KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
On the Nepal Stock Exchange (NEPSE), a positive swing of 17.28 points marks a recovery from previous declines, with MBLPO leading turnover and PHCL showing a notable rise.
In the legislative sphere, the Economic Procedure and Fiscal Responsibility Bill faces criticism, though it proceeds in Parliament with assurances of further dialogue on tax policies.
Additionally, challenges like the growing number of loan defaults, rising gold and silver prices, and delays in the BP Highway reconstruction are addressed, along with updates on the telecom sector’s struggles and advancements in 5G approval.
Meanwhile, insurance companies settle significant flood claims, and initiatives like the launch of new mutual funds and the push for hydropower project completion reflect ongoing efforts to foster economic growth despite facing several operational and financial challenges.
NEPSE increases by 17.28 points
The Nepal Stock Exchange (NEPSE) on Wednesday gained 17.28 points (1.17%) today, closing at 2,736.48 following a previous decline.
The index fluctuated between 2,745.58 and 2,717.29, with a total turnover of Rs. 8.23 Arba from 79,236 transactions. MBLPO led the turnover at Rs. 81.36 Crores, while PHCL saw a rise of 9.79%.
WNLB experienced a 10% drop, making it the worst performer. Among sectoral indices, the Investment Index rose by 1.76%, while the Development Bank Index fell by 0.33%.
Economic Procedure and Fiscal Responsibility Bill presented in Parliament
Finance Minister Bishnu Paudel introduced the Economic Procedure and Fiscal Responsibility (First Amendment) Bill, 2081, in the House of Representatives on Wednesday.
Despite protests from lawmakers, including Prabhu Saha and Chitra Bahadur KC, who criticized the bill’s tax policies, economic transparency, and reduced role of the Planning Commission, Minister Paudel defended the federal government’s role in development.
The majority of the House rejected the protest notices. Paudel assured that discussions on tax policies would be included in the upcoming budget preparation process.
Over 105,600 borrowers blacklisted in 6.5 years
Nepal is witnessing a rapid increase in loan defaults, with more than 105,600 borrowers blacklisted in the past 6.5 years, according to the Credit Information Center.
From 2075 BS to 2081 BS (up to Falgun 25), the number of blacklisted borrowers has grown significantly. In 2075, only 1,300 borrowers were blacklisted, but this number rose to 3,000 in 2076, 3,200 in 2077, 7,900 in 2078, and over 19,000 in 2079. In 2080, 33,200 borrowers were blacklisted, and by 2081, an additional 37,500 were added.
Many borrowers were blacklisted due to bounced checks caused by insufficient funds, with around 200 new defaulters added daily.
Gold and silver prices rise
The price of gold in Nepal rose by Rs 600 per tola on Wednesday, reaching Rs 170,500, while silver prices increased by Rs 30 per tola to Rs 2,000 per tola, according to the Federation of Nepal Gold and Silver Dealers’ Association.
BP Highway reconstruction delayed
Due to delays in funding, the flood-damaged BP Highway will remain unusable during this monsoon.
The government has initiated the tender process for the reconstruction of sections such as Nepalthok–Barkhekhola, which will be widened to 10 meters and include drainage and asphalt paving.
However, this process will take three months, coinciding with the monsoon, delaying the construction. The government has allocated Rs 1 billion for the project, with Rs 700 million estimated for reconstruction.
Insurance companies settle over Rs. 3 billion for flood claims
Nepal’s insurance companies have paid over Rs. 3.05 billion in claims for damage caused by the October floods.
According to data from the Nepal Insurance Authority, 2,249 claims have been settled over the past five months, though claims totaling Rs. 9.05 billion remain unsettled.
A total of Rs. 12.64 billion in claims were filed, with property insurance making up the largest portion. So far, insurers have paid Rs. 2.2 billion for property insurance, with Rs. 6.44 billion still pending.
Motor insurance claims have seen Rs. 50.44 crore paid out, while Rs. 30.24 crore has been settled for engineering risk claims. Siddhartha Premier Insurance and Shikhar Insurance have been the largest contributors.
Six companies shortlisted for Nepal’s currency printing contract
Nepal Rastra Bank has shortlisted six companies for the next phase of currency printing, including one from China.
The companies selected for the tender process include China Banknote Printing & Minting Corporation, De La Rue International Ltd (UK), Giesecke+Devrient Currency Technology (Germany), Joint Stock Company Goznak (Russia), Oberthur Fiduciaire (France), and Polish Security Printing Works (Poland).
One of these companies will be awarded the contract for designing, printing, and delivering Nepali currency notes.
Government to classify roads into seven categories
The government is preparing to classify Nepal’s road network into seven categories under the Public Roads Act 2081, which will replace the outdated Public Roads Act 2031.
The new classification divides roads into federal, provincial, and local categories, with federal roads including expressways, national highways, and strategic roads, while provincial roads cover regional highways. Local roads will encompass urban and rural roads.
The bill is under review by provincial governments before being presented for cabinet approval.
NTA to approve 5G services for telecom companies within a week
The Nepal Telecommunications Authority (NTA) has announced it will approve 5G services for telecom companies within a week. NTA Chairman Bhupendra Bhandari confirmed that approval will be granted immediately once companies apply.
Although Nepal’s telecom sector lacks 5G infrastructure, Bhandari suggested launching services in eight cities initially. Nepal Telecom has only conducted trials, while Ncell has yet to test 5G due to high investment costs.
Chure-Terai Madhes Conservation Committee spends Rs 15 billion over 10 years
Since its establishment in 2014, the Chure-Terai Madhes Conservation and Development Committee has spent Rs 14.96 billion, achieving 88.93% financial and 91.84% physical progress.
The committee has completed several projects, including 412 km of embankments and the restoration of 139 hectares of wetlands.
However, it faces budget constraints, staffing shortages, political interference, and corruption allegations, with recent dismissals of two officials for ineligibility. The government is working on restructuring the committee for greater efficiency.
Nepal Telecom sector faces revenue decline
Nepal’s telecom companies are facing financial challenges, with the sector needing Rs 6 billion annually for smooth operations, while revenue is on the decline.
Telecom expert Manohar Kumar Bhattarai noted that although 90% of the population has 4G coverage, only 20% of users actively use mobile data. Ncell CEO Jabbor Kayumov has warned that the telecom industry is heading towards a crisis, urging regulatory reforms to attract foreign investment.
Insurance Authority to establish court-like bench for dispute resolution
The Nepal Insurance Authority (NIA) is set to introduce a courtroom-style bench to handle insurance-related disputes.
This quasi-judicial body will operate out of a dedicated hearing room at the NIA’s new headquarters.
A three-member judicial panel will manage insurance claim disputes, and an online portal will allow stakeholders to track case progress. Starting from Baisakh 1, this system will be digitized to improve efficiency.
Reliable Capital to launch “Reliable Samriddhi Yojana” Mutual Fund
Reliable Capital Limited is set to issue its first closed-end mutual fund, “Reliable Samriddhi Yojana.” The issue will open from Baishakh 3 to Baishakh 7, 2082, with a possible extension until Baishakh 17 if not fully subscribed. The fund will offer 10 crore units, with 85% allocated to the public, and investors can apply for units between 100 and 1 crore.
Minister Khadka urges swift construction of Arun Hydropower Project
Energy Minister Dipak Khadka stressed the importance of completing hydropower projects on the Arun River without delay to maximize national benefits.
At a meeting on the Upper Arun and Arun IV projects, he emphasized the need for timely completion and assured that any problems would be resolved to ensure investment security and job creation.
Industries moving toward prosperity: Minister Bhandari
Minister for Industry, Commerce, and Supplies Damodar Bhandari stated that Nepal’s industries are now on a path to prosperity.
At the Automotive Conclave-2081, he reaffirmed the government’s commitment to economic reforms and highlighted the private sector’s priority in the upcoming budget. He also emphasized the need to promote Nepali products for industrial growth.
First commercial chartered flight from Pokhara to Chengdu on March 18
The first commercial chartered flight between Pokhara and Chengdu will operate on March 18, aimed at regularizing international flights at Pokhara Regional International Airport. This initiative is led by the private sector with support from China Travels International, the Chinese Embassy, and Sichuan Airlines.
Nepal urges poultry farmers to stay alert amid bird flu in India
The Department of Livestock Services in Nepal has urged poultry farmers near the Indian border to remain vigilant against bird flu. While no cases have been reported in Nepal, the disease has spread across nine Indian states, including Bihar.
The H5A strain has been identified as the cause, and authorities are closely monitoring the situation to prevent any outbreaks.
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