KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
To mention about Friday’s happenings, experts advocated for a pragmatic budget for fiscal year 2081/82, emphasizing alignment with available resources and a credible approach to revenue, foreign aid, and internal loans, with calls for a socialism-oriented strategy to boost the country’s economy.
Meanwhile, the price of gold fell on Friday by Rs 1,800. Similarly, cooperative victims held a demonstration at Maitighar in Kathmandu, demanding the return of their savings. In Makwanpur, 374 small industries have been closed in the first 10 months of the current fiscal year. Additionally, Taplejung’s Tiptala border crossing reopened on Friday.
Call for a realistic budget
Experts urge that the budget for fiscal year 2081/82 should be realistic, reflecting available resources rather than being overly ambitious. At a discussion by the Nepal Intellectual Council, UML Vice Chairman Bishnu Prasad Paudel emphasized the need for a credible budget aligned with revenue, foreign aid, and internal loans.
He called for a socialism-oriented approach to revitalize the economy and address industrial undercapacity and public despair. UML member Bidya Bhattarai stressed the importance of considering social perspectives, while Prof. Dr. Shivraj Adhikari highlighted the need to fund implementable projects and reduce policy-level corruption and recurrent expenditures.
374 industries close down in Makwanpur
As many as 374 small industries have been closed in Makwanpur in the first 10 months of the current financial year owing to the economic slowdown.
According to the Office of Domestic and Small Industries, Makwanpur, during this period, 167 industrial and 277 commercial enterprises have shut down. In the previous fiscal year 2079/80, 283 industrial and commercial enterprises were closed in Makwanpur.
It has been learned that the number of industries going out of business has increased due to a lack of investment from banks and financial institutions and insufficient capital.
In the 10 months of the current year, 614 new industries have been registered with the Domestic and Small Industries Office, including 323 industrial and 291 commercial enterprises. In the year 2079/80, 1,099 industries were registered, with 579 industrial and 430 commercial enterprises.
132 kV Substation in Gulmi nears completion
The construction of a 132 kV substation in Unaychaur, Gulmi, is in its final stages, aiming to extend the district’s power transmission. Narayan Thapa, overseeing the project, notes completion soon, with electricity distribution slated for mid-June.
This initiative, funded by the Nepal Electricity Authority at Rs 45 million, addresses intermittent outages caused by Gulmi’s reliance on a 33 kVA line from Butwal. Once operational, it will connect Motipur to Burtibang, benefiting areas like Arghakhanchi, Unaychaur, and Paudi Amarahi. The substation’s completion promises to alleviate power issues, with similar projects underway in Paudi Amarahi, signaling hope for improved electricity access in the region.
Government defies budget ceiling, plans to exceed Rs 1.8 trillion limit
The government is set to exceed the budget limit of Rs 1.8 trillion set by the National Planning Commission for the next fiscal year. Despite the commission’s initial ceiling, Prime Minister Dahal has instructed to raise it to Rs 1.9 trillion, citing pressure from various ministries demanding funds.
This move challenges the authority of the NPC, which is legally tasked with setting the budget limit annually. With the revised ceiling, the government plans to increase internal borrowing, raising concerns about fiscal discipline.
The pressure to expand the budget comes amid revenue collection challenges, with the government aiming for a significant increase in revenue targets for the upcoming fiscal year.
Import hub with zero exports raises trade concerns
Despite significant import activity at Kathmandu’s Chobhar Dry Port, totaling Rs 830 million in the first 10 months of FY 2023/24, there have been no reported exports. Data from the Department of Customs indicates that goods worth Rs 836.56 million entered the port, constituting a mere 0.06 percent of Nepal’s total imports for the fiscal year.
Meanwhile, the Birgunj Customs Office remains the primary trade hub, handling 34.32 percent of imports and 20.19 percent of exports for the nation.
ISPs agree to pay taxes following government pressure
Internet service providers (ISPs) have reversed their decision and agreed to pay taxes on rural telecommunications development fees and maintenance royalty charges, totaling Rs 3.64 billion since FY 2017/18, following pressure from the government and a recent Supreme Court ruling.
The dispute over tax obligations has led to a standoff between ISPs and the government, with the former arguing against paying taxes on non-telecommunication services. While the government asserts its stance on tax collection, ISPs cite past parliamentary directives exempting them from such taxes. The Ministry of Communications and Information Technology (MoCIT) has taken action, forming a study team and withholding foreign exchange facilities until dues are settled, causing disruptions in internet services.
Gold prices plummet by Rs 1,800 per tola
The domestic gold market on Friday saw a significant decrease, with prices dropping by Rs 1,800 per tola, as reported by the Nepal Gold and Silver Dealers’ Association. Fine gold was fixed at Rs 136,900 per tola, while standard gold traded at Rs 136,250 per tola. This marks a notable decline from Thursday’s prices, where fine gold was valued at Rs 138,700 per tola and standard gold at Rs 138,500 per tola. Additionally, silver was traded at Rs 1,855 per tola. It’s important to note that a tola is approximately equivalent to 11.66 grams.
Ilam to host International Tea Festival from June 8-10
ILAM: Ilam, renowned as ‘the tea capital’ of Nepal, will host an international tea festival from June 8 to 10 in Ilam Bazar. Mayor Kedar Thapa of Ilam municipality announced that the festival aims to showcase the quality of Nepali tea globally. The event will gather tea industrialists, farmers, entrepreneurs, and international enthusiasts.
Mayor Thapa highlighted the festival’s role in addressing concerns of tea farmers and traders selling their produce at lower prices due to insufficient publicity, despite Nepal’s organic and high-quality tea.
He emphasized the potential of tea as a significant source of foreign currency, provided Nepal’s tea exports increase. The festival’s objectives include tea marketing and promoting tea cultivation among farmers, Mayor Thapa stated, expressing optimism about enhancing the international market presence of Nepali tea.
(Compiled and prepared by Srija Khanal)
Economic Digest is a daily morning economic digest, basically relatable summations of the most important business news, and happenings from Nepal into easy-to-understand summaries.
Comment