Next budget to touch Rs 100b mark: Dr Mahat

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KATHMANDU, May 4 - Finance Minister Dr Ram Sharan Mahat today hinted that the forthcoming budget for the fiscal year 2001/02 could touch a Rs 100 billion mark.

Speaking at a Pre-budget Discussion on Agenda for Forthcoming Budget, organized by Management Association of Nepal (MAN), FM Mahat said Rs 3 billion short of salary hiked last year, debt servicing and growing regular expenditure would inflate the forthcoming budget.

In order to mitigate the formidable growth of regular expenditure, the government is going to present a new income tax bill in the parliament and if passed, it would be a cornerstone in the tax reform. The government is ready even to take unpopular decision to contain the soaring expense, he said.

The FM also expressed worry over the sustainability of the current GDP growth rate as it is an agriculture- and export-led growth. Agriculture sector contributes 40 to the gross domestic product (GDP). "Agricultural production is unpredictable and export of carpet, garment and pashmina is on the wane. Therefore, it is big challenge for us," said Dr Mahat.

He also said that there has been duplication of work in poverty alleviation program, wasting scarce resources and time. There are 19 target-oriented government run poverty alleviation programs with same modality and there are even 3-4 programs in one place. "This is too much. Efforts are on to bring all these programs under one umbrella," he said.

FM Mahat said that the labor displacement trend seen in the industrial sector has raised a serious concern and the time for industrialists, unionists and laborers for their soul-searching has come. Efforts should be made by the government and all political parties to bring in new labour-intensive industries to address the problem, he added.

Earlier, presenting a paper on forthcoming budget, Satyandra Pyara Shrestha, former governor of Nepal Rastra Bank (NRB), suggested to reduce tariff rates, control smuggling and bring down VAT threshold for effective implementation of value added tax (VAT).

He also recommended to strike a deal with People’s Bank of China and the NRB to regulate Nepal-Tibet trade and to impose protective tariffs on the import of tea and coffee.

Dr Minendra P Rijal, an economist, suggested the government to expedite the privatization of 39 state-owned enterprises (SOEs) which are consuming Rs 2 billion every year from the national exchequer.

Stating that the salary hiked in the last budget speech was a wrong step, he asked the government to introduce industrial perspective plan. Stressing on the promotion of agricultural sector, he said that accelerating the agricultural growth reduces poverty directly by raising employment and income from this sector and indirectly by stimulating demand for goods and services produced by small and medium enterprises.

Dr Yuba Raj Khatiwada, President of MAN, pointed out the need to change the policy on chemical fertilizer and cross-budget agricultural sector from higher education budget.

He emphasized on reviewing tax on information technology (IT)-related industries as it could be a catalyst in enhancing economic growth and convince donor agencies towards protecting the agricultural sector.

Madan Dahal and Roop Jyoti commented on the papers.

On the occasion, FM Mahat also gave away momento and certificate of MAN Outstanding Award to Prabhakar Shumsher Rana, Chairman of Soaltee Group Pvt Ltd.

NLIC comes into operation

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KATHMANDU, May 4 - Finance Minister Dr Ram Sharan Mahat inaugurated Nepal Life Insurance Company (NLIC), the firstever life insurance company in Nepal to comes into operation following the government’s unofficial moratorium on new entrants for 12 years.

NLIC started its operations today following the inauguration, which, among other government officials and businessmen,The inauguration program was attended by Dr Tilak Rawal, Governor of Nepal Rastra Bank (NRB) and Gopal Rai, Minister of State for Finance.

On the occasion, Finance Minister Mahat also handed over insurance papers to Ramesh Raj Bhattarai, Secretary of Beema Samiti, who got insured with NLIC effective from today.

NLIC, an absolute Nepali company promoted by NIC Bank group (under Vishal Group), had obtained approval of the Finance Ministry for operating life insurance business last September. The Ministry had also given a green signal to American Life Insurance Company (ALICO), a U.S. multinational company operating in more than 70 countries.

ALICO, however, is yet to receive an operating license from the Insurance Board, the independent body which looks in insurance related businesses.

Two other companies still vying to tap the Nepalese insurance market are Laxmi Life Insurance Company, promoted by Khetan Group, and Kantipur Life Insurance Company, promoted jointly by Tibrewal Group and a group of university professors.

Though, the other key service sectors including banking, were opened for joint venture investment since the mid eighties and further accelerated under the liberal economic dispensation of post-1990s, successive governments chose to keep the life insurance sector away from new investments.

Toyota launches new vehicle

KATHMANDU, May 4 (PR)- Toyota Motor Corporation (TMC) launched WiLL VS, a new high utility vehicle, in the Japanese markets recently.

According to a press release issued here Wednesday by United Traders Syndicate Pvt. Ltd., the sole Toyota dealer in Nepal, the launch of the vehicle follows the recent debut introduction of WiLL VI passenger car under the WiLL project.

The WiLL project, inaugurated in August 1999, offers 18 products from its seven participating companies under the WiLL brand, the release says.

Chinese interested in restaurant business

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KATHMANDU, May 4 - The Chinese, who are one of the leading foreign direct investors in Nepal in industrial and service sectors, now have shown their keen interest in making investment in the restaurant business. They are mainly interested in establishing middle sized Chinese-style restaurants with capacity to accommodate more than 100 customers in joint venture with the Nepalese entrepreneurs. The restaurants, as per the initial plan, will serve international standard delicious Chinese foods particularly for foreign tourists visiting Nepal.

A three-member Chinese business delegation, which is currently in the Capital, expressed their willingness to invest in the restaurant business during their meeting with the higher officials of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Friday, states an FNCCI press release issued here.

The release added that, welcoming the delegation, president of FNCCI Predeep Kumar Shrestha and Vice Chairman of Nepal-China Non-Government Cooperation Forum appreciated the Chinese entrepreneurs for their repeatedly expressed willingness to participate in various business opportunities in Nepal through direct foreign investment. Shrestha also assured the delegation that the Federation would extend all possible cooperation in encouraging Chinese investment in Nepal.

He further added that the inflow of Chinese tourist to Nepal, in coming days, will surely grow as Chine has recently recognized Nepal as one of its outbound destinations. "In such situation, there is high possibility of success of Chinese restaurant businesses in Nepal," the release quoted Shrestha as saying.

Speaking on the same occasion, Leader of the delegation and Deputy General Manager of Harbin Jinpeng Trade Company, Zhang Wei Li said that prime objective of the delegation is to promote bilateral trade relation, and added that since Nepal is an emerging tourism destination, Chinese entrepreneurs are very much interested in joint investment in restaurant business in Nepal.

She also said that China is not only interested in expanding export to Nepal but equally interested in increasing imports from here but underlined the need of frequent exchange of visits and exchange of information to achieve desired goal.

Shyam Sunder Kokchaypati, President of Toruism Committee of the Federation, said that several tourist sites like Kathmandu, Pokhara, Chitwan and others would be suitable for the joint venture investment in the restaurant business in Nepal.

CEBUD, SIP-P conduct training

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KATHMANDU, May 4 - A modular course for facilitators and training for trainers with emphasis on developing the entrepreneurial skills of women owning or managing small and micro-enterprises concluded here today.

The participants of the event will, in the future, deliver the services to woman entrepreneurs, who face a variety of constraints, that damper their everyday business. In addition, the program was organized to expand the range of business services being offered to the medium and small enterprises.

Center for Business Development (CEBUD) and Swisscontact/Small Industries Promotion Program (SIP-P) organized the program, which was based on the concept of ‘Business Counseling in Group’. The program was developed following a study carried out last year by SIP-P on the need for customizing business services and identifying new approaches to support woman entrepreneurs.

"Business Counseling in Group is a counseling meeting where a group of small business women entrepreneur-manager meet to get advice and facilitation from facilitators, consultants as well as from participating entrepreneurs. The methodology not only helps in diagnosing business problems but also ends with identifying possible options for improvements," organizers said.