Per capita income of Nepalis doubled in 32 yrs: Report

The Human Development Report 2013 of United Nation Development Program (UNDP) has revealed that the gross national income (GNI) per capita of Nepalis went up by 101 percent between 1980 and 2012 to US$ 1,137 along with improvement in other indicators.
Despite the sharp increase in the GNI per capita, it is still far below the average GNI per capita of South Asian nations which stand at $3,343.
GNI per capita is the dollar value of a country´s final income in a year, divided by its population. The indicator reflects the average income of the country´s citizens in the given year.
The report launched on Tuesday reveals that most of the indicators such as life expectancy at birth, expected years of schooling, mean years of schooling, per capita income, and overall value of human development index have improved during the period.
According to the report, life expectancy of Nepalis at birth has increased by 20.9 years to 69.1 years between 1980 and 2012. Similarly, mean years of schooling has increased to 3.2 years from 2.6 years during the period.
The report that analyzes the human development in 40 developing countries further shows expected years of schooling has increased by 4.4 years to 8.9 years between 1980 and 2012.
According to the report, Nepal´s human development index (HDI) value 0.463 in 2012 is almost double compared to the value in 1980. However, the value is still below the average of 0.466 for countries in the low human development group and below the average of 0.558 for South Asian countries.
The HDI is an average measure of basic human development achievements in a country. In the report, Nepal has been ranked at 157th position out of 187 countries.
Highlighting the main findings of the report, Dr Basudeb Guha-Khasnobis, economic advisor at UNDP, said Nepal should not delay on formulating policies and take further action for human development. "Inaction or procrastination will set the country back immensely," he said.

PTCN bags Dhalkebar-Muzaffarpur transmission line construction license

The government has decided to transfer the license for development and management of the Dhalkebar-Muzaffarpur 400 kV cross-border transmission line to Power Transmission Company of Nepal (PTCN) from Nepal Electricity Authority (NEA).
"The Ministry of Finance (MoF) has given its nod for the hand over of the license," a high-level official at the Ministry of Energy (MoE) told Republica.
Earlier, NEA had bagged the license from the government to develop the transmission line. The PTCN is a subsidiary of NEA that was set up mainly to develop the 400 kV cross border transmission line.
The transmission line, which is supposed to be developed with loan assistance from the Exim Bank of India, is expected to facilitate power trade between the two countries. The transmission line will be 140 kilometers long and 40 kilometers section, from Dhalkebar to Bhittamod, will lie in Nepal.
Nepal and India had signed a memorandum of understanding in 2009 to develop the project in fast track mode. NEA had signed the MoU with three Indian stakeholders -- Power Trading Corporation (PTC), Infrastructure Leasing & Financial Services (IL&FS) and Power Grid Corporation of India Ltd (PGCIL).
As per the agreement, Nepal and India are to lay the transmission line in their respective countries with loan assistance from the Exim Bank of India. But the Exim Bank has yet to release the loan pledged to Nepal.
Similarly, the two countries also plan to lay other two cross-border transmission lines -- 112 km 400 kV Duhabi-Purnia and 125 km 400 kV Butwal-Gorakhpur.
According to NEA officials approximately 22 km section of the Duhabi-Purnia transmission line lies in Nepali territory and around 90 km section lies in India. Similarly, approximately, 25 km section of the Butwal-Gorakhpur transmission line falls under Nepali territory and the remaining 100 km section in India.
However, the Ministry of Energy -- the body entity to look after the energy sector of the country, has yet to approve the hand over of license from the NEA to PTCN. "MoE is also prepared to give its nod to the handover of the license of Dhalkebar-Muzaffarpur transmission line to PTCN," the official at the MoE said. "However, a formal decision has yet to be made."

India blamed for low intra-regional trade

Indian officials have said that the union government can´t impose any rule on state governments even though the latter ones are acting against the spirit of bilateral trade agreements between Nepal and India.
“The union government can´t force state governments on issues related to bilateral trade agreements," Sandep Kumar, commissioner (international customs division), Central Board of Excise and Customs under Department of Revenue of the Indian government, said.
Talking about country positions on non-tariff barriers (NTBs) - different obstacles that traders face other than customs duty - in South Asia at a regional conference here on Thursday, Kumar said the Indian government may not always be ready to remove all kind of NTBs.
"NTBs are always not bad, sometimes they serve some specific interests of the country," Kumar told a conference organized jointly by CUTS International, a think tank based in India and The Asia Foundation.
Nepali traders have been facing several hurdles due to different provisions enforced by the Uttar Pradesh (UP) government. Medicinal herbs worth around Rs 350 million was stuck in Nepalgunj customs point for several months last year after the UP government introduce a new law that contravenes the bilateral trade agreement between the two countries.
“The state governments can formulate their own laws,” Kumar said, answering a query on whether the whether the central government can intervene when the state governments formulate laws that go against the spirit of bilateral agreements.
Meanwhile, businessmen, officials and experts from the South Asia region have said most of the NTBs are outcomes of policies created by the government with political intention.
“Political intention is the main reason behind introduction of NTBs,” Robina Ather, joint secretary at Customs and Trade Policy under Pakistan´s Ministry of Commerce, said. “It is because of India that intra-regional trade stands at such a low volume.”
Businessmen from the region have urged governments and stakeholders to focus on development of cross-border infrastructure and ease visa process for the traders. "The governments of all the countries from the region should put effort on cross-border infrastructure development," Kosala Wickramanayake, former president of Federation of Chambers of Commerce and Industry of Sri Lanka, said.
Meanwhile, officials and experts from the region have urged for diversification of products and markets instead of competing in the same market with almost same kind of goods. They have also stressed the need to focus on intra-regional trade by removing different barriers.
"Most of the countries from the region produce same kind of products such as textiles and compete for the American or European market," Indira Murthy, director of Foreign Trade at India´s Department of Commerce, said.
Bipul Chattargee, deputy executive director of CUTS, said SAARC Chambers of Commerce and Industry should assist the governments in order to minimize NTBs.

Udayapur Cement seeks Rs 200m to buy raw materials, generator

Udayapur Cement Factory has asked the government to provide it a fund of Rs 200 million to buy raw materials and generators, and to upgrade obsolete machineries.
The state-owned cement manufacturer, which had been seeking financial assistance from the government since last year, submitted a proposal to this effect to the Ministry of Industry (MoI) last week.
"We need funds to procure raw materials and buy a generator,” Surendra Chaurasiya, general manager of Udayapur Cement Factory, told Republica over phone.
The government had not released any amount of money to the factory last year due to its failure to release full-fledged budget on time.
“I am hopeful that the government will arrange funds this time,” said Chaurasiya.
The factory with installed capacity of 500 tons is also suffering from overstaffing and obsolete machineries. The factory has 525 staff on its payroll.
“We need to upgrade the machines if we are to ensure smooth supplies in the market,” he added.
The MoI, which looks after state-owned enterprises, has decided to forward the factory´s proposal to the Ministry of Finance (MoF).
“At the moment, we are studying the proposal submitted by the cement factory,” an official at MoI said.
Earlier, officials of MoI had said that they were working on to address problems faced by the cement manufacturer.
Lack of raw materials is the biggest problems faced by the factory. As the factory sources key materials, including coal, from India, the government´s procurement policy creates hassles to it time and again. “Because of the policy we cannot take prompt decision as per the market mechanism to procure required amount of raw materials," he added.
The factory, which was established around 18 years ago with Japanese assistance, is also losing its production capacity due to obsolete machineries. "Some of our machineries are 18 years old. We need to replace them as soon as possible,” Chaurasiya said, adding, “But we need a huge amount of money for that.”
The factory has cumulative loss of Rs 17.73 billion. The MoI had even requested MoF to arrange Rs 1 billion last year from the Russian government. However, the MoF didn´t forward the request to the Russian government.
The study of public enterprises conducted by the government in fiscal year 2011/12 had suggested upgrading machineries of the state-owned cement manufacturer.

Economists slam budget, pvt sector welcomes it

The full budget that Finance Minister Shankar Prasad Koirala on Tuesday has received mixed reactions. While the private sector representatives have welcomed the budget, economists have slammed it, terming the budget a mere ritual activity.
Republica requested some private sector representatives and economists for their comments on the budget over phone. Excerpts:
Prof Dr Bishwambher Pyakuryal
Economist
This budget will increase inflation rather than bringing down its mounting pressure on economy. Trade deficit is constantly increasing but the government has not devised any specific plans to address the problem. I don´t think this budget will increase capital expenditure as it has only made allocations to government agencies to fund their activities. There is not much flexibility for any policy level changes owing to short period of time.
Still, the budget could have been better in terms of addressing problems that are affecting the overall functioning of the economy.
Narendra Basnet
President
Confederation of Nepalese Industries
The government has introduced some policies despite the difficult situation which is appreciative. I welcome the government´s move to bring budget at this time. In the budget, the government has said that it would encourage private sector, which is meaningful for us. The finance minister has stressed the need to attract investment from the private sector in areas like hydropower and tourism. This should be appreciated.
The budget has several programs, but we will have to wait and see how they will be executed in the next three months. I am hopeful that the country´s economy will take a right path with this budget
Pashupati Murarka
Vice president
FNCCI
This budget will help resolve the liquidity strains in the banking system. The government has allocated relatively bigger amount of money for recurrent expenditure. Also there will be capital expenditure. I am hopeful that this will give a new lease of life to the construction sector. Contractors will get payment which will definitely lead to more economic activities.
I don´t think this budget will be a pill for all ills in the economic sector. But it definitely has given some respite to the private sector. The government has introduced many programs; I am hopeful that they would be implemented accordingly.
Dr Posh Raj Pandey
Economist
The budget is just a ritual activity of the government. It will not give any direction to the economy. The government has just given some additional budget to the on-going projects and some other less significant projects. I don´t think this will make any difference to our present situation.
The government, however, has tried to address some short-term problems that were affecting regular functioning of development works and state mechanisms. The government has made allocations for the proposed election. I think the performance of this government should be measured based on how it moves ahead to hold election.
Suresh Basnet
President
Nepal Chamber of Commerce
This budget is just a continuation of old programs. However, it has energized the private sector as it addresses the private sector and its woes. I am hopeful that the budget will be successful in lead the nation´s economy to the right track. The budget has touched several areas such as trade and investment which is important for us.
Moreover, this budget has increased the level of confidence among private sector. I am hopeful that the introduction of full budget will spur economic activities in the country.

FNCCI to seek political commitment for hydropower development

The Federation of Nepalese Chambers of Commerce and Industries (FNCCI) has sought political commitment on eight specific areas for hydropower development in the country.
The apex body of Nepali private sector has sought commitment of the political parties on political stability, regulatory and institutional framework, infrastructure development, private investment and financing, export of electricity, social and environmental concerns, and political mobilization, education and awareness.
Leaders of different political parties will express their commitments to the aforesaid issues by signing a document entitled ´Political Commitment on the Development of Hydropower´ on the sidelines of the 47th annual general meeting of FNCCI on Wednesday.
The document developed by FNCCI includes points such as common principles and policies for hydropower development.
FNCCI decided to seek commitment of political parties to make sure that mega hydro projects move ahead without hindrance.
"The primary objective of this commitment letter is to set out the common principles that various political parties adhere to for the development of hydropower in Nepal," reads the draft of the document.
FNCCI has already decided to make hydropower the main agenda in its 47th AGM.
"Both domestic and foreign investors are skeptic about political situation and governance system in the country,” reads the document. “Political parties should recognize and declare hydropower a national priority sector and ensure that their activities do not hamper development and operation of hydropower projects and put investors at risk.”
FNCCI has also put emphasis on regulatory and institutional issues in the hydropower sector. "Political parties should be committed to support and facilitate plans, policies, laws, regulations and actions that are aimed to achieve planned and sustainable development of hydropower," the document states.
The document categorically pinpoints inefficiency of Nepal Electricity Authority (NEA) as one of the reasons behind slow pace of hydropower development in the country. “There is also a need to restructure NEA as a whole to develop a competitive market in the country," the document reads.
Similarly, FNCCI is also seeking commitment of political parties on private investment and financing in the hydropower sector. It is also asking political parties to commit to the investors that hydropower development works would not be affected even after the country adopts federal setup.

Govt to scrap 600 survey license applications

The government is preparing to scrap around 600 applications for survey licenses of hydropower projects as the applicants didn´t turn up to deposit the license fees even after the expiry of the government´s 35-day notice.
“We have started the process to scrap the applications as the applicants didn´t turn up to pay the license fees,” said Gokarna Raj Pantha, senior divisional engineer at the Department of Electricity Development (DoED).
The DoED had issued a notice around one-and-a-half month ago asking all the applicants to pay fees on time. “Only around five applicants paid the license fees on time,” said Pantha. “Similarly, around five applicants have moved the court after the government issued the notice.”
According to Pantha, the applications for survey license had been received for all kinds of hydropower projects -- small, medium and large scale. “We had received applications for survey licenses of big projects such as the 660 megawatts Kali Gandaki to small hydropower projects with less than 1 megawatt capacity,” said Pantha.
DoED had issued the notice after the government increased application fees for all kinds of hydropower projects in October 2012. The government had increased the survey license fees aiming to check the practice among developers of holding survey licenses without working on the projects.
Survey licenses for hydropower projects have been divided into six different categories. The new rates for survey licenses are: Rs 1 million for hydropower projects with 1 to 5 megawatts capacity, Rs 2 million for projects with 5 to 10 megawatts capacity, Rs 3 million for 10 to 25 megawatts projects, Rs 4 million for 25 to 100 megawatts projects, Rs 5 million for 100 to 500 megawatts projects and Rs 6 million for projects above 500 megawatts.
However, Pantha clarified that the 600 applications may not belong to different projects. “There may be several applications for the same project,” he said.
“There was a negative tendency among applicants of holding licenses as the fee was very nominal,” Pantha added. “The government has now taken a strong measure to discourage license holders with ulterior motives,” Pantha said.