Export up, consumer price index low

By a Post Reporter

KATHMANDU, Feb 29 - During the first half of the current fiscal-year 1999/2000, the growth of narrow money has accelerated while that of broad money has decelerated, according to a communique issued by Nepal Rastra Bank.

Government expenditure has accelerated due to a significant growth in development and freeze expenditure. Higher budgetary deficit has been observed as a consequence of low resources mobilization in relation to expenditure. The rate of inflation on point to point basis has come down to a single digit from two digits because of improvement in the prices of food and beverages group. In the external front, although growth rate of export has outpaced that of import, trade deficit has widened substantially due to high volume of imports as compared to exports. The foreign exchange holding of the banking system has recorded a rise due to a surplus in balance of payments emanating from flows of official capital and miscellaneous capital net. The foreign exchange reserve is sufficient to cover merchandise imports of 10 months. The NEPSE share price index has improved in comparison to last month, says the release.

During the first six months of the fiscal year 1999/2000 the broad money has registered a decelerating growth of 6.9 percent (RS 10,546.7 million) amounting to Rs 163,442.3 million from 11.2 percent (Rs 14,172.3 million) during the same period last year. This is mainly due to the decline in the growth of net domestic assets of the banking sector during the review period. Narrow money has, however, accelerated significantly by 9.5 percent (Rs 4,862.7 million) as compared to the growth of 4.6 percent (Rs 2,065.1 million) last year. The growth rate of time deposit in the review period has slowed down to 5.6 percent (Rs 5,684.0 million) from 14.9 percent (Rs 12,107.2 million) in the previous year. A downward revision in the interest rate ranging from 1.50 to 2.0 percentage points as compared to mid-January 1998 is attributed to the low growth of time deposit in the review period.

According to the communique, during the review period, bank credit to the private sector has increased by 7.6 percent (Rs 6918.9 million) amounting to Rs 97710.8 million. Last year, such a credit had increased by 9.7 percent (Rs 7423.6 million). Although there has been a growth in import credit, the total credit flow to private sector from the banking system has remained low as compared to that of last year due to slow pick up of credit to industrial and other sectors.

On the fiscal front, government expenditure has increased by 22.6 percent amounting to Rs 23,251.2 million as compared to a growth of 8.4 percent last year. The rise in such an expenditure is mainly due to the significant rise in regular expenditure by 15.1 percent, development expenditure by 45.7 percent and freeze expenditure by 28.1 percent. Expansion of development programmes in the public sector this year has contributed for the significant growth of development expenditure. During the review period, the growth of resource mobilization stood at 15.7 percent amounting to Rs 19,654.6 million as compared to the growth of 17.6 percent last year. Revenue collection, a major source of resources mobilization, stood at Rs 18,119.3 million marking a 13.7 percent growth as compared to 14.6 percent growth last year. Another source of resource mobilization viz, foreign cash grant has increased by 7.8 percent to Rs 1,198.4 million. Resources mobilization has remained lower than the expenditure during the review period resulting in budget deficit of Rs 3,596.6 million. The government has overdrawn Rs 346.2 million from Nepal Rastra Bank along with issuing treasury bills worth Rs 1,550.0 million to meet the resources gap created by the declining receipts of foreign cash loan.

The release says, national urban consumer price index on point to point basis has been recorded at 2.3 percent during the review period compared to 13.4 percent last year. The decelerating trend in the price of food and beverages helped to lower down the national price index to a single digit. The price index of the food and beverages group increased slightly by 0.3 percent in the review period as compared to an increase of 18.5 percent last year. Despite a pressure in the price of foodgrains, the declining prices of oil and ghee, vegetable, pulses, sugar and sugar product as well as spices has been accountable for the lower growth in the price index of food and beverages. The prices of non-food and services has surged up by 6.1 percent this year as compared to 4.5 percent last year. The higher price rise in the non-food and services sub-group is mainly due to upward revision in the prices of petroleum products and electricity. Regionwise, prices in Hills has recorded the highest growth of 3.1 percent followed by respective growth of 2.4 percent and 1.8 percent in Terai and Kathmandu.

On the external front, exports have increased by 41.9 percent to Rs 23,517.8 million and imports also have been gone up by 35.5 percent to Rs 51,783.2 million. In the export side, export of ready-made garments, carpet and jewellary followed by Pasmina has shown a growing tendency. During the review period, Rs 2,7110.0 million worth of Pasmina has been exported. However, exports of pulses tanned skin, and nigerseed have declined during the review period. Export-import ratio, which was 43.5 percent last year, has increased slightly to 4.5 percent during the review period. Surge in total import is attributed to higher imports of foodgrains, medicine, cement, textile, thread, glass and transportation goods from India and gold, raw wool, cotton, transportation goods and spare parts, construction materials and steel sheet from third countries. As a result of growth in both exports and imports, total trade has increased by 37.5 percent in contrast to a decline of 5.8 percent last year. Share of India in total trade, has increased from 34.9 percent last year to 39 percent in the review period, adds the release.

Based on the available statistics for the first four months of this fiscal year, the balance of payments has remained favourable by Rs 1,130.9 million. In the review period, the growth in trade deficit outpacing the increase in net service as well as transfer income has resulted in the current account deficit of Rs 1,682.1 million. However, a substantial inflow of official capital and miscellaneous capital item net have helped balance of payments to register a sizable surplus. Based on the monetary statistics for the first six months of the current fiscal year, overall balance of payment has recorded a surplus of Rs 5,793.4 million. As a result, foreign exchange holdings of the banking system has increased by 14.6 percent to Rs 8,361.9 million as at mid-January 1999. Of the total reserve, 90.2 percent accounted for convertible currency and 9.8 percent for non-convertible currency.

Training centre for marine job to be set up

By Vijaya Babu Khatri

KATHMANDU, Feb 29 - With an intention to improve skill and capacity of Nepali workers aspiring to go abroad for marine job on ships, Labour Ministry is preparing to establish a training centre.

A Britain-based Gorkha International, a manpower-training agency, through its Nepal-based agent British Gorkha Overseas has already registered a proposal with the Ministry of Labor for the establishment of the training centre. Gorkha International registered the proposal last month seeking ministry’s permission. The manpower-training agency has said it would train interested labourers from the SAARC region.

The company in its proposal has also mentioned that it would send immediately Nepali workers abroad for job after they acquire training.

The intended training centre will be, however, only a transfer of the centre currently run by Gorkha International in the Philippines. The company is said to be interested in shifting the training centre due to low training cost in Nepal and increasing demands for marine labourers from the SAARC region.

Currently, Labour Ministry is trying to comply with the necessary international legal requirements for the establishment of such a training centre. Nepal requires to sign an international treaty drafted by International Marine Association on, "Standard for Training Certification and Watch Keeping for Sea Affairs 1978," to set up such a centre.

Kumar Prasad Joshi, official at the foreign employment division at the Labour Ministry informed that the ministry is preparing to table the international treaty in the upcoming parliamentary session. Nepal is expected to sign the treaty after parliamentary approval.

Joshi also informed that the Company has proposed Begnash Lake in Pokhara as the spot for training. The Company is also learnt to have mentioned in its proposal that training cannot be conducted in running water. But decision regarding the spot will be taken only after assessing the environmental and cultural impacts of using the lake as the training spot.

Manpower agencies dealing with the foreign employment of surplus Nepali labourers say the demand for ship labourers is increasing. Nepali workers are demanded mainly from the Philippines, Hong Kong and Singapore. Ministry officials also agree that over three hundred Nepali workers have already gone abroad as marine workers. However, they land-up into a low paid job due to lack of training and experience in the marine works.

As the marine job demands a long voyage in the sea, workers from developed countries are becoming increasingly reluctant to offer themselves.

Exports diversification stressed

By a Post Reporter

KATHMANDU, Feb 29 - Minister for Finance and Foreign Affairs Ram Sharan Mahat has stressed for diversification in the exports of the country to enhance economic growth rate.

He said, "Considering the volatility of markets abroad, the dependence of the country on a few exportable products is dangerous. There is a strong need for diversifying our exportable items."

He was addressing the inaugural session of the silver jubilee celebration and 25th general meeting of Nepal Foreign Trade Association (NFTA) in the capital today.

"The open market-oriented liberal economy demands greater exports in order to intensify the country’s growth rate. History shows that export oriented countries in the world, with an export promotion strategy for industrialization, have attained an accelerated rate of economic growth," he observed.

Citing the examples of South Asian and South East Asian countries whose per capita income in the 1960s were almost the same, he said adding, within a span of about 30 years, a tremendous difference has arisen in their per capita income.

Presently, the per capita income of South Asian countries is only about US $ 500 while that of South East Asian countries has touched US $ 11,500 he clarified.

Mahat also stressed on the need to enhance the competitiveness of Nepalese products in the context of a globalized economy.

Moreover, stressing that an excess liquidity of Rs 36 billion exists in the country, he emphasized on the need to invest into productive sectors, which would help in meeting the objectives of greater employment and poverty alleviation.

Speaking on the occasion, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Pradip Kumar Shrestha pointed out the need to bridge the existing trade deficit of Rs 51 billion in import-export front.

He said, "In the context of global trade, the role of the private sector should be pro-active. In addition, Nepal should prepare itself for joining the World Trade Organization (WTO) by reviewing the existing acts and policies."

He also informed that FNCCI is formulating a WTO cell and a cell for institutional development.

On the occasion, president of the NFTA Lokmanya Golchha highlighted some of the major problems facing the business sector.

He said, "The mode of collecting income tax and the intransparent system of revenue collection has posed serious problems for the business community."

He also said that the SAFG (South Asian Federation Games) tax still being collected by the government is unjustifiable.

Prime Minister, Krishna Prasad Bhattarai had assured to immediately scrap the SAFG tax a few weeks ago. However, Minister Mahat today said that the tax is still being collected to cover a deficit of about 80-90 million rupees.

On the occasion, the association released Silver Jubilee, 2056, a souvenir.

Smuggling trade continues

KATHMANDU, Feb 29 (PR) - Despite the full-fledged implementation of Value Added Tax (VAT), smuggling trade continues unabated.

Dr Rup Bahadur Khadka, a VAT expert, said this today at an interaction programme on VAT organized by Forum for Economic Studies (FES) under the Tribhuvan University, Economics Department Kirtipur. Dr Khadka disclosed that potential taxpayers still have not been registered with the VAT that has gradually been hindering the implementation of this new tax system.

The tax is expected to discourage smuggling provided its effective implementation. This also frees the taxpayers from the pyramid of tax which will not make them pay undue taxes, Khadka said. He informed that as of today the number of taxpayers registered with VAT has reached 16,000, which is on the rise. Out of the figure, about 12 percent taxpayers were registered voluntarily with VAT, he added.

A gathering of more than 50 students of economics participated in the programme.

Earlier, Rabindra Sharma, president of FES briefed about the programme.

QA’s automation at TIA

KATHMANDU, Feb 29 (PR) - Qatar Airways is going to introduce full automation system at the Tribhuvan International Airport (TIA) with effective from March 1, 2000, according to Regional Manager of the Airways, Arjun K Gang.

Talking to The Kathmandu Post, Gang said Qatar Airways is the first airlines to introduce such a modern computerized departure control system at the TIA. For ensuring satisfactory operation of new system, Qatar Airways has commenced a training programme for Royal Nepal Airlines’ staff who handle Qatar Airways flights. Earlier, a two-week long training was organized for Qatar Airways-GSA staff from February 17 till 28th. He also said that Departure Control System is a very effective tool from security point of view.

Trainer Christine Verreydt said the system is very effective which helps a passenger to reach his final destination. If a passenger has to go to London via Doha from Kathmandu, he will be provided boarding passes right in Kathmandu which work for his complete journey, she said.

Training on VAT

By a Post Reporter

KATHMANDU, Feb 29 - Patan Jaycees has developed its training package on Value Added Tax (VAT) with a view to provide training to the business community.

The Jaycees recently conducted training on VAT on the basis of the training manual it developed.

Coordinator of the training programme Jaycee Gopu Shrestha says they carried out the training just to inform the business community about the tax system strictly maintaining fairness, not in for or against VAT.

Giving away certificates to the participants, Patan Jaycees chairman Jaycee Arun Man Joshi said that the programme was organized to educate the consumers on VAT. Kedar Lal Khoshi, chairman of Lalitpur Chamber of Commerce also spoke on the occasion.

Shares
Nepal Stock Exchange
Singhadurbar Plaza, Kathmandu

29 February , 2000

              Trading Information                                        Trading Price              

Paid-up value of S. N. 8  is 57.

Paid-up value of S. No.  22  is 85.
Paid-up value of S. No. 10  is 10.
Paid-up value of S. No.  23  is 60.
Paid-up value of S. No.  24  is 50.
Paid-up value of S. No.  25  is 65.
Paid-up value of S. No.  27  is 80.

NEPSE Index : 308.19  (1.00) Base : 12th.  Feb, 1994 = 100