Nepal Rastra Bank Report
Govt expenses up, trade deficit widens

Post Report

KATHMANDU, Dec 7 - The budget operation of the government, during the first quarter of the fiscal year 2001/02, weakens as the total expenditure registered a higher growth of 26.1 per cent amounting to Rs 14.54 billion against an increase of 10.5 per cent during the same period last year.

Of the total government expenditure, regular expenses surged robustly by 29.8 per cent to touch 10.98 billion while the development expenditure registered a nominal increase of just 1.1 per cent. During the period, amount of freeze expenditure increased by 45.8 per cent to Rs 1.49 billion, according to a press communiqué released by the Nepal Rastra Bank (NRB) today.

The payments of overdue amount for pensions as well as medical care allowances to retired government employees and a substantial increase in the expenditures incurred for internal security are main reasons for the substantial growth in the regular expenditure. The late release of development expenditure due to delay in budget approval contributed for the slow growth in the development expenditure.

Similarly, revenue collection, the major resource to finance the budget, increased by 19.2 per cent to Rs 10.5 billion whereas such growth during the same period last year was 10.2 per cent. But the sharp decline in the foreign cash grants promoted the budgetary deficit to jump to Rs 3.66 billion. The government, during the period, took overdraft worth Rs 2.25 billion from the central bank to finance the resources gap.

The national Urban Consumer Price Index, on point to point basis, increased by 2.2 per cent during the period in contrast to an increment of 2.9 per cent during the corresponding period last year.

According to the release, of the over-all price index, price of food and beverages rose by 3.8 per cent compared to a decline of 4.6 per cent during the previous year. Despite price rise in some of the food items, the continuing decline in the prices of grains and cereal products contributed to realize lower price rise of the group.

However, the price of non-food and services group went up by 0.4 per cent during the first three months as against the high growth of 12.7 per cent in the same period of the last fiscal year, states the release. The sharp downfall in the housing prices is the main reason behind the nominal price rise in the non-food group.

During the review period, total exports registered a decline of 0.3 per cent to Rs 13.48 billion compared to a growth of 27.6 per cent during the corresponding period of the previous fiscal year.

The growth of exports to India decelerated to 34.7 per cent from 47.7 per cent in the same period previous year while the exports to third countries also plunged by 28.4 per cent against a growth of 15 per cent during the same period last fiscal year.

The export of jewelry and tanned skin to the third countries increased during the period, however, a heavy slump in the exports of woolen carpet, garment and pashmina dragged down the whole export figure.

During the first three months of the current fiscal year, imports registered a decelerated growth of 3.8 per cent to Rs 26.5 billion as against a growth of 5.2 per cent during the same period last fiscal year.

The import of cement, electrical equipment, medicine, petroleum products, tobacco and pesticides from India and petroleum products, chemical fertilizer, agricultural tools, medical equipment, electrical equipment, crude oil, medicine, polythene granules, copper wire and sheet paper as well as silver from the third countries went up in comparison to that of the previous year.

As a result of increase in imports and decline in exports, trade deficit widened by 8.4 per cent to Rs 13.03 billion whereas such figure had declined by 12.2 per cent during the same period last year. The export/import ratio, which was 52.9 per cent in the previous fiscal year, came down to 50.9 per cent in the review period, states the release.

Based on the available balance of payments, statistics for the first month of the fiscal year, the balance of payments remained favorable by Rs 1.16 billion. During the period, in spite of decline in net service income, current account deficit narrowed down by 27.3 per cent to Rs 893.2 million due mainly to an increase in transfer receipts compared to the corresponding period of the previous year. Besides, a significant inflow of miscellaneous capital items helped the balance of payments to remain positive.

The foreign exchange holdings of the banking system increased by 4.7 per cent to Rs 104.87 billion in mid-October 2001. Of the total reserve, 76 per cent was accounted for by convertible currencies and the rest by non-convertible currency.

Market capitalization of the companies listed in the stock exchange increased to Rs 39.33 billion in mid-October 2001 from Rs 37.05 billion in the previous month. Similarly, Nepal Stock Exchange (NEPSE) shares price index increased from 265.2 in the previous month to 281.2 in mid-October 2001.

Services to be delivered within two hours
DoC vows prompt service

Post Report

KATHMANDU, Dec 7 – Though lately, it seems that the government bodies have begun realising that the civil servants are paid with the tax payers’ money and providing prompt services to taxpayers is their duty.

The Department of Commerce (DoC) is probably the first government body that has realised the duty of civil servants and has vowed to provide prompt services to the concerned people.

The department has said that in order to ensure the effectiveness, quality and guarantee of services it extends to people it has introduced a new special work plan, according to a press release issued by the department here today.

The department has stated that it would provide almost 75 per cent of its services within two hours and rest of the services within the next day.

Among the services, which the department vows to carry out within two hours include approval of change in customs points, issuing licences to fair price shops, issuing import licence for importing goods from India on quota and non-quota basis, issuance of export licence for ready-made garment to European Union nations and issuing certificate of origin to such goods.

Similarly, the department has also promised to provide transit facility on goods used for mountaineering, granting approval to released clothes and other goods from customs imported without price tags and to send information on letter of credit (LC) received from the central bank to Kolkata within two hours.

The services the department has stated to provide within the second day of proceeding include giving approval to clear goods from customs offices imported without opening LCs, registering, renewing and making amendments to private and partnership firms or agencies and all the concerned documents the department is supposed to forward to other bodies.

The release further states that the names and designations of concerned officials, their duties, advice to service seekers and required amount of fees is pasted at the main entrance of the department, with a view to facilitate the people.

The department has also mentioned that it would give written explanation to concerned people within specified time if the department cannot provide any service.

Diesel, petrol use shows sharp decline

Post Report

BIRGUNJ, Dec 7 – The ongoing slowdown in economic activities has resulted in a decline in consumption of petrol and diesel in this region. The statistics for the consumption of these products in the 10 districts of Central Region during the first quarter shows a whopping decline of 30 and 19 per cent respectively.

Consumers say, the main reason behind such decline is the difference in the price of diesel compared to kerosene, the latter being cheaper. They say the price difference insists them to use kerosene rather than the other petro-products to the extent it is possible.

It is said that more than 80 per cent of diesel that is consumed in Nepal is used for fueling the vehicles. And 60 per cent of the vehicles use adulterated diesel that contains higher share of kerosene. Bagga Singh, one of the petro-dealers at Birgunj points out the same reason for a decline in the sale of diesel and petrol.

Rajendra Gupta, the owner of the Pashupati Carriers, shares the same feeling as that of Singh and adds, "The economic slowdown in the country has led in a decline of transportation cost by over 25 per cent."

During the first four months of current fiscal year, total supply of diesel in the 10 districts of this region was 1.89 million litres while its supply was 2.04 million litres during corresponding period last fiscal year. Similarly, the supply of petrol during the four months of this year was 1.41 million litres as compared to 23 million litres of the last year.

Despite a decline in the consumption of diesel and petrol, the supply of kerosene has gone up by 2.7 million litres as compared to the last year. The supply of kerosene during this four months was 25.8 million litres while it was 23.1 million litres in the corresponding period last year.

"We can save up to Rs 90,000 annually if kerosene is used instead of diesel," says one of the drivers. The use of kerosene damages the pump of the vehicle but it just costs Rs 10,000 and it works for a year, adds he.

CCIA team meets minister Khadka

KATHMANDU (PR) – A delegation of Central Carpet Industries Association (CCIA) led by its President A G Sherpa met with Purna Bahadur Khadka, Minister of Industry, Commerce and Supplies on Friday.

According to a press release, various problems being faced by carpet industries were discussed on the occasion. The delegation also suggested some solutions for addresing the present problems. Maintaining peace and order, amendment to the Labour Act and introducing some export promoting events were some of the suggestions.

Minister Khadka assured the delegation that the government was serious about solving the problems seen in the carpet industries. "But, we have to wait till the state of emergency ends," added the minister.

Dollar 350m loan to India

MANILA (AFP) - The Asian Development Bank (ADB) said Friday that it has approved two loans totaling 350 million dollars to restructure the power sector in the Indian state of Madhya Pradesh.

A 150 million dollar policy loan and a 200 million dollar investment loan would support the first phase of reforms, the ADB said in a statement from its Manila headquarters. The loans would restructure the Madhya Pradesh State Electricity Board and improve the policy environment in the power sector, it added.

The policy loan is payable over 15 years with a three-year grace period, while the investment loan will be repayable in 20 years with a five-year grace period.