News Digest: Economy & Development (29 July – 04 August, 2021)

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Agriculture and Food

The government has updated the quality standards for fruit juices and beverages besides introducing new standards for juice made from fruit nectar. The new decision has made provisions to take action against any manufacturer whose juice produce does not match the new standards by charging a fine of NPR 50,000 or imprisonment up to five years or both. Similarly, mandatory quality standards have also been determined for 135 different foods items.

Sugarcane farmers have resorted back to agitations for payment of their remaining dues, seven months after the Ministry of Industry had assured them to make the sugar mills pay them back. As per the previous agreement on December 28, 2020, the sugar mills were supposed to clear all their outstanding dues within the next 21 days. However, both the producers and the government seem to have broken their promise. Sugar producers still owe farmers NPR 250 million, including a subsidy amount of NPR 65.28 per quintal of sugarcane.

The Department of Food Technology and Quality Control has filed case against 100 companies at different district administration offices and courts for selling poor quality and adulterated food during the (FY) 2020/21. Prior to filing the case, the department and its regional office had collected 2,834 samples among which 219 were found to be unfit for daily consumption. Consumables including- drinking water, bakery and biscuits, edible oil and ghee, animal feed, noodles, spices, mixed snacks, sauce and lentils, sweets, milk, curd, dried fruits, rice and so on were identified as adulterated food items.

Tourism and Aviation

The National Assembly on 01 August unanimously passed two bills– Civil Aviation Authority of Nepal Bill and Air Services Authority of Nepal Bill, allowing Civil Aviation Authority of Nepal to be split into two bodies- regulator and service provider. The spilt is anticipated to increase accountability and ensure the service provider to be exclusively responsible for safety and facility of passengers and industry; while the regulator will oversee the regulatory enforcement. Similarly, the bill is also expected to remove Nepali carriers from the air safety list of the European Union and allow them to operate flights in Europe.

A new report published by the International Financial Corporation has revealed that the Annapurna Conservation Area in central Nepal Himalaya can be promoted and branded as a high-end tourism destination with increased investment from the private sector. The report has recommended investment concepts including– conversion of old and abandoned houses into boutique and luxury hotels, establishment of network lodges along the seven-passes trial in Manang and setting up of food franchise in Lower Mustang and Manang to entice more investment and high-spending tourists to help boost the local economy of this region.

Finance and Banking

Finance Minister Janardan Sharma has promised to introduce a provision which shall guarantee cheque clearing facility for cooperative banks. Similarly, provision of social security allowance through cooperative banks and microfinance companies based in rural areas was discussed. Minister Sharma also addressed the discriminatory provisions in disbursement of loans by urging cooperatives banks, cooperatives and micro-finance to reduce interest rate on loans. 

Share Market

The share market has been on a steady rise during last week, setting new records time and again. The market which closed with 3,059 index points on the first trading day of the previous week recorded an index point of 3,080 points by the third trading day. Similarly, on Wednesday, the NEPSE index closed at 3,095 points followed by 3,080 index points on the last trading day. These events have increased enthusiasm among investors despite the unnatural rise in price of shares of certain companies.

The Commission for Investigation of Abuse of Authority (CIAA) has launched an investigation into the alleged involvement of SEBON chairperson and NEPSE CEO in insider trading. According to CIAA, Bhisma Raj Dhungana (SEBON) and Chandra Singh Raut (NEPSE) had each purchased 11,911 shares of Sarbottam Cement under their kin’s name when the company is yet to make its initial public offering. Dhungana and Raut have been accused of buying shares at cheaper rates after getting prior information about potential prices.

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