Finance Minister Janardan Sharma on September 10 presented a replacement bill in the House of Representatives (HoR), making amends to the previous annual budget for fiscal year (FY) 2021/22 introduced by the Oli led government. The major highlights of the replacement bill are:
- The annual financial plan has been reduced from Nrs. 1.647 trillion (USD 13.99 billion) to Nrs. 1.632 trillion (USD 13.86 billion); a reduction of Nrs. 15 billion (USD 127 million).
- The proposed internal and foreign debt of the country has reduced by Nrs. 37 billion (USD 314 million).
- Under the social security allowances, family members of people killed during political protests and events will receive Nrs. 3000 (USD 25.49) per month and patients of kidney diseases, cancer and paralysis due to spinal cord injury will receive Nrs. 5000 (USD 42.48) per month.
- 10 free lunch spaces are to be built for the poor and vulnerable inside the Kathmandu valley.
- Nrs. 10,000 (USD 84.95) is to be granted to 500,000 families who lost their source of livelihood due to the COVID-19 pandemic.
- Allowances of government officials have been reduced by 10 percent.
Money and Banking
Nepal Rastra Bank (NRB) has issued a warning caution to halt any operation related to the transaction of cryptocurrency across the country. The Government of Nepal (GoN) is yet to legitimize the digital currency. Considering this, the central bank in its notice has announced individuals found involved in transaction of the digital currency to face legal actions under the Foreign Exchange Regulation Act 2019, as a bid to stop any transaction, usage and mining of the same.
The government in its new replacement bill has made it mandatory for cooperatives to invest 50 percent of their loans towards the development of the agricultural sector. The bill has also introduced new provisions to monitor and inspect the policies and mechanisms of cooperatives around the nation; in a bid to increase customer’s trust in them.
Nepal recorded a slight increase in its foreign direct investment (FDI) inflows. According to a study conducted by the central bank titled ‘FDI in Nepal (2019-20)’, FDI inflow increased by 8.5 percent to reach Nrs. 198.25 billion (USD 1.65 billion) by the end of fiscal year (FY) 2019/20. The inflow contributed around 4.7 percent towards the gross domestic product (GDP) during the same review period.
Investment Board of Nepal (IBN), on the occasion of its 10th anniversary, has set forth a target to approve investments worth Nrs. 1.177 trillion (USD 10 billion) over the next five fiscal years. Similarly, IBN released its ‘Strategic Plan’ with a goal of managing private-public partnership projects worth Nrs. 706 billion (USD 6 billion) within the next five years. The plan also aims to create 100 thousand jobs alongside ensuring a more business friendly environment for domestic and international investors in Nepal.
The government via the new substitution bill has hiked the tax on two-wheelers wherein excise duty on bikes of 500 to 800 CC has increased by 20 percent while the excise duty on bikes of 800 CC has been maintained at the previous rate of 100 percent.
ICT, Infrastructure and Energy
Nepal Oil Corporation (NOC) has revealed that the operation of Nepal-India Petroleum Pipeline (from Motihari, India to Amalekhgunj, Nepal) has resulted in a saving of Nrs. 3 billion (USD 25 million) over the last two years. Reduction in transportation and technical cost has been attributed for this save in money.
Nepal Electricity Authority (NEA) revealed that the domestic demand and consumption for electricity across the nation reached an all-time high of 1600 MW on September 12. Electricity consumption for the same day was recorded at 32.5 million units.
Ministry of Communication and Information Technology (MoCIT) has issued a ‘Directive Related to Development and Management of Website of Government Offices 2021’, in the Nepal Gazette requiring all government offices to develop and operate its website in compliance with the constitution and other national laws of the land.
The Nepal Stock Exchange Ltd (NEPSE) increased by 71.43 points and 0.28 points followed by a reduction of 18.54 points to record an index point of 2947.42, 2947.70 and 2929.29 points respectively during the first three trading days of the week. A total of 27.73 shares of 231 companies were traded resulting in a turnover of Nrs. 14.63 billion (USD 122 million) during the same period.