Thursday, July 20, 2017

Industry, service sector lift Nepal's growth: ADB

Robust growth in industry and services lifted growth prospects for Nepal in fiscal 2016-17, as did accelerated earthquake reconstruction, according to the Asian Development Outlook (ADO).
Asian Development Bank (ADB) – unveiling Asian Development Outlook – has said economic outlook for South Asia remains robust, with growth on track to meet projections made in Asian Development Outlook 2017 of 7 per cent for 2017 and 7.2 per cent for 2018.
Agriculture growth in Bangladesh in fiscal year 2016-17 was higher than anticipated, it reported, adding that services growth also outperformed expectations, supported by agriculture growth and solid performances in wholesale and retail trade, real estate, hotels and restaurants, and transport.
In Pakistan, growth was similarly supported by a revival in agriculture, as well as by continued expansion in construction and steady growth in services. Strong private consumption remained the largest contributor to growth.
These improved prospects for Nepal, Bangladesh, Maldives and Pakistan are balanced by slower growth projected for Bhutan and Sri Lanka, the report reads.
The construction of hydropower projects has been delayed in Bhutan, undermining economic growth there. In Sri Lanka, heavy rain caused severe floods in 15 of 25 districts and triggered landslides in some areas in May. Disrupted economic activity and damage to agriculture will slow growth in 2017, but subsequent recovery may boost GDP growth somewhat in 2018.
In India, economic growth slowed to 7.1 per cent in fiscal year 2016-17 – ended on March 31 – from eight per cent in previous fiscal. “The slowdown can be partly attributed to demonetisation and replacement of high-denomination banknotes in November 2016, which affected economic activity in several cash-dependent sectors,” ADB report reads. "India – the sub-region’s largest economy – is expected to achieve previous growth projections of 7.4 per cent in 2017 and 7.6 per cent in 2018, primarily from strong consumption."
Meanwhile, developing Asia is now expected to grow by 5.9 per cent in 2017, or 0.2 percentage point higher than the rate previously envisaged. The smaller upgrade in the 2018 growth forecast – 5.7 per cent in ADO 2017 to 5.8 per cent – reflects a cautious view on the pace of the turnaround in external demand.
“Developing Asia is off to a good start this year with improved exports pushing growth prospects for the rest of 2017,” said ADB’s chief economist Yasuyuki Sawada. “Despite lingering uncertainties surrounding the strength of the global recovery, we feel that the region’s economies are well-placed to face potential shocks to the outlook.”
Excluding the newly industrialised economies of Republic of Korea, Singapore, Taipei, China, and Hong Kong, China, growth projections for the region are revised up to 6.4 per cent for 2017 and to 6.3 per cent for 2018. Projections are upgraded for Central and East Asia.
Likewise, the combined growth forecast for the major industrial economies – the US, the euro area, and Japan – has been retained from ADO 2017.
Economic growth prospects in developing Asia for 2017 have improved on the back of stronger-than-expected export demand in the first quarter of this year, according to the report.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members, 48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in co-financing.

Wednesday, July 19, 2017

ID cards mandatory to deposit money in others' accounts

The central bank has made it mandatory for the depositors to show their identification card, if they are depositing Rs 100,000 or more cash in others' bank account. Bank and financial institutions (BFIs) may not accept cash, if depositors fail to show identification documents and reason for such deposit, according to the new rule introduced by the Nepal Rastra Bank (NRB) to check money laundering and terrorism financing. The new rule came into effect from the new fiscal year.
Earlier, BFIs used to ask clients to show their identity card only when withdrawing huge amount of cash. The central bank has now made it mandatory for the BFIs to seek identification documents even while depositing cash.
The central bank, in its recent circular to the BFIs, said that the new rules has been brought to introduce additional provisions on Money Laundering Prevention Act, 2008 and Assets (Money) Laundering Prevention Rule, 2016, to prevent the financial and banking system getting abused by the dirty money. "The new requirement is to identify and verify the client's identity popularly known as know-your-customer (KYC) process," the central bank added.
Likewise, the clients also cannot do cash transaction of more than Rs 1 million barring some central bank-prescribed circumstances. "The BFIs would also not provide withdrawal of cash of Rs 1 million or higher."
The new rule aimed at curbing abuse of banking channel for money laundering and terrorist financing is cumbersome could also be instrumental for the people to opt for non-banking channel for transaction, according to the bankers. 

Tuesday, July 18, 2017

Finance Minister pledges tax base expansion, reform

Finance Minister has expressed his commitment to expand the tax base and to reform the tax system to give momentum to the economy.
Addressing a news conference – the first after being appointed finance minister – organised by the Finance Ministry here today, finance minister Gyanendra Bahadur Karki said that the government will meet Rs 730.55 billion revenue mobilisation target for the current fiscal year with expansion of tax base and reforms.
The ministry had mobilised Rs 611.76 billion in revenue in last fiscal year.
"The revenue mobilisation last fiscal year exceeded the target because of broadening of the tax base, upgrading of tax realisation standard, promotion of technology-oriented services in revenue administration, leakage control and administrative reforms," he said, adding that the government was equally conscious and serious regarding plugging revenue leakage. "The success in revenue mobilisation was possible due to the expansion in the number of tax-payers, the favourable economic activities created by the 6.9 per cent economic growth, increase in the investment in the reconstruction works, the new system of tax initiated at the point of origin at customs and tax investigation."
The finance minister, on the occasion, also reaffirmed that the government has laid special emphasis on increasing the capital expenditure, pledging to implement the recommendations made by the high-level tax system review commission.
At the press meet organised to share about the revenue mobilised by the government, he said that the ministry is vigorously working towards propelling the country towards prosperity. "We are committed to providing services and facilities to the people in remote areas," he said, adding that the government, however, expects the active cooperation and support from all the sections of society. 

Monday, July 17, 2017

NRA asks quake victims to collect grant within a year

The National Reconstruction Authority (NRA) – in line with the decision of the 10th steering committee meeting chaired by Prime Minister Sher Bahadur Deuba last week – has set the deadline of mid-July, 2018 to distribute the grant amount to households, whose houses were damaged by the devastating earthquake of 2015.
Identified eligible housing aid beneficiaries should collect the entire grant amount within this fiscal year, the NRA chief executive Govinda Raj Pokharel said, adding that the NRA cannot keep distributing the housing aid for an indefinite period. "So, we would like to urge all the beneficiaries to use the facility extended by the government till mid-July next year."
The specific time has been designated to expedite the post-earthquake reconstruction process.
Those who have collected the first tranche by mid-January 2016 should receive their second tranche by mid-January 2017. For the beneficiaries, who received the first tranche by mid-November 2017 should collect the second tranche by mid-April 2018, he said, adding that the beneficiaries, who received the second tranche by mid-January 2018 should receive the third tranche by mid-June 2018 and those obtaining second tranche by mid-January 2017 should obtain third tranche by mid-July 2018.
Though the NRA initiated the process of distributing the housing grant from March 13, 2016, the process has been pathetic. Till the date, only around 45,000 houses have been rebuilt and 115,000 are under construction. "In contrast, the number of identified beneficiaries in the worst-hit 14 districts stands at 626,694, with additional 98,201 beneficiaries listed in less-affected 17 districts," he added.
Out of the total 724,895 beneficiaries in 31 quake-affected districts, 594,150 have already received the first tranche till date, but the number of households coming forward for the second and third installments of the housing grant is very low, according to the NRA. "Likewise, only 52,166 have received the second installment so far."
Immediately after the devastating 2015 Gorkha earthquake, the government had decided to provide Rs 200,000 per household as private housing rebuilding aid, which was later increased to Rs 300,000 to be distributed in three installments; Rs 50,000; Rs 150,000 and Rs 100,000. The amount is being disbursed in three installments to ensure that the quake survivors rebuild quake resilient homes in line with the compliance and design set by the government.

Government mobilises Rs 612 billion revenue in the last fiscal year

The government has been able to mobilise Rs 612 billion revenue in the last fiscal year.
Finance Minister Gyanendra Bahadur Karki – addressing a meeting of Finance Committee under the Legislature-Parliament – today informed that the government has been able to mobilise Rs 612 billion in revenue in the fiscal year 2016-17.
"It is 108 per cent more than the target," he said, adding that the government had mobilised Rs 565 billion revenue a fiscal year ago. "Zero tolerance policy has been adopted against revenue leakage and irregularities helping the revenue mobilisation to increase."
The government will be strict in checking revenue leakage, he said emphasising has been given on Automated Custom Tax System to control irregularities in the revenue and tax system.
Karki said customs at point of origin and the details of the monitoring and transaction of such transaction from the point of production itself would be brought into the computerised system to check the irregularities seen in the revenue system. "The ministry is working with priority for keeping a close watch on tax and laws," the minister added. "The performance and character of the employees working in the tax administration would be monitored also for checking tax evasion and that preparations were on for formulating and implementing a code of conduct for those working in the customs, revenue and taxation system."
Informing that the ministry is also planning to install IP cameras at 13 places for checking the revenue leakage, Karki said that a local-type tax dispute settlement committee has been proposed in the proposed Revenue Board Act. "It will systematise the tasks of constituting commissions as the Tax Settlement Commission."
Revenue Secretary Sishir Dhungana, on the occasion, said that the issue of working style and transparency was important although it was not in itself bad practice to form the tax settlement commission. He added that such tax settlement commissions are formed in one or the other form in other countries throughout the world as well.
During the meeting, the committee members inquired the finance minister and the ministry officials on revenue mobilisation and initiatives to stop corruption and irregularities seen in the tax administration. 

Sunday, July 16, 2017

Local bodies get one-third of government grant

Local bodies have received one-third of the government grant today.
Of the total government grant worth Rs 225 billion that the local bodies are supposed to get in the first quadrimester of this fiscal – according to the budget speech – the local bodies have received Rs 75 billion as the first tranche of the grant in their respective bank accounts.
The government has allocated equalisation and conditional grants to the 744 local units. But the budget has been sent to the local bodies with the elected representatives. The government has yet to hold election in province 2. The local bodies under the Province 2 will get the budget once the election will be held.
According to the Finance Ministry, rural municipalities will get a minimum of Rs 100 million to Rs 390 million, municipalities will get Rs 150 million to Rs 430 million, sub-metropolitan cities will get Rs 400 million to Rs 630 million and metropolitan cities will get Rs 560 million to Rs 1.24 billion.

Hydropower producers appreciated for their contribution

For the first time, the government has feted the private power producers for their contribution to the development of hydropower in the country.
On the 24th anniversary of the establishment of Department of Electricity Development (DoED), the government and Independent Power Producers' Association Nepal (IPPAN) today jointly conferred certificates of appreciation to the independent power producers that operate 58 power plants and Nepal Electricity Authority (NEA) that operates 14 plants.
"All the power plants are now connected to the national grid," said director general of the department Nabin Raj Singh. He also briefed about the fast track licensing services. "The department is now focusing on the study of mega hydropower projects and enhanced supervision and monitoring of the works," Singh added.
The department was formed after the government opened hydropower generation to the private sector that has now an installed capacity almost equal to the government-owned power utility NEA.
"This is the first time the hydropower producers were collectively appreciated for their contribution," according to an architect of the domestically-financed Chilime Hydropower Project Dambar Nepali.
“It's a matter of pride for us to see so many developers from the private sector engaged in hydropower generation in the country,” he added. Nepali is planning to finance and start a large-scale power plant soon.
Promoter of Sanima Hydropower Subarna Das Shrestha, on the occasion, expressed happiness for recognition and pledged to make additional efforts to generate hydropower.
Sanima Hydropower's three plants, with installed capacity of 31.6 megawatts, are in operation currently.
Likewise, president of IPPAN Shailendra Guragain said that the private sector was now engaged in construction of power plants with 3,500 megawatts of installed capacity, with a total commitment of Rs 700 billion. "Construction of these plants will require digging 300-km-long tunnels and constructing 1000-km-long transmission lines,” he added.
Former director general of the department Kishor Babu Aryal, on the occasion, remembered resistance from different quarters to the department's efforts in its early days to help promote private sector. "The establishment of power plants by the private sector itself has proved the success of the department,” he added.
A member of National Planning Commission (NPC) Arbinda Kumar Mishra said that the plan for power generation should be based not in terms of megawatts, but in terms of demand and seasonal variation.