Upcoming budget will be practical: FM

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KATHMANDU, April 29:Finance Minister Dr Ram Sharan Mahat today said that the upcoming budget would be practical and realistic. He stressed that neither the regular budget will be unnecessarily suppressed nor the development budget inflated.

His indication was not to follow the traditional budgeting system in which the development expenditure is usually made higher than the regular expenditure and the revenue projections put over the regular budget.

"Security is now the prime concern. It is rational that the security budget will increase. Unwanted projects will be scrapped," said Dr Mahat, while speaking at a pre-budget discussion on ‘Agenda for the forthcoming budget 2002/03,’ organised by Management Association of Nepal (MAN) today.

He assured that despite the current security problems, the economic fundamentals are not so alarming. "Disruption in economic activities and escalated attacks on infrastructure has dampened development process, forcing the government to take stern measures. Nevertheless, the government so far has managed to maintain fiscal discipline," he said.

Highlighting the features of the upcoming budget, he said that the budget for the fiscal year 2002/03 would put special emphasis to achieve greater decentralization. "Institutional weaknesses and lack of proper system is the prime cause of the failure of the government’s decentralization endeavours," said Minister Mahat.

However, the minister said that for a budget to be effective and meaningful, all must back the budgetary policies.

Reacting to earlier scepticism shown by speakers over the efficacy of the proposed Medium Term Expenditure Framework (MTEF), Dr Mahat said that the three-year rolling budget has taken up a log frame method, and that the release of budgets for projects would be based on performance.

Dr Yubaraj Khatiwada, President of MAN, said that this is the first time after many years that the country is facing crunch of internal resources. He also showed his concern over the reverse order crisis, which unlike in other parts of the world, has started with social problems.

Dr Khatiwada also said that the upcoming budget should adopt flexible economic policies to boost domestic demand. Furthermore, the budget should also be gender and poverty sensitive, he said.

Presenting a paper entitled ‘Budget 2002/2003: Issues and Challenges’, Dr Meena Acharya said that fiscal governance, resource mobilisation, expenditure restructuring, sectoral programmes reorientation, and financial system regulation, among others, are the main challenges.

"Most of the problems the country is facing are due to mis-governance. Good fiscal governance is a must for facing the current problems," she said.

Various other speakers including Dr Badri Prasad Shrestha, Dr Puskar Bajracharya, and Dr Dilli Raj Khanal, also spoke on the occasion.

NIB to become Investment Bank

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KATHMANDU, April 29:Along with the commercial banking activities Nepal Indosuez Bank (NIB) would also be venturing into investment banking from mid-June after it is renamed as Nepal Investment Bank, said Prithvi Bahadur Pandey, the new director of the bank.

Speaking at a press conference organised by the bank today, Pandey said, "Although the bank is basically into retail commercial banking, it would eventually go into investment banking issuing long-term loans after the enactment of umbrella Act governing the financial institutions."

He also stated that the bank has scheduled to call general shareholders’ meeting on May 30 during which the bank’s new name- Nepal Investment Bank- would be formally proposed for shareholders’ approval, and the new name would be registered in the Company Registrar’s Office.

Pandey added that he along with Ajay Ghimire, Jitendra Rajbhandari and Marc Dumetz, has been appointed as new directors of the bank. Dometz, representative of the Credit Agricole would remain with the bank till the management of the bank is completely taken over by the new team.

Banking group led by Pandey took over 50 percent shares of the bank previously owned by the Credit Agricole on Wednesday.

Pandey also said that the new management would retain the existing organisational structure of the bank and would run it professionally, free from the influence of industrialists to give maximum value to its shareholders.

Similarly, Dometz said that the share of the Credit Agricole was sold at Rs 290 million at the rate of Rs 341 per shares. "The reason behind selling the shares of the bank at price lower than its market value was due to Credit Agricole’s strategy whereby it sought for efficient buyers rather than profit," he stated.

He further said that the controversy surrounding the sale of its shares sale was due to misunderstanding and the sole reason behind the divestment of the bank was its own policy. "The policies put in place in Nepal has nothing to do with Credit Agricole’s divestment, rather it was its strategic decision," he stated.

‘Food security should be part of dev’

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KATHMANDU, April 29:At a time when the figure of malnutrition is mounting alarmingly, the issue of food security should be incorporated as a basic element of the development strategy, said Mahesh Acharya, Minister of Agriculture and Cooperatives (MoAC).

"The issue of food security should be addressed at the national level to curtail the rate of malnutrition and under-nourishment, which was the commitment the country made during the World Food Summit (WFS) held in Rome, 1996," he said.

Minister Acharya said this while speaking at a national consultation workshop on "World Food Summit: Five Years Later" organised by the NGO Federation.

Stating that poverty and undernourishment are intricately related with each other, Acharya said that the government has aimed to achieve pro-poor, broad-based economic growth having its direct impact on the rural populace, which basically are under the poverty line and mostly the victims of under-nourishment.

"However, rural people’s access to productive assets like capital, land and technology should be ensured for attaining sustainable growth as the government envisaged," he added.

The current problem of the country, he said, is beyond the policy framework and the national psyche, infrastructure, institutional framework and capacity have evolved out as the major constraints impeding the effective implementation of policies.

Voicing his opinion on integrated national strategy for identifying areas of competitive advantage, ensuring market-orientation of domestic produce, building up of infrastructure and institutional framework, he said that the country needs to enhance productivity and efficiency for poverty reduction.

"This also holds good if the country is to take advantage of the world market that will open up in the wake of World Trade Organisation (WTO) regime," he stressed.

He even stated that country would be lobbying for pooling resources for a fight against poverty during the forthcoming Asia Pacific Ministerial Conference on food, which would be held in May in the capital.

Dr Arjun Karki, Advisor of the NGO Federation, urged the government to announce a short-term interim programme to fight off the problems raised by the current mess the country is witnessing.

"The government should announce relief packages for all sectors including the agriculture and food, which is feared to worsen due to the impact of the current problems," he added.

He stressed for introducing land reform measures to ensure food security and also urged the government to address problems of underemployment and unemployment for attaining food security.

Gauri Pradhan, President of the NGO Federation, asked the government to clarify the status of the poor in its poverty reduction programmes. "This is important for attaining poverty reduction in real sense, as the current practices have turned poverty reduction into a charity programme," he viewed.

The national consultative workshop was organised with a view to thrash out national perspectives on strategies and programmes on food security, which would be lobbied during the Asia Pacific Ministerial Food Conference.

The programme also viewed to evaluate the government’s efforts put in to attain food security following its commitment made in the WFS, Rome.

The WFS, attended by 186 countries, had expressed commitment to cut down the undernourished population by half within 2015. It had also established that over 800 million people are hunger-stricken and two-thirds of the population lives in Asia alone.

Going by the target set by the summit, above 20 million people were required to be pulled above the under-nourishment line annually. However, the rate of the same has not been able to exceed 6 million per year, according to a report of the Food and Agriculture Organisation (FAO).

"This issue would be raised during the Asia Pacific Ministerial Meet as well. The meeting is being organised to sort out the weaknesses seen on the programmes and its implementation announced for attaining food security and would voice out for better inputs," said Shanta Lal Mulmi, General Secretary of NGO Federation.

GeFONT, NTUC to work jointly

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KATHMANDU, April 29:Two prominent trade unions Monday vowed that they would work together in future for the rights and interests of above 3 millions labourers of the kingdom.

Speaking at a joint press conference organized by General Federation of Nepalese Trade Unions (GeFONT) and Nepal Trade Union Congress (NTUC), the chairmen of the two unions Mukunda Neupane and Laxman Basnet respectively said that seven point agenda has been adopted for which they would be working together for one year.

Laxman Basnet said they would be working together though they are affiliated to different political ideologies. Recalling the experience when they had worked jointly for demanding 10 service charge for hotel employees, Mukunda Neupane said, "There is need of only one trade union."

A press release signed jointly by the two chairmen states The agenda include full implementation of Labour Act, election and operation of authorized trade union, determination of due process for membership and working unity of the affiliated trade unions among others.

The trade union leaders also informed that they are working for senate of labourers and reservation for them. They held that something substantial would be developed in the next five or six months.

NRB could adopt more flexible monetary policy

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KATHMANDU, April 29:Dr Tilak Rawal, governor of Nepal Rastra Bank (NRB), has hinted that the central bank could take more flexible monetary policy, as the present inflationary pressure is low.

"Since the overall inflation rate for the current fiscal year would be less than 4 per cent, the central bank can take more flexible monetary policy," Rawal said. The inflation rate during the first eight month of the current fiscal year is 3.6 per cent, the economy will have to bear no problem even if it goes up to 5 per cent.

In his inaugural speech at a two-day seminar on Present Situation and Challenges of Economic Journalism organized by Bankers Training Centre of NRB, Governor Rawal said that despite some difficulties, the economy of the country has not yet plunged into crisis.

Stating security as the foremost condition for the economic growth, he said the security condition should be improved to accelerate the economic activities. "The non-economic factors are the prime causes of the present economic hardship," Rawal stressed. He also urged the politicians to speak cautiously about the economic matters.

He said that both the exports and imports of the country have plunged by 8 percent and 8.5 per cent respectively. However, he further said that foreign currency reserve is in good condition and the revenue growth rate is 4 per cent, any economic crisis in the country in near future is unlikely. "But the position of Balance of Payment has slightly deteriorated," he said. He also warned that the country might plunge into economic crisis if the present condition doesn’t improve soon.

Rawal also said that despite the soaring regular expenditure and declining development expenditures, the overdraft taken from the central bank has been just Rs 330 million against Rs 670 million recorded during same period last year. He stressed that upcoming budget should be realistic.

Referring to the present banking situation, he said that present trend of presenting huge profits through manipulation of rules and regulation will bring a financial crisis and urged the financial institutions to obey the present banking regulation strictly.

Santosh Gharti, Director of the Banking Training Centre highlighting the objectives of the seminar said that the programme would be helpful in enhancing knowledge and skills of the economic journalists. Five papers are scheduled to be presented. On the first day, Gajendra Bista, president of Society of Economic Journalist Nepal presented a paper on Development and Problems of Economic Journalism in Nepal while Dr Govinda Bahadur Thapa, Director at the Foreign Exchange Department of NRB presented another paper on Economic Policy of the Country.

Govt to hand-over basic services to VDCs in 20 dists

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KATHMANDU, April 29:Vice-Chairman of the National Planning Commission (NPC) Prithvi Raj Ligal said the government is selecting twenty districts to hand over the operation of basic service sectors like primary schools, health posts, postal services and agriculture projects to the VDCs in the coming fiscal year.

"Due to the budgetary constraints, the Commission has been making plans to hand over the management of such sectors to the VDCs of twenty districts as an experiment,"Ligal told the parliamentary States Affairs Committee (SAC) today.

He also said that the government was thinking of bringing all the Village Development Committees under the parameter of Office of the Auditor General considering the wider sector of spending and income of the VDCs.

Member of the Commission Harishankar Tripathi told the meeting that the projects would be selected and funded on the basis of priority. "Horticulture, livestock, agro- enterprises, herbal farming and bio- tech will be given topmost priority in the coming Five Year Plan as the tools for poverty alleviation," Tripathi said.

Another member of the Commission Jagadish Chandra Pokharel claimed that the nation has gained expected success in roads and bridge construction, but 16 district headquarters are yet to be linked by road network.

"Thirteen district headquarters will be linked by roads," said Pokharel, adding that the isolated parts of the country like Karnali and Chandani and roadways will directly link Dodhara.

Shankar Prasad Sharma, another NPC member said that the industrial growth, external trade and tourism sectors were facing troubles in recent years. "Tourism sector, which had gained remarkable success in the last decade, has declined to by 45 percent compared to a decline of 21 per cent last year," Sharma said.

There is a trend to revive the economy with reserve resources but there is far less possibility of reviving the national economy as the government has already taken overdraft and loans.

He also informed the meeting that the government has been providing subsidies to the sick industries through government owned banks but the definition of such industries is still vague.

"Only those affected by present situation of the country have been supported by the government for their revival," he added.

"The government has been supported by the foreign donors in the revival of economy but the donors are insisting for curtailing the unproductive expenses," he said.

Nirmal Prasad Pandey, an NPC member, told the meeting that the quantitative development in the education sector has no ground to be satisfied as more than 30 percent of the school-going age children are deprived of education.

He also said that the child-health has improved significantly in the past ten years, but the maternity health condition was in vulnerable condition.

"The government is changing women development policies as the fundamental rights instead of previous welfarist model," he said.

Rameshananda Vaidya said the government is planning to provide drinking water for 85 percent people in the country. "We have failed to attain the desired goal in last two Five-Year Plans, both of them had aimed at providing the facility to the whole population", he said.

He also informed that at least 2600 VDCs would be linked to national grid while 10 percent of the rural population will be provided electricity facility.

The SAC has asked the NPC to be clear on whether it is an advisory body or an implementing one. It also asked the commission to thrash out a concept on the role to be played by the local bodies, members of the parliament and the NPC in preparing budget for the development projects.

‘Nepal received warm response in PATA Mart’

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KATHMANDU, April 29:Pacific Asia Travel Association (PATA) Nepal Chapter and Nepal Tourism Board (NTB) have stated that Nepal’s recent participation in 25th PATA Mart organised in Singapore and 51st PATA annual conference held in New Delhi was successful in promoting Nepal as an adventurous tourism destination.

Speaking at a press conference jointly organised by the NTB and PATA Nepal Chapter in the capital today, Tek Bahadur Dangi, Director at the NTB, said that the NTB is receiving positive response from the travel and trade entrepreneurs from around the world after Nepal’s participation in those international events.

Nepal was a feature country in the Mart that was organised from April 9 to 12 in which Minister for Culture, Tourism and Civil Aviation Bal Bahadur KC was the chief guest of the inaugural ceremony. The Nepali team participating in the meet comprised of 16 PATA Nepal member companies, NTB and Royal Nepal Airlines Corporation (RNAC).

Dangi also informed that Nepal was declared as the Most Determined Seller at South Asia Travel Tourist Exchange (SATTE) 2002 for being pro-active in generating markets and undertaking a vigorous market efforts in highlighting the tourism attractions of the kingdom.

During the 51st PATA annual conference organised in New Delhi from April 14 to 18 three Nepali individuals received the PATA Award. According to a press release issued by the PATA Nepal Chapter today, RR Pandey, Executive Chairman of Everest Express was awarded with the Chairman’s Award. Likewise, Basanta Raj Mishra, Executive Chairman of the Temple Tiger Group was one of the recipients of the Awards of Merit and Stan Armington of Malla Treks received the PATA Gold Award in the Travel Writer Category.

Ashok Pokhrel, President of PATA Nepal Chapter said that Nepal has been able to bring 44 international trade buyers in Nepal immediately after the completion of the conference. "As most of them had not recognised Nepal as an adventurous destination, their visit to Nepal would enhance the promotion of the NTB," he added.

According to press release distributed on the occasion, the NTB is preparing to launch special packages to woo the Indian tourists. The NTB in coordination with the RNAC, has launched Fly-n-Wine Scratch Scheme for the Indian tourists coming to Nepal through Royal Nepal Airlines. As per the scheme, the passengers would receive exciting prizes including car, big screen TVs and a two-night-three-day all expense paid stay in Nepal among others.

Similarly, the events and festivals that would be organised during Destination Nepal Campaign would be promoted aggressively in the Indian cities, states the release.