Implementation of new programs to start: Govt

Despite persisting political uncertainty and absence of full-fledged budget for this fiscal year, the government has continued the process to implement the donor-funded projects to construct strategic bridges and roads.
The Ministry of Finance (MoF) and Ministry of Physical Planning, Works and Transport Management (MoPPWTM) have already agreed to implement the projects funded by the World Bank (WB) and the Asian Development Bank (ADB).
The WB has agreed to extend support worth Rs US$ 60 million to construct the bridges along the strategically significance roads that includes highways and feeder roads. Similarly, the ADB has pledged to provide an assistance of US$ 75 million for strategic roads.
The MoPPWTM, the implementing ministry, has started preparation for tender process for the projects after it received a nod from the MoF few weeks back.
“Given the absence of full-fleged budget, the MoF has given us its consent for the projects in line with the government´s policy not to disturb the implementation of the programs to be run under foreign assistance,” Tulsi Prasad Sitaula, secretary at the MoPPWTM told Republica on Wednesday.
The MoF, National Planning Commission (NPC) and MoPPWTM jointly have reached in an understanding that the donor funded projects should not be disrupted despite the limitation of one-third budget.
As per the pact with the WB last year, the government is obliged to begin the bridge project from the current fiscal year.
Under the strategic bridge project, the government is constructing 100 bridges along different strategic road networks. "Our ministry has already started preparation for tender process. However, we are not in a position to disclose the names of the bridges selected under the project as we will face political pressure to construct the bridges on the roads that are not on project´s purview," said Sitaula.
A joint team from WB and MoPPWTM will finalise the list of 100 bridges to be implemented under the project.
However, the government is still to ink the deal with ADB for the proposed road construction project. “However, we can initiate the implementation of road construction project even without signing agreement under the ´Retro Active Financing´ - a provision that recepient country to lauch the project without signing formal pact on the technical ground,"Sitaula said.
Uner the strategic road project, the government is constructing 600-km long roads which include Sunsari - Chatara - Kanchanpur, Hilepani - Diktel and Diktel - Bhojpur roads. As per the understanding, the ADB will reimburse the amount spent by the governemnt in the construction of roads once the formal pact is signed.

Be aware of changes happening in India: IMF

International Monetary Fund (IMF) has cautioned the government to remain aware of possible risks that the country might face due to vulnerabilities seen in India.
Todd T Schneider, chief of Article IV mission of IMF, issued such warning note when he meet with Finance Secretary Krishna Hari Baskota on Friday.
During the meeting, Schneider and Baskota shared current status of the economy and changes happening across the globe, particularly neighboring countries, MoF said issuing a statement.
The growth rate of India has declined to a nine-year low of 5.3 percent due to slowdown of the manufacturing sector in the April-June quarter of 2012.
“Even though the government has not been able to announce full-fledged budget, macro-economic indicators of the country are quite positive and the government has laid focus on creating favorable investment environment and channeling invest in the productive sector,” Baskota stated.
Additionally, Baskota informed the mission team that the government is continuously working towards reducing the custom duty rates in order to facilitate international trade.

Private sector development policy in the offing

The government is mulling over introducing a Private Sector Development Policy (PSDP) in a bid to foster and deepen the capacity of the private sector after more than two decades of adopting open market economy.
"We have started consultation meetings with umbrella organizations of the private sector such as Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Confederation of Nepalese Industries (CNI) to prepare a draft of the policy," Anil Kumar Thakur, joint secretary at the industry ministry, told Republica.
The government´s preparation to formulate the policy stems from the realization of the importance of the private sector in strengthening the industrial sector and ultimately achieving sustainable economic growth. "The initiative has been taken based on a concept note that the World Bank prepared for us in 2010 for private sector development in the country," Thakur added.
Under the new policy, the government plans to formally recognize the importance of the private sector, give emphasis and pledge support for the capacity development of the private sector. It will also cite responsibility and accountability of the private sector apart from incorporating aspects in which the government and private sector can work together for country´s development.
"Presently, we have asked both FNCCI and CNI to submit their ideas and action plans so that they could be referred as bases for drafting the new policy," Thakur said.
Referring to the slowdown of the industrial sector and its contribution in the gross domestic product (GDP), Thakur said that the government is working to identify the ways for reviving the industrial sector.
According to the statistics compiled by the Ministry of Finance (MoF), the contribution of industrial sector was limited to just 6.2 percent in the fiscal year 2011/12. The contribution of industrial sector in the GDP is constantly decreasing from fiscal year 2001/02.
"Fresh investment is declining from domestic as well foreign investors," Thakur said. "We are hopeful that the new policy we are working on will give new direction to private sector growth and strengthen their capacity to contribute more to the national economy.”
According to Thakur, the policy will incorporate provisions to protect private sector and also pledge necessary incentives in order to make it more vibrant. However, it has yet to be clear what sort of incentives will be incorporated in the policy. "The incentives will be worked out once we receive proposals from the private sector," said Thakur.
The Ministry of Industry has received assistance from International Finance Corporation (IFC) - a private sector lending arm of the World Bank - to prepare the draft.

Nepal seeks cooperation to overcome development bottlenecks

The government has urged the international community for their support to address the special needs and problems that a landlocked country faces on the way of excelling in trade and development.
Dipendra Bahadur Kshetry, vice-chairperson of the National Planning Commission (NPC) made such an appealed to the global partners while addressing the 4th Ministerial Meeting of Trade Ministers of Landlocked Developing Countries (LLDCs) in Kazakhstan on Wednesday.
According to press release, Kshetry pushed mainly for the removal of development bottlenecks such as lack of access to and from sea, and limited transport-transit infrastructure that Nepal faces due to its geographical position.
"The LLDCs have been historically marginalized in terms of international trade and utilizing the potential of global market. Weak export bases and cumbersome transit procedures have rendered the exports from the LLDCs, which is also adding high costs on their competitiveness," the release quoted Kshetry as saying.
He shared the initiatives taken by the government of Nepal such as new Trade Policy 2009 and Nepal Trade Integration Strategy 2010 to boost export and ultimately achieve the goal of poverty reduction.“I request all the trade partners to assist Nepal towards achieving its goal,” Kshetry stated.
The 4th Ministerial meeting of LLDCs had focused on advancing the trade of LLDCs, reviewing aid for trade and taking measures to enhance the role of LLDc in the international trade.

MoI gets budget to cross-verify sick industries

After much fuss, the government has provided Rs 800,000 to the Ministry of Industry (MoI) to conduct a field study of industries that claimed themselves as being ´sick´ and filed applications for relief package.
The technical team that has been formed at the MoI to study the actual status of the industries and check the authenticity of the information provided by more than two dozens such industries will soon begin the field study of those industries.
“We have received a portion of budget that we sought for from the Ministry of Finance (MoF),” Anil Kumar Thakur, joint secretary at the MoI, told Republica. The MoI which is entrusted to carry out the ´relief program to sick industries´ had requested Rs 2.6 million from the MoF to conduct the field study of the self-declared sick industries.
According to Thakur, around 30 firms have applied at the ministry to get relief package that the government is set to provide after identifying their status.
The MoF had expressed reluctance to allocate budget to the MoI referring to the existing one-third budget and constrains it faced in providing budget to new programs. But it released the budget after Finance Minister Barsha Man Pun through ministerial decision instructed the budget division to release the funds, considering the importance of the MoI´s program.
The government had been promising relief package to the sick industries since 2011/12, but the program has not yet been implemented due to a lack of clear definition and parameters to judge the genuine sick industries.
Last year, the government prepared an extensive report suggesting different types of relief packages to the sick industries to revive them. The MoI is presently working to finalizing the list of actual sick industries.

Workers shut down Shikhar Shoes

Shikhar Shoes Industries - one of the leading footwear manufacturers in the country - has remained closed since Friday after workers halted production, putting forth 17-point demand that, among others, include 50 percent hike in basis salary.
“The workers have brought production to a complete halt,” Ram Krishna Prasai, managing director of the company, told Republica.
The workers also attacked Prasai´s residence on Saturday.
Workers affiliated to All Nepal Industrial Trade Union (Revolutionary) had submitted the demands to the management. They have also demanded that the management pay school fee of workers´ children.
Meanwhile, Federation of Nepalese Chambers of Commerce and Industries (FNCCI) has condemned the violent activities of workers. “It is unethical on the part of workers to enter the residence of the company´s managing director and threaten him,” FNCCI said in a statement on Sunday.
The company, which employs 250 people, has said it was ready to settle the differences between the management and workers through talks. “We are ready to show maximum flexibility to address the demands,” said Prasai.
FNCCI, which is trying to facilitate the dialogue between the workers and the management, has said this kind of activities will eventually disturb investment environment in the country.

Draft of ADS envisages achieving 5 pc annual growth

The proposed Agriculture Development Strategy (ADS) -- a long-term vision document that will chart the course of country´s agriculture sector for next two years -- has envisaged intensifying commercialization to increase farm productivity and enhance competitiveness of Nepali farmers to eventually achieve five percent growth in the sector.
The government with the assistance of 12 development partners, including the Asian Development Bank (ADB), World Bank, and United State Agency for International Development (USAID), has formed a technical team involving officials of the Ministry of Agriculture Development (MoAD), experts and stakeholders to prepare draft of the ADS.
The draft, once approved by the government, will replace the Agriculture Perspective Plan (APP) 1995-2015, which has also incorporated an ambitious program for the development of the country´s agriculture.
Before finalizing the draft, the team conducted an interaction with stakeholders on Sunday.
The draft targets achieving annual growth of 5 percent by the end of 2035 by increasing arable land and adopting massive commercialization to increase farm productivity. It has identified frequent changes in government policies and leaderships, and weak implementation the major impediments in agriculture development.
“There must be consistent policies and effective implementation of the government policies in order to achieve a higher agricultural growth rate,” reads the draft.
Similarly, the draft has emphasized efficient use of natural resources and timely availability of agriculture inputs, among others, to boost agriculture productivity.
Underlining the need to ensure proper use of arable land and expanded irrigation facilities, the draft has identified fragmentation of land, tenancy practice and haphazard plotting of fertile land as major factors limiting the farm productivity.
The drafting team has also concluded that the much-hyped APP failed to yield targeted results due to weak implementation of policies owing to ineffective governance system.
Similarly, agricultural commercialization has been identified in the draft as a tool to connect the farmers with the market. The draft has identified agricultural roads -- connecting farms with market -- and establishment of product value chains as keys to farm commercialization.
In a bid to achieve long term goal to transform agriculture into vibrant sector of economy, the draft has proposed enhancing competitiveness of this sector by improving market structure, assuring market for farm products and increasing market access.
The ADS draft also envisages making agriculture sector competitive, sustainable, and inclusive to eventually make it a driving force for accelerating economic growth.