Revenue collection from gold wanes  

By Maina Dhital

KATHMANDU, Nov 27 - Ever since the former Finance Minister Mahesh Acharya in his budget speech for the last fiscal year announced to channelise gold imports through Nepal Rastra Bank (NRB), the import of the yellow metal has dived down sharply.

And even greater is the impact of the Indian decision taken in February 2001 to slash customs tariff for gold imports into India. Indian Finance Minister Yaswant Sinha in his budget speech then for the current Indian fiscal year ending March 31st, 2002 had slashed customs duty for gold imports from IRs 400 to IRs 250 per ten grams of gold import.

Latest figures obtained by The Kathmandu Post reveal that gold imports in the first four months of the current fiscal year is 85 per cent down the imports in the corresponding period last fiscal year.

Sources at the Customs Department said that gold worth Rs 314.77 million was imported through the Tribhuban International Airport in the first four months of the current fiscal year, down from imports worth Rs 1.87 billion in the like period last year.

And it is the reduction in the duty differentials in gold imports in Nepal and India that caused the decline in the import of the precious metal in Nepal. The customs duty on the import of ten grams of the metal presently stands at Rs 250, down from Rs 316 in the last fiscal year.

And it was the government that took the initiative of tuning down the customs duty on gold imports in the latest budget to boost its local demand. However, since gold became comparatively cheaper in India, its consumption in Nepal waned. The demand for the metal earlier was high as Indian tourists visiting Nepal preferred to take advantage of the duty differentials.

The Department of Mint, which is entrusted with the responsibility of selling gold, in the first four months of the current fiscal year has sold 74 kg of gold, against the normal demand of 100-125 kg in the like period. The department presently has gold reserves of around 2500 kg.

And the current reserves is actually enough to meet the local gold demand for over the next decade. Almost 70 per cent of the local demand is catered to by gold possessed by the general public and by the gold brought in through the persosal effects regulation.

And now the direct brunt of the slump in imports is presently faced by the Inland Revenue Department (IRD) whose revenue collection from gold imports has gone down from Rs 93.8 million in the four months last fiscal year to Rs 12.5 million this period.

Despite the tremendous slump in the volume of imports in the current fiscal year, decline in gold imports into Nepal had set in as early as 1997/98. Figures show that gold imports in 1997/98 was down from Rs 31.41 billion in 1996/97 to Rs 16.54 billion. Similarly, the import of the precious metal in 1998/99 and 1999/2000 respectively stood at Rs 8.85 billion and Rs 7.69 billion.

Nepse index tumble continues

Post Report

KATHMANDU, Nov 27 – As a strong sign of deepening gloom in the Nepalese economy mainly due to the recently escalated nationwide violence, the Nepalese stock market continued to tumble for the second consecutive day today.

The Nepal Stock Exchange (Nepse) index, which is the most quick and reliable barometer to measure investors’ confidence, slipped down by over 6 points - largest single-day plunge in recent months - and touched 283.90 eroding market capitalization by Rs 866 million in a single day. Similar tumble of 5.94 points was also seen in the stock market yesterday squeezing the market capitalization by Rs 843 million.

The stock market, which was closed at 296.01 points last week, slid down to 290.07 points on Monday closing, and it further tumbled today and touched 283.98 points.

The major cause of today’s fall in the Nepse index is the declining price of the commercial banks, which holds a major share in the Nepali share market. Since the bank group commands a major chunk of the share transaction in Nepse, any fall or rise in its share price is directly reflected in the Nepse index.

In today’s transaction, with a loss of Rs 80 per share, Nepal SBI Bank became the largest loser. Similarly, Nepal Bangladesh Bank lost Rs 75 in each share to remain the second largest loser while Himalayan Bank and Everest Bank limited remained in the third position, losing Rs 50 per share each.