Top Economic news for this week- 29th Falgun to 5th Chaitra

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Chaitra 6, 2072- This week's main events that provide insight into current Nepalese economic environment have been briefly presented below:

  • Consumer rights activists have urged the government to implement constitutional provisions related to consumer rights. Issuing a statement on the eve of World Consumer Rights Day (WCRD), Forum for Protection of Consumers' Rights (FPCR) said though the new constitution has guaranteed consumer right as people's fundamental rights, consumers are still suffering as constitutional provisions related to consumer rights have not come into implementation yet.
  • After widespread criticism for overcharging consumers, the controversial Birat Petroleum has brought down its petrol price to Rs.99 per liter from Rs.130. Jayanti Oil Store of Tripureshwar, one among three petrol pumps authorized by Nepal Oil Corporation (NOC) to distribute Birat’s petrol, has started selling Birat’s petrol at Rs.99 per liter from Sunday morning.
  • A review of the 13th periodic plan, which concludes in mid-July, indicates that the government will miss key targets set in the plan. Targets of average annual growth, people below poverty line, employment generation and electricity generation, among others, cannot be achieved, according to a preliminary review of the first two years of the interim plan. The plan had set a target of achieving 6 percent economic growth annually. But the review shows average growth stood at only 4.25 percent in the first two years.
  • Nepal Electricity Authority (NEA) has reduced load shedding by an hour a day effective from Monday. Issuing a statement, the NEA informed to this effect. As per the NEA decision, the numbers of load-shedding hours will decrease to 12 hours a day and 84 hours a week. The NEA had been enforcing power outage by 13 hours a day and 91 hours a week to the Individual household consumers. According to NEA, the import of 80 megawatt of electricity from India through Dhalkebar-Muzaffarpur transmission line and upcoming SLC examination promoted the NEA to reduce the load shedding hours.
  • Shortage of the diesel continues to hit development projects. Though it has already been a month since border blockade was lifted, development projects are still facing fuel shortage, which, according to officials, has forced them to operate at low capacity. This has slowed government spending which will ultimately hit national economy.
  • At a time when the market is still reeling under acute shortage of Liquefied Petroleum (LP) gas, Ministry of Supplies (MoS) has formed a six-member committee to study Nepal's LP gas market and recommend measures for improving supply and distribution of the popular cooking fuel. Issuing a statement, MoS said that the committee will study the country's LP gas market, and supply and distribution mechanism and recommend necessary measures to the government to improve supply and distribution of LP gas.
  • As the government prepares to increase its expenditure in the second half of the current fiscal year, Nepal Rastra Bank (NRB) is also doing needful preparation to arrange fund for the government by issuing various types of bonds. Though the central bank had already unveiled a timetable to raise domestic debt, there were concerns on such borrowing amid failure of the government to make much capital expenditure. The failure to boost capital expenditure has led to a surplus of fund in the government account at the central bank.
  • With the trade disruption in southern Nepal due to the Tarai turmoil and unofficial economic blockade by India coming to an end, the inflation in the country is also easing, though still at double digits. The inflation, as measured in consumer price index (CPI), came down to 11.3 percent in mid-February of the current fiscal year 2015/16, compared to 12.8 percent of year-on-year CPI of 12.1 percent in the previous month of the current fiscal year, according to Nepal Rastra Bank (NRB).
  • Huge iron ore reserves have been found in Dhaubadhi VDC of Nawalparasi, 22 km into the forest from the highway, according to a government survey team. The deposits could amount to more than 8 million tonnes, making them the largest in Nepal, said Narayan Banskota, geologist at the Department of Mines and Geology, who has been conducting the survey. The reserves were found during the second exploration of the area.  Banskota said that the iron ore reserves are spread over 100 hectares and lie 250 metres deep in the ground in Pokhari village of Dhaubadhi. According to him, the reserves cover an area of 8-10 km. “The reserves are the largest discovered in Nepal so far.”
  • The government plans to introduce a financial literacy policy shortly in a bid to promote financial access to remote communities and develop the habit of conducting financial transactions through banks. 
  • A recent Nepal Rastra Bank (NRB) study shows that 18 percent of the Nepali people have absolutely no access to financial services while more than 21 percent take loans from money lenders. “Considering that people in remote areas and minority groups lack financial literacy and access to finance, the planned policy aims to take a targeted approach for their inclusion,” said Surya Prasad Acharya, joint secretary at the Finance Ministry. The ministry has prepared a draft of the policy which will be discussed among the stakeholders.
  • The government has agreed to reduce rental charge in the Special Economic Zone (Sez) in Bhairahawa. High rental charge has been blamed for firms’ reluctance to install their production plants in the Sez. In the last one and half years, the Sez Development Committee called for Expression of Interest (EoI) twice, but only 12 firms have so far expressed interest to relocate their factories to the Sez, according to the Ministry of Industry. The Sez, which was officially opened on November 18, 2014, can accommodate 200 factories. At a press meet on Wednesday, Industry Minister Som Prasad Pandey said the Finance Ministry has agreed to amend the Sez’s working procedure, reducing the rental fee.
  • The US has asked Nepal to identify its needs for boosting competitiveness of exportable items so that Nepali products could stay competitive even after the expiry of trade preference program. "We will be taking Nepal government's input on what type of technical assistance it needs to stay competitive for longer time, even after the expiry of the trade preference program by the end of 2025," Deputy Assistant US Trade Representative for India and Nepal Dawn M Shackleford said.
  • The Kathmandu Metropolitan City (KMC) has joined hands with private companies to generate electricity from the organic waste. The KMC has signed an agreement with three companies–Raj and Riwaz, Nepalese Waste and Xeon—to produce 14 kilowatt electricity from the organic waste.
  • The fifth edition of the Nepal International Trade Fair got underway at Bhrikuti Mandap on Thursday with President Bidhya Devi Bhandari inaugurating the mega event which hosts 340 stalls and exhibitors from Nepal, China, India, Pakistan and Bangladesh.
  • Nepal Rastra Bank (NRB) is considering introducing directives allowing banks and financial institutions (BFIs) to check the objects stored in safe deposit boxes by their customers.
  • The move was prompted by the discovery this week of 14 rounds of ammunition in the locker of UCPN (Maoist) lawmaker Lharkyal Lama at the Durbar Marg branch of Nepal Investment Bank. Lama was arrested on Sunday. The central bank wants to make its Know Your Customer (KYC) policy more stringent not only to combat money laundering but also prevent other criminal activities.
  • Senior leaders have advised Prime Minister KP Sharma Oli to sign an agreement with China on the import of fuel. During a meeting between members of the high-level political mechanism and Prime Minister Oli on Friday, top leaders suggested Oli to sign a long-term agreement to import fuel from China during his visit.
  • Nepal is a happier country than India, according to a global report. The World Happiness Report 2016 Update, which was released in Rome on Wednesday ahead of UN World Happiness Day, has ranked Nepal ahead of India, Bangladesh and Sri Lanka in South Asia.
  • The Saarc foreign ministers’ meeting held in Pokhara for the first time is expected to give a big boost to the country’s flagging tourism industry. The high-level meeting that kicked off last Monday is the biggest event organized in the lake city so far, and travel trade entrepreneurs expect it to send a positive message to the global community.
  • The Nepal Stock Exchange (Nepse) index gained 7.65 points this week to close at a record high of 1,326.53 points on Thursday — the last trading day of the week. The stock market is on a bullish trend for the past few months as the regulatory requirement to raise paid-up capital of listed companies of different sectors has buoyed investors.

"This summarized news has been written on the basis of news published on The Kathmandu Post and My Republica during the week"