KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The latest economic updates from Nepal show mixed trends in various sectors. The Nepal Stock Exchange (NEPSE) experienced a slight decline of 21.63 points, with a turnover of NPR 6.83 billion, reflecting cautious investor sentiment.
Gold prices also fell by NPR 400 per tola, while the capital gains tax revenue from share trading surged to NPR 12.2 billion, driven by higher investor profits.
Meanwhile, the government is focused on economic reforms, with the House of Representatives approving amendments to the Economic Procedure and Fiscal Responsibility Bill to improve fiscal discipline.
In the banking sector, Nepali banks are prioritizing loan recovery amid rising bad debt. The government also aims to enhance the national health insurance fund and address corruption with property seizures.
Despite efforts to boost infrastructure and real estate, challenges persist, such as delays in the Gwarko flyover project and a stagnant property market.
However, promising developments include a push for privatization of Nepal Airlines, increasing hydropower capacity, and growing success in alternative industries like shiitake mushroom farming.
Nepse drops by 21.63 points
The Nepal Stock Exchange (NEPSE) declined by 21.63 points (0.79%) on Sunday, closing at 2,714.85. The market recorded a total turnover of Rs. 6.83 Arba, with 13.97 million shares exchanged across 316 companies.
Himalayan Reinsurance Limited (HRL) topped the turnover list with Rs. 58.66 Crores, closing at Rs. 1000. Samudayik Laghubitta (SLBSL) saw the largest increase (8.19%), while Green Development Bank (GRDBL) suffered the most significant loss (-7.91%). The
Trading Index rose by 4.92%, but the Development Bank Index dropped by 2.25%.
Gold and silver prices fall in Nepal
Gold prices in Nepal have decreased by Rs. 400 per tola, now priced at Rs. 174,100, according to the Nepal Gold and Silver Business Federation. Silver is priced at Rs. 2,450 per tola. Globally, gold is trading at $2,986 per ounce.
Capital gains tax from share trading increases sharply
The capital gains tax revenue from share trading in Nepal has tripled in a year, reaching NPR 12.2 billion in just eight months of the current fiscal year. Data from CDSC shows a 3.79% increase compared to the same period last year.
The growth in the NEPSE index and higher investor profits contributed to the surge in tax revenue.
In February alone, NPR 1.33 billion was collected. Investors are taxed at 5% on long-term gains and 7.5% on short-term gains. Corporate entities and stock dealers also contributed to the revenue.
The highest collection was recorded in July, totaling NPR 4.27 billion due to higher trading activity.
HoR approves proposal to amend Economic Procedure and Fiscal Responsibility Bill
The House of Representatives has approved the proposal to consider the Economic Procedure and Fiscal Responsibility (First Amendment) Bill, 2081 BS.
Finance Minister Bishnu Paudel explained that the bill intends to enhance budget execution and fiscal discipline.
He acknowledged the challenges in managing general expenditures and ensuring project implementation.
Lawmakers expressed concerns over revenue leakage, decreasing foreign aid, growing public debt, and insufficient capital expenditure.
Paudel emphasized prioritizing impactful projects and amending the Public Procurement Act to improve economic management. Several lawmakers contributed to the discussion, stressing the need for fiscal reforms.
NRB to raise NPR 40 billion in deposits
Nepal Rastra Bank (NRB) will raise NPR 40 billion in deposits from the banking system using a 21-day deposit collection instrument.
The minimum bid amount is NPR 100 million, with increments of NPR 50 million. This action is aimed at managing excess liquidity in the financial system.
Government to lift savings cap in cooperatives
The government plans to lift the individual savings cap in cooperatives through a replacement bill, just two months after introducing the cap via an ordinance.
The December ordinance had limited individual savings to Rs. 1–5 million, depending on a cooperative’s operational scope.
However, after pressure from cooperative organizations, Minister Balram Adhikari has proposed linking the cap to 10% of a cooperative’s primary capital instead.
The bill also revises board tenure limits and the appointment process for the Cooperative Regulatory Authority. Despite the changes, depositors remain uncertain as key reforms are yet to be implemented.
Banks focus on loan recovery as bad debt rises
Nepali banks are prioritizing loan recovery over new lending from Chaitra due to the increasing levels of bad loans. Normally, banks focus on recovery in the fourth quarter, but this year, they started early because non-performing loans (NPLs) reached 4.5% in Q2.
Several banks are facing significant distributable losses and capital pressure, which limits their ability to distribute dividends.
They are struggling to recover loans from the real estate, SME, and construction sectors, and collateral auctions are not yielding results due to falling property prices.
NEPSE CEO shortlist announced
The selection committee for the NEPSE CEO has shortlisted five candidates: Chudamani Chapagai, Narad Kumar Luintel, Purna Prasad Acharya, Badri Prasad Pyakurel, and Hemant Basyal.
They will present their business plans and participate in interviews on March 19 at the Ministry of Finance. The committee, led by Sebantak Pokharel, will recommend one candidate, with the final appointment to be made by the Council of Ministers.
The transparent selection process is aimed at bringing strong leadership to NEPSE to shape the future of Nepal’s stock market.
Customs bill proposes fines of up to 200% for false declarations
The Finance Committee of the House of Representatives has approved a provision in the Customs Bill, which imposes fines of up to 200% of the declared value for false customs declarations.
Importers who misdeclare product details such as material, size, or type can face fines, confiscation of goods, or duty collection. The bill also allows for post-clearance inspections, with further discussions scheduled for the next committee meeting.
Health minister calls for joint effort to strengthen insurance fund
Health Minister Pradeep Paudel has called for provincial and local governments to contribute to strengthening the national health insurance fund.
He emphasized the need for pooling funds from all three levels of government to bolster the Rs 30 billion insurance fund.
The budget is set to increase from Rs 3 billion to Rs 10 billion, with additional funding from taxes on pollution, sugary products, tobacco, and alcohol. A new financial management system will be introduced.
A report by Dr. Shambhu Acharya suggests expanding coverage, integrating free healthcare, and revising premium models to make health insurance more sustainable.
Mahat advocates for privatization of Nepal Airlines
Former Finance Minister Dr. Prakash Sharan Mahat has proposed selling a majority stake in Nepal Airlines to the private sector, arguing that government ownership is no longer viable.
Speaking in Parliament, he pointed to the success of Air India’s revival under the Tata Group, noting that state-run enterprises often struggle.
Mahat emphasized that private investment drives economic growth and called for relaxed regulations to attract foreign capital.
He credited past reforms in aviation and hydropower for boosting revenues and warned against nostalgia for state ownership, urging a more business-friendly environment to boost employment, infrastructure, and economic growth.
Govt to seize properties of six individuals for corruption and crime
Home Minister Ramesh Lekhak has announced that the government will seize the properties of six individuals found guilty of corruption and criminal activities by the Supreme Court.
These include former officials and their families: Amonananda Mishra, Saraswati Dhungana, Murari Bahadur Karki, Keshar Jung Khadka, and Ramagna Chaturvedi, along with Indian citizen Sarita Giri Rai.
The properties in Kathmandu Valley will either be auctioned or transferred to the government according to land administration laws. The Home Ministry has started implementing this decision, ensuring that illegally acquired assets are no longer used by offenders.
Government’s flexible budget cap may rise further
The government has set a flexible budget cap of Rs. 19.60 trillion for the upcoming fiscal year, though some officials believe there may be room for further expansion.
While estimates indicate that an increase is possible, practical constraints are within the current limit. The cap is based on a projected 10% revenue growth.
The National Planning Commission, which oversees budget estimates, has advised sticking to this limit, stressing that revenue growth will be key to any potential budget expansion.
Real estate market remains stagnant despite lower interest rates
Despite a drop in interest rates to single digits, Nepal’s real estate market has not seen a significant recovery.
Investors remain cautious, waiting for further price drops, which has led to stable transaction volumes.
In February, 46,061 land and property deeds were registered, nearly identical to January’s 46,069. The banking system holds around Rs. 700 billion in liquidity, but credit disbursement remains sluggish.
The average loan interest rate has dropped to 8.55%, while deposit rates are at 4.62%. Although transactions are stagnant, real estate revenue in February reached Rs. 4.12 billion, a slight increase from January’s collection.
Nepal aims for 28,500 MW hydropower by 2035, facing challenges
Nepal’s hydropower generation has reached 3,400 MW, with an ambitious plan to reach 28,500 MW by 2035. The government’s roadmap includes exporting 15,000 MW while consuming 13,500 MW domestically. However, financing remains a significant challenge, requiring $46.5 billion.
Experts point out issues like policy barriers, slow project execution, and environmental concerns.
Large reservoir projects and cross-border transmission lines with India and Bangladesh are underway.
The government plans reforms, financial incentives, and foreign investment to address these challenges. Despite being technically feasible, experts stress the need for strong political commitment and private sector collaboration.
Gwarko flyover faces more delays due to structural issues
The construction of the Gwarko flyover has been delayed again due to ground subsidence, which widened a joint gap on a concrete panel.
A 40-meter panel on the Satdobato side had to be removed, forcing the contractor to restart the work.
Originally awarded in February 2022, the project missed its February 2024 deadline, leading to extensions until December 2024. The contractor, fined Rs 85,000 per day, has begun piling work to stabilize the structure.
The prolonged construction has worsened traffic congestion and air pollution, frustrating commuters in the busy Ring Road area.
Minister Gurung urges local authorities to regulate hoarding board ads
Communications and Information Technology Minister Prithvi Subba Gurung has highlighted the loss of significant revenue from hoarding board advertisements due to unregulated local governments.
Speaking at an advertisement board capacity development program, he urged local authorities to manage ad revenues effectively. He also proposed revising the Advertisement Act to oversee social media ads and standardize media houses.
The government plans to amend the Advertisement Regulations, 2077 BS, to address declining ad revenues in mass media. Officials stressed the need for a more systematic approach to advertisement management while ensuring transparency in public welfare ads.
Jagdamba Motors introduces TVS Ntorq Race XP Black in Nepal
Jagdamba Motors, the official distributor of TVS in Nepal, has launched the Ntorq Race XP Black, the country’s first 125cc scooter with over 10 PS power.
Designed for enthusiasts, it features dual ride modes (Street & Race), voice assist technology, and a race-inspired matte black finish. The scooter accelerates from 0 to 60 km/h in 8.3 seconds, with a top speed of 98 km/h. TVS aims to redefine urban mobility in Nepal.
Returnee worker succeeds in shiitake mushroom farming
Antaram Joshi from Ganyapadhura, Dadeldhura, has become the first in the district to cultivate shiitake mushrooms.
After working in India and Malaysia, he initially planned to migrate to Poland but changed his mind while working at a mushroom farm in Kathmandu.
With support from local authorities, he started farming with 50 bales in 2079 BS and now grows over 700.
Earning Rs. 50,000–60,000 monthly, he aims to expand to 2,000 bales and establish a model farm in Sudurpashchim Province.
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