Voluntary information disclosure

By L D MAHAT

Voluntary information disclosures are disclosures of financial or non-financial information made by companies even though such disclosures are not required by laws or regulations. Generally companies make financial and other information disclosures in their annual accounts in order to comply with regulations. However, some companies adopt a strategy of voluntary information disclosures, i.e., disclosing information which are mandatory as per the requirement of law. The reasons of such disclosures could be increased transparency of dealings with investors, building of trust amongst the investors and expectations that investors would pay a premium for the stocks of the companies whose disclosure levels are high.

Theory from information economics predicts that managers have market-driven incentives to voluntarily disclose financial and non-financial information. Empirical research investigating these incentives focuses primarily on voluntary earnings disclosures, management forecasts, and to a lesser extent, on overall disclosure levels. Voluntary financial disclosures are potentially important to market participants because theoretical and empirical research suggests that balance sheet information is useful in securities valuation.

There are various reasons as to why companies make voluntary disclosures of financial and non-financial information. The implicit and explicit factors influencing the managerial decision to make voluntary disclosures could be: the newness of the top management team; the desire to signal credibility; the size of the firm indicative of its ability to bear losses; the overall corporate strategy in realigning the business focus; the improvement in the firm’s cash flows through reduced income taxes; and the desire to be seen as a reference point for corporate best practices.

In developing countries, multinational companies play a vital role in setting up proper disclosure norms. Diverse and complex sets of factors influence accounting disclosures of such companies. Benefits of access to international capital markets and a lower cost of capital will be balanced against costs of preparing and providing information and competitive disadvantage. International capital market pressures also encourage voluntary disclosures to such companies.

In stock market based economies like such as the US and the UK, the informed pricing of corporate securities is vital for economic stability and the promotion of sustained levels of high quality investment by corporations. Until relatively recently, conventional financial indicators of performance, such as earnings and book value per share, were generally perceived as providing a useful starting point for company valuation. During the 1990’s the usefulness of these conventional measures of financial performance as a basis for fundamental valuation have increasingly been called into question.

The diminishing relevance of conventional accounting indicators has manifested itself in two, related, ways. First, we have witnessed an increased tendency for many firms to publish other forward-looking information within the annual report. Companies, it would appear, have recognised the limitations of the conventional indicators, and have produced alternative forms of information to address them. Second, a number of researchers have discovered that the ability of accounting earnings and book values, to explain company valuations, or changes in valuation over time, has materially declined.

Profit and Loss account is likely to be relatively less informative when companies report losses. Because losses cannot continue indefinitely, they are a poor predictor of future earnings. Among the companies experiencing losses, abandonment value becomes more relevant for assessing shareholder value, making balance sheet information relatively more useful. Disclosure of factors leading to loss and the factors leading to improved future earnings would be useful for the readers of the financial statements.

Profit and loss account is also likely to be less informative for companies in high technology industries. High technology firms change rapidly and tend to make large investments in intangibles such as research and development. Prior research suggests that traditional accounting models are likely to result in distorted earnings for firms with these characteristics. Because earnings are relatively less informative in high technology industries, managers are expected to have incentives to provide additional value relevant information, including balance sheet information. Therefore, additional disclosure in the annual account of such companies will help the readers to access the financial statements in a proper way.

Balance sheet information would be more useful when managers have incentives to provide investors with guidance in interpreting reported earnings. This is likely to be the case when reported earnings differ from the market’s expectations. For example, balance sheets include working capital accounts that can help investors understand the impact of accruals on reported earnings.

The demand for additional disclosure in the annual accounts of the company is also likely to be relatively stronger for equity holders as compared to debt holders. While both debt and equity holders find balance sheet information and the additional disclosure useful in estimating share value, debt holders have contractual arrangements that are expected to attenuate their demand for disclosure, such as priority claims on assets in the event of liquidation, and debt covenants that protect their investments. Empirical and theoretical research also finds that additional disclosure reduces the cost of equity capital, differentially increasing management’s’ incentives to provide information to equity holders.

The annual report allows management to elaborate on and complement financial statements and notes. Companies perceive that giving information out is not going to be a disadvantage, because transparency is a competitive advantage. Therefore, try to disclose much financial or non-financial information in their annual accounts. For example, some companies disclose their social responsibility of business by way of employee disclosures; value added disclosures; and environmental disclosures. Voluntary disclosures also allow the firm to comment on policy and future issues. Companies should adopt a philosophy of transparency and good governance and practice it in their real life.

Busybody

By LAXMI SHARMA

It is ironic that people are busier in finding out about what others are doing rather than taking an interest in one’s own life. They fritter away day in and day out thinking, talking and spying on others. I, too, have some "great neighbours" who possess these elements – inquisitiveness and so-called ‘busy time pass’. Not only me, I believe, there must be many others who have "great neighbours." But why worry about others’ neighbours, let me chew the rag about mine only.

There are two well-known personalities— Parvati’s husband and Mr Ganesh— in my neighbourhood. Parvati’s husband is popularly known as the President of the "wife- sick" husbands’ society. He almost never stays at home. Most of the time, he is at the local teashop where he spends hours gossiping. That is why he seems to know every minute detail of almost each family in our neighbourhood. According to him, Mr Shiva has handsome amount of money in his bank accounts.

Mr Ram has a meaningful relationship with his boss, because he does not fall behind in doing spying. Shyam’s children take tuition for Math and English. Mr Hari is eyeing on Ganesh’s wife and various other details which he otherwise has no business knowing. But this poor fellow has very little knowledge about his own family. He is unaware of his children’s studies, likes and dislikes, and takes very little interest in his household affairs.

On the other hand, Ganesh has a very submissive wife. Ganesh brings all the details of his office work to his wife, irrespective of whether she likes to listen to such useless stuff. She has to hold on to say her things. As a result, Ganesh remains like an alien in his own home and family. This is not just the case of Parvati and Ganesh. I am sure many of us identify ourselves with them. In both cases, life is miserable and could have been corrected by spending the same amount of time on one’s own family and life rather than on others. We devote very little time to ourselves and waste most of our valuable time being busy bodies.

Curiosity killed the cat, goes the famous saying. By being more curious about others, we must have killed the person inside us. Not only do we cease to live our own lives but we also manage to create a distance among family members. If we use the same keen interest that we show in other’s affairs in improving our own lifestyle, we would be happier. The bottom line is: Mind your own business.

Hindutva vs Muslim fundamentalism

By M R JOSSE

Recently, this columnist participated in a seminar on "Current Domes tic Policy Challenges and Prospects in South Asia" organised by the Institute of Regional Studies, Islamabad and the Pakistan chapter of the Munich-based Hanns Seidel Foundation.

The vast majority of the 20-plus papers presented during the two-day academic exercise dealt with India and Pakistan.

FASCINATING INSIGHTS

This column endeavours to provide a flavour of that verbal feast by serving delicious dollops from six papers. It begins with an absorbing one by Mani Shankar Aiyar, Congress MP, one-time member of the "Doon School-Cambridge mafia" and former South Block spokesman.

He begins with the assertion that for advocates of Hindutva, or Hindu nationalism, independent India is not about independence from colonial rule but liberation from non-Hindu rule, particularly the 200 years of British governance and the previous 700 years of rule by Muslim potentates.

He says "this ideological construct does not take into account the period of nearly a thousand years of non-Hindu rule from Emperor Ashok’s conversion to Buddhism in the 2nd century BC to the last great Buddhist monarch, Harshavardana of Kannauj in the 8th century AD, interrupted only by three centuries of the revivalist Hindu empire of the Guptas at the start of the last millennium, or the Jain and Buddhist kings and queens of southern India."

Aiyar’s erudite discourse is a passionate plea for safeguarding Indian secularism, thus: "While we are a multi-religious, multi-lingual, multi-cultural society, we are emphatically not a multi-national society. We are one nation, one people. Therefore, secularism and our nationhood are inseparable. Secularism is the bedrock of our nationhood. It is the condition of our existence. A secular India alone is an India that can survive. And perhaps an India that is not secular does not deserve to survive."

As he eloquently concludes: "India is either all of us – or some of us. The country cannot be both. There is one view of nationhood, which equates nationhood with ethnicity, specifically with religion-based identity. There is another, which identifies nationhood with plurality. Plurality can be viewed as a hotpotch. It can also be viewed as a composite. Celebrating diversity is one option. Establishing dominance is another.

"Knowing what is the nation we are building is, of course, as important as building the nation. This is what the argument over secularism and Hinduvta is about. Secularism is about contemporaneity. Hindutva is about atavism, a return to a pre-existing order, a wiping out of the present reality, a revenge on history. That is why it cannot, will not and must not be allowed to prevail. India’s destiny has to be a secular destiny."

RELIGIOUS DEMOGRAPHY

Bharat Karnad, a strategic thinker, offers interesting insights particularly bearing on the nexus between "religious demography" and national security. Among them: in the states of Uttar Pradesh, Bihar, West Bengal, Assam and the tribal belt connected to the ‘Siliguri corridor’, the presence of Muslims is sizeable enough to put the majority Hindus "under pressure."

As Karnad puts it, "a great number of these districts (in northern Bihar) abut on the ‘open’ international border with Nepal and the ineffectively policed border with Bangladesh and offer foreign Intelligence agencies a free hand to stir up trouble."

He adds: "This sub-region potentially offers the proverbial water for Mao’s guerrilla fish to swim in. The ranks of militants could swell in case the more belligerent form of Islam takes hold of the Muslim youth."

Asghar Ali Engineer, an eminent Indian Muslim scholar, in his paper on mainstream politics and minorities claims that "historically speaking, there has been nothing like Hindu religion or Hindu religious community." It was the British, he says, who applied the term in a religious sense to those who were not Muslims, Christians, Parsis, Jains, Sikhs or Buddhists.

As per Engineer, "this caste-ridden majority Hindu community is only 18% upper caste Hindus who have derived maximum benefits from what can be called ‘mainstream’ majority politics. The majority of the majority has remained quite deprived so far. It is the minority section of the majority community, which has flourished, in the last fifty years.

Noted Pakistani scholar, Dr. Mansoor Ahmed, lists 28 "conceptual determinants" in policy making in Pakistan beginning with that of the compatibility between Islamic system of governance and contemporary requirements.

At times, he admits, he is tempted "to entertain the fancy that the enemies of Islam have surreptitiously infiltrated amongst the Muslim radicals and induced them to get such laws enacted so that Islam can be blasphemed as a primitive, intolerant and unjust religion and a closed system not capable of addressing the modern problems of the world."

For a Muslim country such as Pakistan, he asserts, it is impossible for religion to play no part in governing the lives of its adherents, both at the individual and socio-political level. The problem lies, in his view, on the modality of its role. While there should not be any objection to ways individuals practice religion, there are religious groups that believe in enforcing their interpretation on others through state laws.

The subject of the rise of religious parties in Pakistan is extensively dealt with by Khaled Ahmed, a journalist. In an exhaustive paper on the subject, Ahmed concludes by listing the challenges facing religious parties. Here are some: "Pakistan has already lost out to the religious parties. It is now in the logic of the evolution of the state that the clergy should rule in Pakistan.

The current MMA domination in the NWFP will be a test particularly whether incumbency removes "the rough edges of revolution and teaches pragmatism." It is quite possible, he says, that at the next election, the religious alliance may form the federal government. That will put them to a much bigger test in the realm of foreign policy and the economy.

He asks whether they will give up "international isolation and irredentism", as it refers to the Pushtunistan issue vis-à-vis the Durand Line. Another query is whether the religious parties can handle problems arising out of Pakistan’s resource crunch and her dependence on external financial loans. Finally, he questions whether Pakistan will suffer an experiment in clerical governance without breaking up.

A paper presented by barrister Shahida Jamil, a former federal minister was particularly intriguing. Therein, she connected Indian Deputy Prime Minister L K Advani’s promotion of "brand new event of the Sindhu Darshan Abhiyan" with what she termed as "water as a weapon of war."

Advani, she said, is "busy in the work of mingling the waters of the Brahmaputra with the waters of the Leh tributary of the Indus river, attempting to lay a claim to the Indus waters."

She links Advani’s frequent advocacy of a confederation between India, Pakistan and Bangladesh, with the Sindhu Darshan Abhiyan and her claim that "the water-content in Pakistan from the North to the South has drastically diminished by 40%" because since 1960 Pakistan has had to give up "three of the largest historical rivers of the world to India, the Ravi, Beas, and the Sutlej, which for centuries had watered the Punjab and Sindh."

Clearly, both Hindutva and Islamic fundamentalism deserve closer scrutiny than has been the case here, thus far.

The mood in Europe : Perplexity and foreboding

Giles Merritt

Is Europe beginning to recover from the chaos and confusion of the Iraq crisis? Some European Union policymakers think there is a silver lining to the clouds of Iraq: They believe it is strengthening European efforts to forge streamlined new decision-making mechanisms.

Their argument is that the EU’s disarray over Iraq has driven home the need for political unity, and has thus given fresh impetus to the convention on the future of Europe, the body chaired by 77-year old former President Valéry Giscard d’Estaing of France that is trying to agree on a blueprint for reform.

In recent weeks there has been a quickening of the convention’s pace, with some signs that a deal is taking shape that will make the EU a more muscular creature than before. The EU would still be a Frankenstein monster, part supranational government and part international negotiating arena, but it could yet emerge from the convention with increased stature and sharper teeth.

Others reckon the opposite is true. They say the deep divisions over the rights and wrongs of the US-led invasion of Iraq are compounding the difficulties that confront the convention, whose 105 members are drawn from the 28 countries that are or will be EU members. Their line is that the convention’s ‘EU constitution’ will either fall far short of expectations and deliver a minimalist reform package, or that it will fail altogether.

The outcome of the convention is due by June 20, though in EU matters a postponement can never be ruled out. The convention’s 14-month talkathon has to be wrapped up pretty soon because its proposals have still to be approved and implemented by EU governments in time for next spring’s enlargement from 15 to 25 countries. The convention’s mantra is that it can’t be allowed to fail, as, without its streamlining, EU decision-making will grind to a halt.

In the meantime, a strange mood of perplexity and foreboding has settled on Europe. Perplexity, because the Iraq war’s aftermath is a tangle of new crises whose consequences are still unclear. Foreboding, because few doubt that Europe will sooner or later pay a high price for a war that was not of its making.

The atmosphere in Brussels is particularly troubled and unfamiliar. The EU’s policy vacuum on Iraq-related issues looks almost total. No one has advanced a realistic plan for repairing either the trans-Atlantic rift or the divisions between EU governments themselves. The wider concern is the prospect of an endemic Christian-Muslim conflict, for Europeans increasingly fear the ‘clash of civilizations,’ even if Americans don’t.

On the economic front, European diplomats and EU officials worry that the ill-effects of the Iraq crisis are so souring relations with the United States that the Doha Round of international free trade negotiations may be torpedoed. If September’s ministerial meeting in Cancun, Mexico, of the World Trade Organization does not kick-start the process back into life, the consequences could be disastrous for both Europe and America. Collapse of the Doha Round might trigger a surge of tit-for-tat protectionism and turn the recession into a worldwide slump.

Political business in Brussels normally adheres to a clear-cut pattern. The outcome may be unpredictable, but priorities and negotiating timetables are generally clear. Not so today. There is no strategy for tackling the trans-Atlantic rift. The general view in Brussels is that the ball is in America’s court as Europe waits to see how Washington expresses its displeasure with those EU countries that followed the French lead and opposed the invasion of Iraq.

A foretaste of the Bush administration’s pique will come in mid-June at the Paris Air Show. No American planes will be flown this year and the traditionally huge U.S. presence is being cut almost to nothing. That’s a very public signal, but more worrying is the private threat that America plans to allow Iraq to repudiate much of its $350 billion foreign debt, to anti-war countries like France, Germany and Russia.

The Doha Round was in trouble before the first shots were fired in Iraq. But statesmanship is now needed by both America and Europe if it is not to become a major casualty. If it falters, the price will not just be cutbacks in the $550 billion yearly volume of trans-Atlantic trade, nor job losses among the 5 million Americans whose livelihoods depend on European investments. The cost will more probably be akin to the Great Depression of the 1930s. That, too, was triggered by trans-Atlantic frictions and trade barriers that brought whole economies to a halt.

(The author is director of Forum Europe and secretary-general of Friends of Europe.)

International Herald Tribune

Partisan interests redefined

BEENA KHAREL

Never underestimate Nepali Congress President Girija Prasad Koirala’s tenacity. Still unrelenting, Koirala has sketched a new design to reclaim the lost power. The octogenarian leader is busy prodding CPN-UML hopefuls to maneuver the political ball the way he wants. His success will ultimately be measured by CPN-UML’s naivete and short-sightedness, the Maoist rebels’ sudden change of strategy and the King’s patience.

Scapegoat

In what can be hastily described as a rare benevolent gesture, Koirala along with four mainstream political parties is unequivocally proposing Madhav Kumar Nepal, General Secretary of CPN-UML, as Prime Minister of a new all-party government. But this benevolence does carry a heavy price tag. Nepal will ride to power, as conceived by Congressis and others, on the pledge to revive the House of Representatives. Once in power, he must work steadfastly to get the Supreme Court retract its verdict as early as possible.

The sole task of restoring the defunct parliament will rest on the General Secretary, and the burden already appears to be enormous for him and his party. But Sunday’s ‘massive peace rally’ is seen as a pathetic last-ditch effort on the part of CPN-UML to exert pressure on the powers that be, and an expression of excitement over their leader’s leap to the top of the list of would-be PMs.

The UML brains must have already done a cost-benefit analysis. But it seems Madhav Nepal’s body of advisors, assuming that he is too overwhelmed to think these days, are in a hurry to propel the party to power. Their rush is understandable, for they think that this is the best opportunity to score points, woo their wayward lower-rung cadres, bring back the truants who have left home for the Maoists and spruce up the party’s image, especially at the grassroots level.

But if Nepal accepts the premiership governed by the condition to restore parliament, it will be disastrous for himself and the party. It is not for nothing that Koirala decided to stay away from the race for the premiership. He wants the communists to be in the line of fire. Even if Nepal succeeds in fulfilling the condition (willing suspension of disbelief for a while!), the Nepali Congress Party (NC) will mercilessly sideline him.

As part of the strategy to cajole the General Secretary in particular, Koirala is flattering him by frequently reciting in public that CPN-UML is the single largest party in the dissolved House of Parliament! Lopping the breakaway faction the Nepali Congress (Democratic) off, the parties of Koirala and Nepal will have the same numerical strength—almost 71-71— claims Koirala. But it will be too naïve to hope that the two NCs will remain divorced after parliament is restored. Khum Bahadur Khadka already wants to join the mother party. In the number game, NC will get away with 113 seats, or at least the majority needed to form a government.

But are CPN-UML leaders that gullible to trust Koirala on this count? Remember how he picked up KP Bhattarai in the 1999 general elections, publicised him as his party’s choice for premiership, installed him as one, reviled him and later dropped him at his will. Remember how he treated his erstwhile protégé Sher Bahadur Deuba.

Maoist preference

The rebels are making their choice explicit. "The resignation of PM Lokendra Bahadur Chand is a tactic to derail the peace process. The Palace does not want to take the blame for the failure of peace talks. Instead, it will put the blame on parliamentarians, " Dr Baburam Bhattarai told mediapersons on Sunday. "How can the status of Madhav Kumar Nepal as PM be more than that of Royal nominee Chand?"

Apparently, the Maoists will be in a disadvantaged position if CPN-UML leader gets the biggest shot in the all-party government. They fear that their strategic position will be sunk into insignificance, as both parties profess communist ideology, though their methods and loyalty to communism vary. Teaching the people to detect differences will not be easy when both sides have to resort to ballot in the wake of elections. The direct and tough competition is on the lower-rung of the parties, and CPN-UML’s cadres have found the CPN-Maoists welcoming, and the remaining are gradually on the move.

The Maoists have realised that the journey from bullet to ballot is arduous. Rightly so, they are hoping from one district to another, walking down national and international diplomatic corridors and shaking hands with political leaders of all hues to reassure that they are not aliens, but humans made up of flesh and blood, fostering people-oriented ambitions.

What if they fail to garner enough votes, despite their People’s War for the poor and the needy? Their immediate threat is CPN-UML. So they want the King to choose the PM—anyone not belonging to NC and CPN-UML. If their preference is treated with disdain, or any delay in forming a new government can disrupt peace talks. Holding elections, whoever comes to power, will then be a nightmare.

King’s patience

At a time when all political forces are doing their level best to reconfirm their existence, it would be somewhat imprudent to expect the King or pressure him to yield to their proposals blindly. This is not an opportune time to test the King’s flexibility. At least, let’s wait for the general elections. As has been reiterated by the Maoists, he also needs some space in this new political landscape, and he seems to know it very well. But much hinges on how much he will cave in to the demands of the political parties, the Maoists and his own. The choice of the PM should please the King, the Maoists and the political parties.

The lure of the power is both tempting and lethal. Only those with steely resolve, competence and clout can survive and deliver. Whoever comes to power has to buy a lasting peace, hold elections as early as possible and hand over the sceptre of governance to the people gracefully.

Role of political parties in local governance

SANGRAMS lAMA

Since last ten months, the local government bodies – VDCs, municipalities and DDCs - are without people’s representatives. These local bodies are being run by secretaries, executive officers and local development officers of HMG/N respectively, which have not been effective in mobilising local resources. Since then the local development activities have been hampered and the social welfare is totally neglected. It is no secret that the absence of elected representatives at the grassroots level has been affecting Nepal’s developmental endeavours for a long time. This is not a good situation for the country where misuse of the scarce resources is at rampant scale and where more than 40 percent people live below the absolute poverty line. These developments have been so unfortunate for the decentralisation and local governance that they have tarnished the gains that were achieved in a decade or so.

The constitution of the Kingdom of Nepal 1990 has made powerful provisions for decentralisation as there is no other alternative to decentralised planning that enhances participation and gives more power to local bodies. It demands popularly elected local representatives that are committed and sincere for self-governance, decentralisation and local autonomy.

The promulgation of the Local Self-Governance Act (LSGA) in 1999 and other rules have improved the existing legislative framework for decentralisation and local governance. LSGA included most proposals made in the Ninth Plan to devolve wider authority for planning, service delivery and revenue generation to the local governments. LSGA envisages that all levels of local government should be elected and have the power and resources to exercise effective political authority.

Since the local elections cannot be held in near future as the Maoists are holding peace dialogue with the government to arrive at some agreement on the future politics, we should not cast any doubt on their sincerity and willingness to find a long-term peace. It is necessary to secure the acceptance of the Maoists on any decisions to be made with respect to local bodies and their governance. Without Maoists’ participation in the democratic process, no local polls will be possible within two months. At this stage, however, the Maoists may not agree to jump into electoral bandwagon as they have affirmed taking peace talks to the logical conclusion. In view of this, there is no other option left with the government than to establish some interim arrangements by issuing an ordinance to start the local government from the upcoming fiscal year to run the local bodies in the interim till the local elections are held.

Under these circumstances, the Chand government recently invited all the major political parties to discuss about setting up of all party committee at the local level but they refused to participate in the meeting. Only NSP, RPP (Rastrabadi), Hariyali Nepal Party, Nepal Samata Party and Rastriya Janamukti Party took part in the meeting and gave their suggestion as to how the local bodies should be managed. As the political parties are the key players in the democratic process, it is incumbent upon them to lend support to the process. Non- participation in the process will finally hurt the political parties themselves because they will have to remain out of the local political mainstream in case the government nominates people of its own liking or choice to man the local bodies.

Should the political parties and their leaders continue with non-cooperation, there would remain two options for immediate action. The first option will be to continue with the current arrangement that is bureaucratic. The next option will be to coop people of its own choice and form committees. Without major political parties participating in the committees the legitimacy and effectiveness of such bodies may be in doubt.

The mainstream political parties must not get bogged down on any politicking on this issue because at the village and district levels, there is a lot to do through the mechanism of a working VDC or DDC in the areas of reconstruction, development, reconciliation and resolution in the post-conflict country. The need of the hour is to forge widespread consensus among all the mature political players to avoid confrontation so that local development continues. They may keep their differences with the government at the centre but for the sake of local governance, decentralisation and democracy it is the duty of all political parties and their leaders to cooperate with the government and contribute to making local government more functional and active than they are at present. A total opposition of the government without separating good and bad might not serve the purpose of decentralisation, democracy and governance in the country. There is no doubt that the local governance and decentralisation are complex process and they have wide-ranging implications. For all this to happen, active participation, contribution and involvement of all the political parties are extremely vital.

Preserving traditional Chandinach

BASANTA RAI

The nature worshipping Kirat have been able to protect their culture in the course of time, although there’ve been some influences.

Kirat are divided into Rai, Limbu, Yakkha and Sunuwar. The settlement of the Rai Kirat along the Dudh Koshi and Arun rivers and their tributaries in the districts of Solukhumbu, Okhaldhunga, Khotang, Bhojpur and Udayapur is called Manjh or middle Kirat. Pallo or far Kirat is Limbu dominated territory.

Old records indicate that Rai Kirat formerly occupied a much larger area than that they dominate today. A legal ratification affixed with the red seal during the reign of King Rajendra Bir Bikram Shah (1816-1847 BS) reads that parts of Solukhumbu district and its pasture land, presently inhabited by Sherpa, was inhabited by Rai Kirat.

The tenth convention of Kirat held two years ago resolved that the population of Rai Kirat is 635,000. They even have many more subcastes.

Rai Kirat is listed as an indigenous ethnic group. They make up three per cent of the 22 million Nepalis. Their culture, tradition and religious performances are based on the Kirat philosophy, which binds all Rai Kirat clans and sub-clans.

Kirat observe a number of religious ceremonies throughout the year. The harvest ceremony, praying the earth, called ‘Bhumi-Puja’, is observed in September and April. They perform hom, a sacrificial rite, to acquire merit. The festival is also known as Chandinach or Sakewa Sili or Sakewa.

Sakewa is divided into two phase: Udhauli (Going down) and Ubhauli (Going up).

Rai celebrate Ubhauli in spring season for 15 days that starts on Baishakh Purnina. In the autumn season or on Mangsir Purnima, they celebrate Udhauli. But Ubhauli or Chandinach is celebrated importantly than Udhauli.

During April and May, rain starts and the earth gets virginity and fertility. Rai worship the earth in a belief that she would become happy and cropping would be envisaged.

The dance is also performed at Tundikhel, Tikhedewal, Jawalakhel, Hatiban on Buddha Jayanti and Mangsir Purnima in the Kathmandu Valley. But, the real flavour of the dance can only be seen in eastern hills. The Kirat there celebrate it with priests who perform rituals to worship their ancestors.

Everybody participate in the dance forming a circle by holding each other’s hands. With drumbeats, they begin dancing at a slow pace but moves faster later with the drumbeats. The festival provides an opportunity for Rai to know each other.

The celebration is connected to many myths. It is also said that before the marriage of god Paruhang and goddess Sumnima, Paruhang used to live in the heaven .One day, he saw beautiful Sumnima on the earth and fell in love. He made a beautiful comb, sent it to Sumnima who wished wed him.

Four children were born of them after marriage. But Paruhang left Sumnima in a hut on the bank of Dudhkoshi River and did not return for long time. One day, she saw a creeper on a stone while she was in search of food for her children. She tasted the creeper and it was full of power and happiness. She brought the creeper and made Buti, an intoxicating religious garland, and kept it safe. The Buti inspired everybody who saw it to tell the truth of her/his life.

Paruhang returned suddenly. He tried to counsel angry Sumnima. She gave the Buti to Paruhang. This immediately made him glad and he started to tell what he had done. He had spent the time looking at the heaven and the earth from the top of Chomolongma (Mt. Everest ). He also said her that he had meditated, and visited the whole universe. Paruhang promised not to leave her, which made Sumnima dance with joy. It is believed the dance is the ‘Sakela dance’.

Generally, there are male and female leaders during the dance known as ‘Silimangpa’ and ‘Silimangma’ respectively. They wear traditional dress. These two people act as the other dancers are imitating them.

Dr. Jean Robert, from Leiden University Netherlands, who has done Ph.D. on Wambule Rai language said, ‘I prefer Rai language and culture because I found their life peculiar than any others castes I have met in Nepal.’

Kul Bahadur Rai, president of Kirata Rai Yayokkha believes if Chandinach and other religious ceremonies can be publicised, it can promote our internal and external tourism, along with preserving culture and tradition.

Man Bahadur Rai, 32, from Khotang has been performing Chandinach for years in Kathmandu valley. Man Bahadur, a teacher by profession, says, ‘Kirat’s culture and tradition give entertainment and self satisfaction.’