Revenue collection up 7.5 pc in first 8 months

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KATHMANDU, March 28 : The total revenue collection, accruing out of Value Added Tax (VAT), excise duties and non-tax sources, saw good increment in the later months despite a bleak outlook in the mobilisation of revenue during the initial months of the current fiscal year.

According to revenue figures revealed by the Ministry of Finance, the government’s revenue mobilisation during the first eight months of the current fiscal year improved by 7.5 percent as compared to the collection in the like period of the last fiscal year.

As of March 15, the total revenue collected by the government stood at Rs 31.27 billion. Of the total revenue, Rs 25.68 billion was collected in the form of tax revenue, which is 5.1 per cent higher than that collected in the like period last fiscal year.

Likewise, non-tax revenue collection during the first eight months of the current fiscal year stood at Rs 5.59 billion, which is 20 per cent above the revenue collected in the similar period of the fiscal year 2001/02. Non-tax revenue amounts nearly one fourth of the annual revenue mobilisation.

Besides, customs revenue mobilisation during the eight-month period stood at Rs 8.85 billion. The collection is 3.5 per cent higher than those collected in the same period last fiscal year. Revenue through customs comprises almost 28 per cent of the total revenue.

Out of the total customs revenue mobilisation during the two-trimester period, Rs 1.61 billion was collected in the form of special duties. The total customs revenue mobilisation is 5 per cent higher than that targeted for the period.

On the VAT front, Rs 8.61 billion was collected during the first eight months of the fiscal year 2002/03. While the contribution from VAT is 27 per cent to the total revenue mobilisation, the collection during the period is 12 per cent above the revenue collected in the corresponding period of the last fiscal year.

Revenue collection under the ‘taxable sources’ as of March 15 was 16.1 per cent higher than that of the same period of the last fiscal year. During the period, a total of Rs 4.5 billion through taxable sources was raised.

The statistics further reveals that the government mobilised Rs 5.59 billion from non-tax revenue sources, during the review period. This figure is 20 per cent higher than the revenue mobilisation of the similar period last year. The revenue collection from the excise duty amounted to Rs 2.85 billion, 18 per cent higher than the collection of the similar period last fiscal year.

Meanwhile, the total revenue mobilisation of the first eight months makes 54.71 per cent of the annual targets. The government, through its annual budget presented for the current fiscal year, had estimated to mobilise Rs 57.15 as revenue during the current fiscal year.

‘Good governance, dev on track’

TKP: How would you comment on the changes and the present status of reforms in Nepal as you are aware of the developments in the political and economic fronts taken place after the last NDF meet in Nepal?

Nishimizu: There has been political insatiability and I hope that we would not see such instability in future because it has impacted the economic growth and many other sectors. Despite the uncertainty, something amazing has been happening since last year, particularly some right-minded people, who know how to bring changes to serve the people, have been able to make progress.

Just a year ago I was very much worried about the possible collapse of the banking system of Nepal, but today I am less worried as the financial condition is improving. Take the Medium Term Expenditure Framework (MTEF) for instance, as many countries are developing such framework, but Nepal has already started practising it. There are many other fabulous things that are happening in Nepal despite the political uncertainty. That means, had there been a political stability, the growth rate would have been much better.

TKP: In the last NDF meet, you had mentioned about the crisis of governance in Nepal. Do you think that Nepal is making progress to improve its governance?

Nishimizu: There are many faces of bad-governance that take the public funds away from the people to the hands of a few selected people making them richer, majority of the people remains in poverty. But, things have stared changing in Nepal. Speaking honestly, I can’t say that Nepal is out of that circle yet, but I think the implementation of concrete reforms measures has helped Nepal getting out of that vicious circle of bad-governance and the situation is much better than a year ago.

For example, the positive impacts of the Immediate Action Plan have started showing results. On last Wednesday, I went to see three health posts that were handed over to local management committees and I found impressive changes. In the past I used to hate visiting health posts as I found them extremely mismanaged. But during my present visit, I found remarkable changes as the place was clean, well organized and cabinets were full of medicines and the committee active in expanding the health services to remoter areas.

TKP: You had meetings with the Prime Minister and other ministers. Did you find any difference between the current and previous government regarding reforms and what was the focus of your discussions?

Nishimizu: I think, because of the mandate given to the government by His Majesty, which is a solid foundation for Nepal to begin a process of peace and prosperity and regain the trust of the people. I found Prime Minister and ministers committed towards reforms and are seriously working in that direction.

I don’t think that it is just a lip service. But I also learnt that many of the ministers are new and they have to go through the learning process. And, many reform measures require many ministries working together as a team and I think it will take some time. The main focus of my discussion was on accelerating reforms and keep focusing on poverty reduction and good-governance.

We also talked about the ongoing peace process between the government and Maoists and the government’s plan to achieve better and faster development including the reconstruction works. The Prime Minister formally asked to help the government to coordinate other donors that want to assist in the process of reconstruction and expediting development endeavour and I accepted his request.

I also told the leaders that donors are ready to address the root cause of the conflict, which are poverty, social, political and economic injustices that have affected many people including the women. So, Nepal has to move ahead in a constructive way to address these basic problems to ensure that such conflict would never occur again in Nepal.

TKP: So what is the future plan of the World Bank and in which sector you think reforms need to be accelerated?

Nishimizu: We will continue to do what we have been doing focusing on anti-poverty activities and promotion of good governance. We want to be true friends to the reform-minded leaders of this country. The World Bank is very much sensitive towards the need of all the marginalized people either dalits community or ethnic groups, who have been neglected.

We have been proud of our focus on women and I think we can do much better in the days to come to bring the dalits and marginalized groups into the mainstream of development. In my view, civil sector reforms is the most important sector in which the reforms need to be accelerated because it has important role in ensuring good-governance. Similarly, reforms should concentrate on making the civil service free from political interference.

TKP: How far has the government been successful in implementing various commitments made during the last NDF meet and what inspired the World Bank to upgrade Nepal from the low case to base case status?

Nishimizu: The government has been successful in fulfilling many commitments it had made. There has been a delay in some areas like banking sector reforms, but it is going forward. The implementation of MTEF is a step taken in a right direction. So, the overall performance is impressive.

The impact of reforms is something that you can’t see as the financial crisis could have visited the country without reforms. The quality of reforms and the effective result-oriented implementation of the programmes were the main reasons behind the upgradation. We are impressed by the concrete features of hundreds of reform actions that were implemented with focus on poverty reduction and good-governance.

TKP: Don’t you think the absence of elected local bodies has become a major obstacle in speeding up decentralization and improving weak service delivery in Nepal?

Nishimizu: Yes, it is very unfortunate, but thankfully, the government has different projects to provide services to the local communities. But the other thing that hampered the service delivery is the conflict itself. Yes, had there been continuation of active local bodies, things would have been much better.

TKP: The government has just implemented the Tenth Plan. Do you think it is different from the previous periodic plans and would be successful in achieving its goal of poverty reduction?

Nishimizu: Yes, if peace does materialize. Yes, if both the people and political leaders learn to focus together on good-governance in the national interest. The Tenth Plan is different in the sense that it is very strategic, focused and consistent in its objectives of poverty reduction and it has believable concrete actions along with effective monitoring mechanism.

TKP: What would you like to say about fiscal position of Nepal and low development expenditures?

Nishimizu: The low development expenditure is a matter of concern and it can harm the development of the nation if it doesn’t pick up in the remaining period of the fiscal year. Government has already initiated actions to accelerate the expenditures and I hope it will work.

But, we mustn’t concentrate only on the amount of expenditures, rather ask ourselves how much money actually reaches the people in a meaningful way. As far as fiscal position is concerned, I hope it is still within the reach due mainly to various steps that the government took in that direction, but it is not the time to relax as complications are not that far.

Rupee gains 25 paisa against dollar

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KATHMANDU, March 28 : Nepali rupee appreciated by 25 paisa vis-a-vis the US dollar Thursday due mainly to the loss of confidence at the international level on the greenback as a result of the ongoing US-led war on Iraq.

As per the buying-selling rates fixed by the central bank, the selling rate for the US dollar went down from Rs 78.34 per dollar to Rs 78.09 while the buying rate fell from Rs 77.75 to Rs 77.50 per dollar.

The increment in the value of the Nepali rupee also accompanied an increase in its value against the other major currencies, including the British pound sterling and the euro, the common currency for the European Union.

Against the selling rate of Rs 83.62 per pound sterling on Wednesday, the rate fell down to Rs 83.35. Likewise, the selling rate for the Euro also slumped from Rs 123.17 to Rs 123.07.

However, the gain in the Nepali rupee against the dollar more than matches the gain made by the domestic currency against other international currencies. That is due to an appreciation in the value of other currencies against the US dollar as well.

Experts anticipate a further rise in the value of the rupee against the dollar, primarily due to fears that the US-Iraq war will prolong and that the confidence on the dollar will further wane.

A prolonged US-led war on Iraq could prompt divestment from the dollar to other more lucrative sectors, including gold, which may bring down the value of the US dollar. Officials at Nepal Rastra Bank say that the appreciation, however, is likely to be only modest.

Appreciation of the Nepali rupee against the dollar will have a dual bearing on Nepali foreign trade. While imports will become cheaper, the competitiveness of Nepali exportable items will weaken slightly.

Entrepreneurs make effort to put older buses off road

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BHAIRAWAHA, March 28 : Western Nepal Bus Entrepreneurs Committee (WNBEC) today said that they have unleashed a campaign to put the buses older than 20 years off the road in a bid to improve environment and offer better sport service to passengers.

The committee also said that it is going to discard entire such buses within the next five years and has planned not to allow at least 66 such old buses by the end of this fiscal year.

Speaking at a press conference here today, Surya Bahadur Bhattarai, president of the committee claimed that the committee is a pioneer in putting older buses off the road. "None other representative body of transport entrepreneurs in Nepal has decided to restrict the service of older buses," added Bhattarai.

According to the committee, the owner of the old buses would be provided financial compensation for which it even has allocated a total budget of Rs 13.2 million. "We are providing compensation of Rs 2,00,000 to the owner of each bus for putting their vehicles off road," added Bhattarai.

The committee, which is the representative body of over 1,300 transport entrepreneurs of western region of the country, claimed that entrepreneurs of older buses would be discouraged with their campaign. The committee however blamed the government for adopting dual and confusing policies.

"On one hand the government says that it restricts the use of over 20-year-old vehicles, but at the same time it allows the sales and purchase of such vehicles. The government should immediately restrict the sales of such vehicles," remarked Bhattarai.

The campaign against older vehicles in this region has come at a time when most passengers complain of low quality service of local buses here. As older buses do not have comfortable seats and glassed windows, passengers have to suffer while travelling in such vehicles.

Operation of such old buses puts the passengers at disadvantage as they cannot make choice. Despite the government’s restriction, bus entrepreneurs here conduct their bus service through "dial system" as there exists syndicate system. The syndicate has the ultimate authority to allow route permit.

During the press conference, the bus entrepreneurs also blamed the government officials of taking bribe while transferring the ownership of vehicles. "They intentionally delay ownership transfer process as they eye demand bribe from us," said one entrepreneur.

Meanwhile, the entrepreneurs have strongly demanded to allow them to conduct direct bus service from Belhiya, a bordering Indian town to different parts of Nepal.

Herbs smuggling rampant in Sindhuli

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MANTHALI, March 28 : Almost 70 per cent of the total herbs collected from the jungles are smuggled from here, due mainly to the inefficiency of the government to manage and control the transportation and sale of herbs.

The district has vast resources in herbal products. An estimated 700 species of different herbs and herbal plants are found in the jungles of the district.

Herb smugglers buy these herbs from the locals at nominal prices or even collect themselves in order to sell them in Kathmandu particularly to the foreigners at very high prices.

The smuggling has greatly affected the revenue collection of the government. According to official records, the District Forestry Office collects annual revenue of Rs 1 million by exporting herbs through the legal channel. But if all the herbs are sold or exported from the district through legal channel, about Rs 70 million could be generated in revenue, according to Dinesh Poudel, a forest-expert.

"The economic condition of the district would improve if only the smuggling is controlled and herbal trading is done in a legal way," said Poudel, a Forestry Development Expert at Nepal Swiss Community Forestry Development Project. He was speaking at a talk programme on herbs organised here by the Community Forestry Consumers Federation.

Speaking on the occasion, president of the Federation Bharat Prasad Bhandari blasted the concerned authorities for not giving proper attention to conserve the precious herbs. "Both the Forest Office and the District Development Committee know that herbs are being smuggled out from the district, but they just pretend to be unaware of it."

"The smugglers are taking advantage of the indifference of government authorities," he added.

Apart from lack of government concern, the smugglers are also counting on the benefits of lack of an effective information system on forest resources. "Due to a lack of market knowledge and ignorance of legal provisions on herbal trade, the local collectors are unable to get the right price," said Ratna Bahadur Sunuwar, a resident of Rasnalu VDC.

The participants of the programme concluded on the need to establishing a herbal information centre in the district. The meeting also announced the formation of an 11-member committee to monitor the trade of herbs.

FNCCI to campaign for success of peace talks

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MANTHALI, March 28 : The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has announced to conduct a national level campaign to ensure the success of the proposed peace talks between the government and the Maoists.

Speaking at the inauguration ceremony of the fourth general meeting of the Ramechhap Chamber of Commerce and Industry, acting President of FNCCI Binod Kumar Shrestha said, "Profits should not be the sole motive of businessmen. We should, like other civil societies, should endeavour for the restoration of peace in the country."

"Without the success of peace talks and the restoration of lasting peace and harmony in the country, all business will collapse," he remarked.

"During the seven years of Maoist conflict, the business sector of the country has been affected enormously. It is time that all responsible citizens of the nation work towards improving the situation."

He also blasted the government for hiking the petroleum prices. However, on behalf of the Nepali business community, he assured the government that the price hike could be compensated for a lasting peace in the country. He also informed that the FNCCI has put forward its proposals to find ways to reduce the prices.

Meanwhile, the press release issued here by the Federation says that Acting President Shrestha, donated Rs 40,000 on behalf of the Federation and Rs 15,000 on his own to construct the building of Ramechhap Chamber of Commerce and Industry.

Productivity and quality enhancement emphasised

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KATHMANDU, March 28 : Participants in an interaction on ‘Productivity Agenda’, organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) in the capital today stressed on the need to enhancing productivity and the development of industrial sector.

According to a press release issued here today by the Federation, the experts pointed out the need of assuring quality products along with enhancing productivity for Nepal to benefit from the membership of World Trade Organisation.

Inaugurating the interaction, Dr Yuba Raj Khatiwada, Member of National Planning Commission (NPC) urged the entrepreneurs to focus on increasing the quality of products and promoting them outside the country.

"While the government has asserted its high priority to poverty alleviation in its Tenth Plan, the role of private sector is higher to support government in achieving the targets," the release quotes Khatiwada as saying.

Chandi Raj Dhakal, third vice president of the Federation, said that the FNCCI was serious on the issue and therefore had carried out several activities for quality upgradation through its Productivity and Quality Sub-committee.

John Peter Moll, Chief of the Textile Unit of the UNIDO, and Peter Wilson, an international expert, presented a paper on Areas of Competitive Improvement and said that Nepal should focus more on resolving the legal complications and amending the rules and regulations timely.

The programme was focussed on the intellectuals engaged in the policy level positions. According to the release, a total of 40 participants from the NPC, Ministry of Industry Commerce and supplies, National Productivity and Economic Development Centre and the FNCCI attended the programme.