax compliance, a rise in corporate income tax and value added tax as well as an increase in some non-tax revenue.
In the review period, the government incurred a cash budget surplus of Rs 2.50 billion in contrast to a deficit of Rs 5.99 billion in the corresponding period last year. In the review period, the government mobilised Rs 12.41 billion through borrowing, consisting domestic borrowing of Rs 10.03 billion and external borrowing of Rs 2.38 billion.
As capital expenditure did not increase as expected, the government recorded a cash reserve of Rs 16.78 billion with the NRB in the review period.
As a result of higher cash surplus with the NRB and domestic debt repayment of Rs. 3.03 billion, the net domestic financing of the government budget stood at a negative of Rs 9.78 billion in the review period.
Nepalbiznews.com, 11-Jun-2007
Due to continuous rise in imports against export, Nepal's trade deficit continues to widen, as it crossed Rs 70 billion during the first nine months of the current fiscal year 2006-07, states a recent data of Nepal Rastra Bank (NRB).
According to the macroeconomic situation report released by NRB on Sunday, total exports fell by 2.9 per cent in the first nine months, while imports registered a growth of 7.4 per cent. Total exports in the corresponding period in the previous year had risen by 9.1 per cent and a 21 per cent rise was recorded on imports.
While exports to India declined by 2.3 per cent in 2006-07 as against a significant increase of 15.4 per cent in the same period of 2005-06, exports to other countries fell by 4.2 per cent in comparison to a decline of 2.6 per cent in the preceding year.
The responsible factors for the dismal performance of the export sector included the unfriendly investment climate, worsening security situation, load shedding and the Terai bandh, among others.
The decline in exports to India was ascribed to the decline in exports of polyester yarn, cattle-feed, plastic utensils, G.I. pipes and readymade garments. Likewise, the decline in exports to other countries was due to the decline in the export of readymade garments, pashmina, woollen carpets, and handicrafts and tanned skin.
On the other hand, total imports from India increased by 9.5 per cent in the review period compared to a higher growth of 26.4 per cent in the corresponding period last year. Similarly, imports from other countries registered a rise of four per cent compared to a growth of 13.4 per cent a year earlier.
The rise in total imports during the period was attributed to the rise in imports of vehicles and spare parts, petroleum products, cold rolled sheet in coil, electrical equipment and cement, among others, from India as well as a rise in imports of crude palm oil, computer parts, chemical fertilizer, zinc ingot and medicine, among others, from other countries.
On the external front, the overall balance of payments (BoP) posted a surplus of Rs 10.79 billion in the first nine months of 2006-07. In the corresponding period of 2005-06, the BoP surplus was significant at Rs 17.15 billion.
Of this BoP surplus, the current account surplus was Rs 6.85 billion and the remaining Rs 3.94 billion emanated from the capital and financial account.
In the government budgetary operations, the total expenditure, on a cash basis, increased by 13.3 per cent to Rs 68.68 billion. Of the total government expenditure, recurrent expenditure increased by 12.7 per cent to Rs 47.76 billion, while the capital expenditure rose by 25 per cent to Rs 11.67 billion.
Increase in the allowance of government employees, expenses on the management of Maoist's army, re-establishment of the police posts accounted for the acceleration of recurrent expenditure in the review period, while a frequent Terai unrest and absence of elected representatives in local bodies accounted for deceleration in capital expenditure.
During the review period, total revenue grew by 22.2 per cent to Rs 56.65 billion compared to a growth of a mere 0.1 per cent in the previous year. Revenue collection grew on the account of adjustment in customs and excise rates, improvement in customs valuation, increased tax compliance, a rise in corporate income tax and value added tax as well as an increase in some non-tax revenue.
In the review period, the government incurred a cash budget surplus of Rs 2.50 billion in contrast to a deficit of Rs 5.99 billion in the corresponding period last year. In the review period, the government mobilised Rs 12.41 billion through borrowing, consisting domestic borrowing of Rs 10.03 billion and external borrowing of Rs 2.38 billion.
As capital expenditure did not increase as expected, the government recorded a cash reserve of Rs 16.78 billion with the NRB in the review period.
As a result of higher cash surplus with the NRB and domestic debt repayment of Rs. 3.03 billion, the net domestic financing of the government budget stood at a negative of Rs 9.78 billion in the review period.
Inland Revenue Office (IRO) to miss revenue target
IRO to miss revenue target
eKantipur.com, 9-Jun-2007
BY BINOD BHANDARI
BIRATNAGAR, June 9 - Two-and-half months of terai unrest during January to mid-March and frequent general and transportation strikes of recent days have badly hit operation of businesses and collection of revenue at Inland Revenue Office (IRO) in Biratnagar. As a result, the office is set to miss its revenue target set for the year, IRO officials told the Post.
"If the present trend of collection continued, revenue collection at the office will fall short by Rs 200 million," said Laxman Basnet, chief of Biratnagar IRO.
The government has set target at Rs 1.22 billion for the IRO for this fiscal year. The amount includes target for income tax, VAT, excise duty, tax on interest and vehicle tax. However, due to the terai unrest and bandas, the office has collected only Rs 809 million as of mid-May (10th month) of the fiscal year.
"We have to collect Rs 420 million in order to achieve our target,” said Basnet, adding that until and unless the situation improved dramatically, that seems very unlikely.
According to the report of the office, markets in Biratnagar and its vicinity have already remained closed for 150 days during the period.
eKantipur.com, 9-Jun-2007
BY BINOD BHANDARI
BIRATNAGAR, June 9 - Two-and-half months of terai unrest during January to mid-March and frequent general and transportation strikes of recent days have badly hit operation of businesses and collection of revenue at Inland Revenue Office (IRO) in Biratnagar. As a result, the office is set to miss its revenue target set for the year, IRO officials told the Post.
"If the present trend of collection continued, revenue collection at the office will fall short by Rs 200 million," said Laxman Basnet, chief of Biratnagar IRO.
The government has set target at Rs 1.22 billion for the IRO for this fiscal year. The amount includes target for income tax, VAT, excise duty, tax on interest and vehicle tax. However, due to the terai unrest and bandas, the office has collected only Rs 809 million as of mid-May (10th month) of the fiscal year.
"We have to collect Rs 420 million in order to achieve our target,” said Basnet, adding that until and unless the situation improved dramatically, that seems very unlikely.
According to the report of the office, markets in Biratnagar and its vicinity have already remained closed for 150 days during the period.
Saturday, June 09, 2007
Roundup of Economic & Business News (May 28 - Jun 8)
May 28
Water level dips at Kulekhani (eKantipur.com)
NA starts road construction (eKantipur.com)
Garment production shifting overseas (eKantipur.com)
Industrialists warn of protests (eKantipur.com)
Record high revenue growth (eKantipur.com)
Sri Lankan to resume flights (eKantipur.com)
India to triple assistance to Nepal (Nepalbiznews.com)
Tourism meet organised in London (Nepalnews.com)
Ozark Gear opens shop (Nepalnews.com)
May 29
Settle dues for normal oil supply: India (eKantipur.com)
Martelli new regional director of IFC (eKantipur.com)
ADB-N's financial cracks another time bomb: Governor (eKantipur.com)
Meager rise in overseas employment (eKantipur.com)
CDMA phone to get full mobility (Nepalbiznews.com)
Industrialists of Butwal warn of struggle against the Maoists (Nepalbiznews.com)
May 30
WB suspends funds for financial sector reform (eKantipur.com)
‘Focus on infrastructure development’ (eKantipur.com)
Nokia names authorized distributors for Nepal (eKantipur.com)
Agitating teachers and private schools sign a deal (Nepalbiznews.com)
May 31
Nepali embassy in Israel (eKantipur.com)
Repair delays to disturb NAC's operation (eKantipur.com)
MoAC demands Rs 5b budget (eKantipur.com)
Potato prices see steep climb (eKantipur.com)
Development spending sluggish (eKantipur.com)
NOC pays Rs 1b to IOC (eKantipur.com)
Parliamentary panel urges the government to form land commission (Nepalbiznews.com)
Govt. to make changes in policy of foreign employment and transport sector
June 1
Crowded city pushes banks to rural areas (eKantipur.com)
Hetauda Cement shuts down (eKantipur.com)
Govt to widen inbound facility (eKantipur.com)
NFIN called bandh cripples life across the nation (Nepalbiznews.com)
FNCCI to hold its 41st AGM (Nepalnews.com)
June 2
Labor pact with South Korea within a month (eKantipur.com)
ADB gives four options for fast track route (eKantipur.com)
June 3
NRB freezes Space Time account (eKantipur.com)
Surya Nepal, best managed company in Nepal (eKantipur.com)
June 4
We will renegotiate West Seti: Mahat (eKantipur.com)
US proposes duty-free facility (eKantipur.com)
Pashmina entrepreneurs see good prospects (eKantipur.com)
Employment in Israel, Govt requests relief for stranded workers (eKantipur.com)
Fourth SASEC meet to discuss economic cooperation (Nepalbiznews.com)
June 5
Govt lifting ban on camouflage clothing (eKantipur.com)
Imported grain jack up chicken price (eKantipur.com)
USAID to focus on vocational training (eKantipur.com)
Industrial Security Force to be formed (Nepalbiznews.com)
Entrepreneurs close down Birgunj (Nepalbiznews.com)
CNI urges dynamic and inclusive industrial policy (Nepalbiznews.com)
Media experts stress timely reform in media laws (Nepalnews.com)
June 6
NEPSE index hits all time high, Gains Rs 68b in a year (eKantipur.com)
NTA examines UTL's appeal (eKantipur.com)
Mill defers payment to farmers (eKantipur.com)
Disclose food importer names: Officials, retailers (eKantipur.com)
Govt raises milk price (eKantipur.com)
Govt. welcomes NRN's investment in hydropower: Minister Karki (Nepalbiznews.com)
Govt. to connect 1007 VDCs with phone within ten months: Mahara (Nepalbiznews.com)
Madheshi Tigers' strike hits Terai life (Nepalnews.com)
June 7
ADBL seeks to reduce non-performing loans (eKantipur.com)
Garment export falls to 60 percent in May (Nepalbiznews.com)
Eastern Taplejung faces food shortage (Nepalbiznews.com)
Govt. seeks new relation with ADB for Melamchi (Nepalbiznews.com)
Nepal-India power exchange committee meet kicks off in Kathmandu (Nepalnews.com)
Govt hands over Rs 92.5 million as salary for PLA (Nepalnews.com)
June 8
ADB seeks reform at water utility (eKantipur.com)
India to offer Nepal another 40 MWs (eKantipur.com)
FOREIGN EMPLOYMENT: Recovery rate of swindled money low (eKantipur.com)
Nepal's forex reserve hits Rs 171 billion (eKantipur.com)
Nepal Investment Bank sets up a new branch (Nepalbiznews.com)
Yami says govt ready to explore all options for reviving Melamchi (Nepalnews.com)
Bandh affects Pokhara and Janakpur (Nepalnews.com)
Japan to provide $60 m for construction of New Kawasoti Sub-station (Nepalnews.com)
(Nepalbiznews.com)
Water level dips at Kulekhani (eKantipur.com)
NA starts road construction (eKantipur.com)
Garment production shifting overseas (eKantipur.com)
Industrialists warn of protests (eKantipur.com)
Record high revenue growth (eKantipur.com)
Sri Lankan to resume flights (eKantipur.com)
India to triple assistance to Nepal (Nepalbiznews.com)
Tourism meet organised in London (Nepalnews.com)
Ozark Gear opens shop (Nepalnews.com)
May 29
Settle dues for normal oil supply: India (eKantipur.com)
Martelli new regional director of IFC (eKantipur.com)
ADB-N's financial cracks another time bomb: Governor (eKantipur.com)
Meager rise in overseas employment (eKantipur.com)
CDMA phone to get full mobility (Nepalbiznews.com)
Industrialists of Butwal warn of struggle against the Maoists (Nepalbiznews.com)
May 30
WB suspends funds for financial sector reform (eKantipur.com)
‘Focus on infrastructure development’ (eKantipur.com)
Nokia names authorized distributors for Nepal (eKantipur.com)
Agitating teachers and private schools sign a deal (Nepalbiznews.com)
May 31
Nepali embassy in Israel (eKantipur.com)
Repair delays to disturb NAC's operation (eKantipur.com)
MoAC demands Rs 5b budget (eKantipur.com)
Potato prices see steep climb (eKantipur.com)
Development spending sluggish (eKantipur.com)
NOC pays Rs 1b to IOC (eKantipur.com)
Parliamentary panel urges the government to form land commission (Nepalbiznews.com)
Govt. to make changes in policy of foreign employment and transport sector
June 1
Crowded city pushes banks to rural areas (eKantipur.com)
Hetauda Cement shuts down (eKantipur.com)
Govt to widen inbound facility (eKantipur.com)
NFIN called bandh cripples life across the nation (Nepalbiznews.com)
FNCCI to hold its 41st AGM (Nepalnews.com)
June 2
Labor pact with South Korea within a month (eKantipur.com)
ADB gives four options for fast track route (eKantipur.com)
June 3
NRB freezes Space Time account (eKantipur.com)
Surya Nepal, best managed company in Nepal (eKantipur.com)
June 4
We will renegotiate West Seti: Mahat (eKantipur.com)
US proposes duty-free facility (eKantipur.com)
Pashmina entrepreneurs see good prospects (eKantipur.com)
Employment in Israel, Govt requests relief for stranded workers (eKantipur.com)
Fourth SASEC meet to discuss economic cooperation (Nepalbiznews.com)
June 5
Govt lifting ban on camouflage clothing (eKantipur.com)
Imported grain jack up chicken price (eKantipur.com)
USAID to focus on vocational training (eKantipur.com)
Industrial Security Force to be formed (Nepalbiznews.com)
Entrepreneurs close down Birgunj (Nepalbiznews.com)
CNI urges dynamic and inclusive industrial policy (Nepalbiznews.com)
Media experts stress timely reform in media laws (Nepalnews.com)
June 6
NEPSE index hits all time high, Gains Rs 68b in a year (eKantipur.com)
NTA examines UTL's appeal (eKantipur.com)
Mill defers payment to farmers (eKantipur.com)
Disclose food importer names: Officials, retailers (eKantipur.com)
Govt raises milk price (eKantipur.com)
Govt. welcomes NRN's investment in hydropower: Minister Karki (Nepalbiznews.com)
Govt. to connect 1007 VDCs with phone within ten months: Mahara (Nepalbiznews.com)
Madheshi Tigers' strike hits Terai life (Nepalnews.com)
June 7
ADBL seeks to reduce non-performing loans (eKantipur.com)
Garment export falls to 60 percent in May (Nepalbiznews.com)
Eastern Taplejung faces food shortage (Nepalbiznews.com)
Govt. seeks new relation with ADB for Melamchi (Nepalbiznews.com)
Nepal-India power exchange committee meet kicks off in Kathmandu (Nepalnews.com)
Govt hands over Rs 92.5 million as salary for PLA (Nepalnews.com)
June 8
ADB seeks reform at water utility (eKantipur.com)
India to offer Nepal another 40 MWs (eKantipur.com)
FOREIGN EMPLOYMENT: Recovery rate of swindled money low (eKantipur.com)
Nepal's forex reserve hits Rs 171 billion (eKantipur.com)
Nepal Investment Bank sets up a new branch (Nepalbiznews.com)
Yami says govt ready to explore all options for reviving Melamchi (Nepalnews.com)
Bandh affects Pokhara and Janakpur (Nepalnews.com)
Japan to provide $60 m for construction of New Kawasoti Sub-station (Nepalnews.com)
(Nepalbiznews.com)
Nepal's forex reserve hits Rs 171 billion
Nepal's forex reserve hits Rs 171 billion
eKantipur.com, 8-Jun-2007
Propelled by continued healthy growth in remittance income, the country’s foreign currency reserve has scaled up to Rs 171.56 billion, an 11 percent increment than last year's total reserve.
The total remittance income stood at Rs 72.39 billion during the first nine months of the current fiscal year and the amount was 3 percent more than what was recorded during the same period last year. The remittance income last year was over Rs 95 billion during the fiscal year 2005/06.
According to Nepal Rastra Bank (NRB), the amount however is less than Rs 177.94 billion recorded a month ago mainly due to the a 4.44 percent appreciation of Nepalese currency against the US dollar within a month. The official exchange rate of one US dollar against the Nepali rupee was Rs 68.40 in mid-April and the rate slipped to touch Rs 65.46 within a month. According to NRB official, the accumulative appreciation of the domestic currency against the greenback has scaled up to 13.26 percent within the current fiscal year, starting in mid-July.
Among the total foreign currency reserve, the convertible currency that mainly comprises US dollar, accounted for Rs 165.64 billion, which was nearly 96.5 percent while remaining Rs 5.9 billion has been stored in the form of Indian currency.
In order to address the deepening short supply of Indian currency, the central bank has purchased Indian currency worth Rs 30.15 billon during the first ten months of the current fiscal year whereas it had purchased Rs 26.84 billion last fiscal year.
Likewise, central bank held almost 79 percent of the total foreign currency reserve, amounting Rs 134.83 billion while the commercial banks were holding the remaining Rs 36.72 billion till mid-May 2007.
Among the commercial banks, Standard Chartered Bank has the highest amount of foreign currency, amounting US$ 125 million followed by Himalayan Bank (US$ 107 million) and Nabil Bank (US$ 89 million).
eKantipur.com, 8-Jun-2007
Propelled by continued healthy growth in remittance income, the country’s foreign currency reserve has scaled up to Rs 171.56 billion, an 11 percent increment than last year's total reserve.
The total remittance income stood at Rs 72.39 billion during the first nine months of the current fiscal year and the amount was 3 percent more than what was recorded during the same period last year. The remittance income last year was over Rs 95 billion during the fiscal year 2005/06.
According to Nepal Rastra Bank (NRB), the amount however is less than Rs 177.94 billion recorded a month ago mainly due to the a 4.44 percent appreciation of Nepalese currency against the US dollar within a month. The official exchange rate of one US dollar against the Nepali rupee was Rs 68.40 in mid-April and the rate slipped to touch Rs 65.46 within a month. According to NRB official, the accumulative appreciation of the domestic currency against the greenback has scaled up to 13.26 percent within the current fiscal year, starting in mid-July.
Among the total foreign currency reserve, the convertible currency that mainly comprises US dollar, accounted for Rs 165.64 billion, which was nearly 96.5 percent while remaining Rs 5.9 billion has been stored in the form of Indian currency.
In order to address the deepening short supply of Indian currency, the central bank has purchased Indian currency worth Rs 30.15 billon during the first ten months of the current fiscal year whereas it had purchased Rs 26.84 billion last fiscal year.
Likewise, central bank held almost 79 percent of the total foreign currency reserve, amounting Rs 134.83 billion while the commercial banks were holding the remaining Rs 36.72 billion till mid-May 2007.
Among the commercial banks, Standard Chartered Bank has the highest amount of foreign currency, amounting US$ 125 million followed by Himalayan Bank (US$ 107 million) and Nabil Bank (US$ 89 million).
Development spending sluggish
Development spending sluggish
eKantipur.com, 31-May-2007
BY KRISHNA REGMI
Even though peace has been restored in the country, development process is still going ahead at a snail's pace with a large chunk of the development budget remaining unspent.
The data of the Financial Comptroller General Office shows that during the first eight months of the current fiscal year, the country used up just 26 percent of the total allocated capital expenditure, which mostly entails development spending. Of the cash allocation of Rs 33.36 billion, only Rs 8.75 billion was spent.
During the same period last year, the government had spent nearly 39 percent of the total cash earmarked for development budget.
The government's inability to spend affects projects ranging from key social sectors to major infrastructure.
On the social services like health, education, and drinking water, and local development, the expenditure was nowhere close to allocation. Of the allocated Rs 18.76 billion, only Rs 3.76 billion, a meager 20 percent, was utilized during the period.
The agriculture sector, the lifeline of two-third of Nepalis, is in a sorry state. A little over 87 million rupees was expended on agriculture sector. The government earmarked Rs 867.5 million for agriculture under the capital expenditure.
The scenario is much the same on transportation, including road network, a prerequisite for anchoring future development process, where only 20 percent of the appropriated budget was spent. Of the total earmarked budget of Rs 6.88 billion, only Rs 1.46 billion was utilized.
The expenditure on major development projects has also progressed at a very slow pace. Mid-Marsyangdi hydro project saw spending of Rs 190 million, far too below of what the government allocated -- Rs 3.05 billion. The spending on the much-needed Melamchi drinking project, which is now close to deathbed, is at low ebb. The project used up 400 million rupees, while the allocation is Rs 1.62 billion.
Economists blame unrealistic and ambitious allocations, multilayer and complicated decision-making channels, and donors' strings attached to big projects for the low spending levels.
Due to poor implementation of projects, US$ 8 billion meant for Nepal has been lying idle at the Asian Development Bank and US$ 400 million at the World Bank. Still disturbing is the fact that the government has a staggering 15 million rupees as treasury surplus in its coffers by this mid-May while a large number of people are deprived of basic services like health facilities and education.
Summing up the poor scenario on the development process, Dr Bimal Koirala, former chief secretary, said the process is feeling the punch of structural inflexibility in the spending system, poor absorptive capacity and absence of local bodies.
He said governance was weak, and civil servants morale down. “Conventional delivery system of public services no longer works. A system that has accountability of the people, and establishes their claims should be put in place to push the development process,” he said.
“After all, the government has put the economic agenda on a backburner, even though there is a greater need to give peace dividend to the people.”
He said the political parties seem to be unaware that peace, democracy and development are complementary to each other.
Krishna Hari Baskota, joint secretary at the MoF said two-month strike of contractors in the beginning of the fiscal year, terai protest and frequent shortages of petroleum products, primarily diesel have hampered development works.
eKantipur.com, 31-May-2007
BY KRISHNA REGMI
Even though peace has been restored in the country, development process is still going ahead at a snail's pace with a large chunk of the development budget remaining unspent.
The data of the Financial Comptroller General Office shows that during the first eight months of the current fiscal year, the country used up just 26 percent of the total allocated capital expenditure, which mostly entails development spending. Of the cash allocation of Rs 33.36 billion, only Rs 8.75 billion was spent.
During the same period last year, the government had spent nearly 39 percent of the total cash earmarked for development budget.
The government's inability to spend affects projects ranging from key social sectors to major infrastructure.
On the social services like health, education, and drinking water, and local development, the expenditure was nowhere close to allocation. Of the allocated Rs 18.76 billion, only Rs 3.76 billion, a meager 20 percent, was utilized during the period.
The agriculture sector, the lifeline of two-third of Nepalis, is in a sorry state. A little over 87 million rupees was expended on agriculture sector. The government earmarked Rs 867.5 million for agriculture under the capital expenditure.
The scenario is much the same on transportation, including road network, a prerequisite for anchoring future development process, where only 20 percent of the appropriated budget was spent. Of the total earmarked budget of Rs 6.88 billion, only Rs 1.46 billion was utilized.
The expenditure on major development projects has also progressed at a very slow pace. Mid-Marsyangdi hydro project saw spending of Rs 190 million, far too below of what the government allocated -- Rs 3.05 billion. The spending on the much-needed Melamchi drinking project, which is now close to deathbed, is at low ebb. The project used up 400 million rupees, while the allocation is Rs 1.62 billion.
Economists blame unrealistic and ambitious allocations, multilayer and complicated decision-making channels, and donors' strings attached to big projects for the low spending levels.
Due to poor implementation of projects, US$ 8 billion meant for Nepal has been lying idle at the Asian Development Bank and US$ 400 million at the World Bank. Still disturbing is the fact that the government has a staggering 15 million rupees as treasury surplus in its coffers by this mid-May while a large number of people are deprived of basic services like health facilities and education.
Summing up the poor scenario on the development process, Dr Bimal Koirala, former chief secretary, said the process is feeling the punch of structural inflexibility in the spending system, poor absorptive capacity and absence of local bodies.
He said governance was weak, and civil servants morale down. “Conventional delivery system of public services no longer works. A system that has accountability of the people, and establishes their claims should be put in place to push the development process,” he said.
“After all, the government has put the economic agenda on a backburner, even though there is a greater need to give peace dividend to the people.”
He said the political parties seem to be unaware that peace, democracy and development are complementary to each other.
Krishna Hari Baskota, joint secretary at the MoF said two-month strike of contractors in the beginning of the fiscal year, terai protest and frequent shortages of petroleum products, primarily diesel have hampered development works.
Record high revenue growth
Record high revenue growth
eKantipur.com, 28-May-2007
Amid deepening economic sluggishness mainly due to escalating political turmoil and poor law and order situation, the revenue administration is moving ahead with record growth rate.
According to a press statement issued by Ministry of Finance, the overall revenue collection during the first quarter of the current fiscal year remained at Rs 63.7 billion and the amount was 22.47 percent more than last year's collection and well ahead of the budgetary target of 15 percent.
In addition, the total government cash expenditure during the period has also scaled up to Rs 77 billion, which was 13.4 percent more than last year's expenditure and almost 60 percent of the total cash allocation for the current fiscal year.
The press statement further started that of the total expenditure, the government used Rs 53.15 billion for the purpose of recurrent expenditure, which mainly finances salaries for government employees, security expenditure and expenses for maintaining law and order situation.
Likewise, the total capital expenditure during the period remained pessimistically low at Rs 15 billion, juts 45 percent of the total cash expenditure of Rs 33.35 billion planned for this year. Likewise, the government expended Rs 8.83 billion in repaying principal of domestic as well as foreign loans. The government has allocated Rs 15.17 billion for the purpose of repaying principals of domestic and foreign loans for this current fiscal year.
According to the press release, Nepal Rastra Bank, the central bank of the country, released a total Rs 86.51 billion during the period. Of the total released amount, Rs 53.39 billion was released under the recurrent expenditure while remaining Rs 18 billion for capital expenditure and Rs 9.06 billion for repaying principals of loans, stated the release.
eKantipur.com, 28-May-2007
Amid deepening economic sluggishness mainly due to escalating political turmoil and poor law and order situation, the revenue administration is moving ahead with record growth rate.
According to a press statement issued by Ministry of Finance, the overall revenue collection during the first quarter of the current fiscal year remained at Rs 63.7 billion and the amount was 22.47 percent more than last year's collection and well ahead of the budgetary target of 15 percent.
In addition, the total government cash expenditure during the period has also scaled up to Rs 77 billion, which was 13.4 percent more than last year's expenditure and almost 60 percent of the total cash allocation for the current fiscal year.
The press statement further started that of the total expenditure, the government used Rs 53.15 billion for the purpose of recurrent expenditure, which mainly finances salaries for government employees, security expenditure and expenses for maintaining law and order situation.
Likewise, the total capital expenditure during the period remained pessimistically low at Rs 15 billion, juts 45 percent of the total cash expenditure of Rs 33.35 billion planned for this year. Likewise, the government expended Rs 8.83 billion in repaying principal of domestic as well as foreign loans. The government has allocated Rs 15.17 billion for the purpose of repaying principals of domestic and foreign loans for this current fiscal year.
According to the press release, Nepal Rastra Bank, the central bank of the country, released a total Rs 86.51 billion during the period. Of the total released amount, Rs 53.39 billion was released under the recurrent expenditure while remaining Rs 18 billion for capital expenditure and Rs 9.06 billion for repaying principals of loans, stated the release.
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