News Digest – Economy & Development (April 29-May 5)

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Nepal’s economy anticipated to grow by 3.1 percent in 2020/21

According to the Asian Development Outlook, Nepal’s gross domestic product (GDP) is anticipated to grow by 3.1 percent in (FY) 2020/21, from a contraction of 1.9 percent in the (FY) 2019/20. The growth is anticipated due to the gradual lifting of the nationwide lockdown, a pickup in domestic demand, and the ongoing vaccination program.    

Industries output drops following restrictive order

Industries in Birgunj and Bhairahawa have reported a 50 percent downfall while factories in Nepalgunj have reported zero production following the prohibitory orders. This has put the businesses at the brink of collapse; prompting businessmen to urge the government to seal the Southern borders and allow them to operate at a marginal level.

FNCCI request for a revision in income and VAT rate

The Federation of Nepali’s Chambers of Commerce and Industry (FNCCI), has urged the government to revise the income tax and VAT rate in the upcoming national budget; with reduction in income tax from 5 percent to a maximum of 25 percent and VAT rate from 13 percent to 10 percent.

Nepal to lose another year of development activities

Construction and development projects have been held up following the restrictive orders. Disruptions in labour supply, delivery of equipment’s, and raw materials have started hampering development works across the country. Similarly, procuring labourers and essential construction equipment’s from India too has been a hassle for contractors.

Department of Roads allowed to operate despite the restrictive orders

The Department of Roads (DoR) have been allowed to continue with their business per usual to facilitate the spending of the capital budget which stood at a mere 46.37 percent during (FY) 2019/20. Normally, capital expenditure stood at an average of 80 percent; however, months of prolonged lockdowns in the previous (FY) had hampered the spending of capital budget. Considering this, the government has allowed the functioning of DoR.

NGOs and INGOs asked to divert their funds for pandemic relief

The government has requested NGOs and INGOs to divert 5 percent to 20 percent of their approved budget towards the government’s fund for COVID-19 preparedness and response; to be used in supplying medical equipment’s and relief materials for the poor and most vulnerable.

Minimum monthly wage to be raised by 11 percent

The Ministry of Labour, Employment and Social Security (MoLESS) has increased the minimum wage of labourers by more than 11 percent, from NPR 13,450 to NPR 15,000 per month; including NPR 9,385 in basic salary and NPR 5,615 in inflation allowance.

April recorded the highest arrival of international tourists in Nepal

Department of Immigration (DoI) revealed that 22,450 visitors from over 144 countries had visited Nepal during April as compared to the preceding months where January, February, and March recorded 8,874, 9,146, and 14,977, respectively.

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