Top Economic news for this week- 20th Chaitra to 26th Chaitra

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Chaitra 20, 2072- This week's main events that provide insight into current Nepalese economic environment have been briefly presented below:

  • In a major reform initiative, a joint meeting of three parliamentary committees is directing the government to lift a provision that makes it mandatory for development projects to acquire arable land as compensation for forests destroyed in course of project development.
  • Western Regional Hotel Association Pokhara, in partnership with Nepal Tourism Board (NTB), organized a promotional program entitled ‘Chaliye Pokhara’ translated as ‘Visit Pokhara’ in four Indian cities. The 27-member delegation from Nepal, which kicked off this 5-day promotional tour in Kanpur on 27 March, was greeted with an enthusiastic and positive response from the local travel trade, and also the local media.
  • The '1st International Women's Trade Expo 2016' concluded in Kathmandu on Sunday, recording transactions of around Rs.50 million. According to officials of the Federation of Women Entrepreneurs' Associations of Nepal (FWEAN) – the organizer of the event, the three-day event drew 50,000 footfalls.
  • The government is preparing to introduce a new law to regulate commodity trading. The law is being drafted as many problems have been seen in operation and functioning of commodity market in the lack of proper legislation and regulatory body. Securities Board of Nepal (Sebon) it has finalized a draft bill to manage and regulate the commodity trading market system.
  • An international coalition of media outlets on Sunday published what it said was an extensive investigation into the offshore financial dealings of the rich and famous, based on a vast trove of documents provided by an anonymous source. Iceland's Prime Minister Sigmundur Gunnlaugsson, Saudi Arabian king and seven Nepalese are also in the list. However, the names of the Nepalese have not been disclosed.
  • Tourists visiting Fewa Festival to be organized on the occasion of Nepali New Year 2073 will get 20 percent discount on accommodation. The festival will be organized at the banks of Fewa Lake from April 10-14 with an aim to attract internal and foreign tourists.
  • Economists have suggested to the government to strengthen the law to curb the illegal outflow of money from the country. Their suggestion came a day after the Panama papers leak that has also fingered 7 Nepalese having partnership firms in several tax havens.
  • Nepal Oil Corporation (NOC) has decided to hire another 50 tankers from two Indian companies to transport liquefied petroleum gas (LPG) in a bid to boost imports.
  • With economic activities coming back on track, lending of bank and financial institutions (BFIs) is also increasing gradually. Commercial banks extended credit of a total of Rs 34 billion in the last month after India lifted economic blockade in the second week of February.
  • Hydropower Development Policy, an elaborate document of Nepali hydropower sector, was introduced 15 years ago. But the policy has not been translated into laws and brought into implementation accordingly.
  • Stakeholders of hydropower sector say hydropower laws that date back to 1990s do not address problems seen in hydropower development. They have been demanding that the government bring new laws, particularly Electricity Act and Electricity Regulation Act. But works to bring these laws are moving ahead at a slow pace. Officials of Ministry of Energy have been working on those laws for the past one and half months. They have been repeatedly asked to table draft of those bills to parliament. But instead of giving finishing touches to draft, ministry officials are preparing new drafts.
  • The government of India has agreed to provide Rs.366 million grant to Nepal to control river erosion. At a program organized at the Irrigation Ministry today, Irrigation Minister Umesh Yadav and Indian Ambassador to Nepal, Ranjit Rae exchanged letters in this regard.
  • As the country reels under severe LPG cylinders crisis, NOC Managing Director Gopal Khadka on Wednesday said that the crisis will end very soon. "The crisis is due to around 50 percent unfilled LPG cylinders," Khadka added, "The import has gone up so the crisis will end soon." However, Government officials and liquefied petroleum (LP) gas bottlers have blamed consumers for the prolonged shortage of the popular cooking fuel. Gokul Dhital, director general of Department of Supply Management and Consumer Protection (DoSMCP), said LP gas shortage is not easing as household consumers are keeping many LPG cylinders in stock.
  • Standard Chartered Bank Nepal Limited (SCBNL) and Nepal Certifying Company (NCC) have signed an agreement to deliver Digital Signature and Certificate (DSC) to the bank. Issuing a statement on Wednesday, SCBNL said that it would be the first commercial bank in Nepal to use the digital signature and certificate.
  • The capacity of the proposed solar plant to supply power to Singhadurbar premises has been reduced to 1 MW due to lack of sufficient space to install solar panels. Several buildings in Singadurbar premises have become uninhabitable after the earthquakes of 2015, while many buildings have truss roofs making them unfeasible for solar panel installation, according to officials of Ministry of Energy (MoE).
  • Nepal’s farm sector is likely to see a negative growth rate as the winter crop output is expected to shrink by double digits due to deficient rains and fertilizer shortage following a poor summer harvest. It is too early to predict the growth rate, but the scenario doesn’t look good, the Ministry of Agricultural Development said. 
  • The Department of Supply Management (DoSM) said it had started an investigation into price hikes of essential goods following complaints about a shortage of mustard oil and a rise in the price of sunflower oil. Wholesale prices of sunflower oil have jumped by Rs15-20 per litre while retail prices have soared by Rs50-60 per litre. Meanwhile, mustard oil has become scarce in the market. Government officials had asked for an explanation from manufacturers of edible oil and have also asked the producers to provide a list of their cost price and maximum retail price.
  • The parliament's International Relations and Labour Committee said Wednesday that the services fees collected from foreign tourists has not been utilized for the benefit of tourists and called for using it to increase services to them. The committee instructed the government to utilize the funds from the service fees collected from tourists to maximize investment on tourism services.
  • More than half dozen prospective lenders for the Upper Karnali Hydropower Project are submitting the project appraisal report to the boards of their respective organisations after their meeting with the project’s developer GMR India, sources have said.
  • The Tourism Ministry has embarked on a Rs9.74-billion scheme to acquire another 288 bighas of land to expand Gautam Buddha Regional International Airport in Bhairahawa, three months after starting a land acquisition process for 140 bighas. The ministry has sent the proposal to the Finance Ministry for its go-ahead before submitting it to the Cabinet. The existing domestic airport will be transformed into a regional international airport spread over 715 bighas by 2017. 
  • The number of suspicious transaction reports (STRs) that Nepal Rastra Bank (NRB) receives from various financial institutions has been rising sharply in recent years, indicating that a huge amount of dirty money has been flowing through Nepal's financial system.
  • Investment Board Nepal (IBN) and International Finance Corporation (IFC) have said that Indian infrastructure major GMR cannot sell its shares in GMR Upper Karnali Hydropower Ltd until at least seven years. They said any transaction of shares before that would be against Project Development Agreement (PDA) that GMR signed with IBN in 2014. Breach of any clause in PDA might lead to termination of PDA, according to officials.
  • Market prices of daily essential commodities have soared as a result of transportation cartels and higher freight charges, traders said.
  • Cargo fares have jumped by Rs.5,000 in the last one month. Traders said that the charge for hiring a 10-tonne truck had gone up from Rs.18,000 to Rs.23,000. This has led to a rise in the shipping costs of essential goods by Rs1 per kg. The transportation syndicate in Birgunj has been implementing an odd-even system since March under which trucks with an odd licence plate number ply on odd dates and those with an even number are allowed on the roads on even dates. Using this system, the Tarai Transporters Association (TTA) allows a truck to load cargo every four days which has limited the number of trucks available for hire. Traders have accused the police administration of acting in collusion with the syndicate.
  • Department of Electricity Development (DoED) has decided to award development licences of two mid-sized run-of-the-river hydropower projects to Remit Hydro Limited (RHL), a wholly-owned subsidiary of Hydroelectricity Investment and Development Company Limited (HIDCL). The department within a week will recommend the Ministry of Energy that RHL be issued the licences for the development of 71.5MW Ghunsa Khola Hydropower Project and 53.7MW.

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