PULPATHI BEING WELCOMED INTO HOMES

Kathmandu, 13 Oct.: Pulphati is being welcomed into Dhasain ghars at homes on the 7th day of Dasain Thursday.
Phulpati is being brought to Jamal in the capital from Gorkha and will be taken to Hanumak Dhoka.
Devotees thronged temples Thursday morning to offer worship at Bhagawati temples.
Government offices closed for six-day vacation from Thursday as well.
The movement of vehicles in the capital has thinned considerably as the capital’s residents from districts have returned home for the festive season.
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PRACHANDA HEADS TASK FORCE FOR CONSTITUTION DRAFTING


Kathmandu, 13 Oct.: Maoist Chairman Prachanda has been appointed the coordinator of a seven-member task force to narrow down or eliminate differences on 225 points to be included in a constitution to institutionalize a declared republic.
A meeting was held Wednesday at the office of constituent assembly (CA) Chairman Subash Nemwang.
Twenty-seven parties in the CA couldn’t agree on articles to be sent to the main constitution drafting committee headed by Nilambar Acharya to suggest a draft of a proposed constitution to the CA.
An effort is being made by parties to give constitution drafting a new momentum.
Basic differences on a state structure, federalism and other subjects surfaced in eight of 11 subject committees.
No work has been registered in constitution drafting in nearly five months after the two-year elected mandate of the CA was extended 28 May 2010 by another more than four months leading to fears and speculation a basic law won’t be extended again.
Nepal is governed by an interim constitution declared by a a self-appointed and unelected legislature.
The task force meets again Thursday.
Ram Chandra Paudel, NC parliamentary party leader, UML Chairman Jhalanath Khanal, MJFN Chairman Upendra Yadav, Narayanman Bijukakchaya of Nepal Majdoor Kishan Party, Law Minister Prem Bahadur Singh and CA member Rukmini Chandhary are other members of the task force.
Maoist Deb Gurung, Dr Ram Sharan Mahat and Ramesh Lekhak of NC, of NC, Bharat Mohan Adhikari from UML, Rameshwor Lal Kayashta MJFB, Sunil Prajapati of Nepal Majdoor Kishan Party, Minister Singh and CA member Chandhary will assist the task force complete its responsibility.
Gurung said Prachanda was appointed coordinator of the task force as the chief of the largest party in the CA.
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KHAGENDRA TAHPA MAGAR WORLD’S SHORTEST MAN

Kathmandu, 14 Oct: Khagendra Thapa Magar, on his 18th birthday Thutsday, was recognized as the world’s shortest man bythe Guinness Book of World Records.
He was awarded a certificate by the publication in Pokhara following extensive medical tests Wednesday.
Khagendra is just 22 inches tall.
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TWO KILLED, NINE INJURED

Kathmandu, 14 Oct.: Two persons were and nine were injured overnight in a vehicular accident in the district neighbouring the capital.
The mini-truck heading north from Dhading was involved in an accident..
Seventeen passengers were injured, two seriously, Thursday in another vehicular accident in Rupandaehi.


BODY OF MISSING JAPANESE CLIMBER FOUND

Kathmandu, 13 Oct.: The body of Japanese climber Daisuke Honda, 32, missing on the 8167 meters high Dhaulagiri since 20 September, was found Tuesday by a search and rescue team.
But Osamu Tanabe,49, Toshio Yamamoto, 36 and Sherpa guide Pasang Gelu are still missing after a landslide hit at 5,000 meters.
Three professional Japanese guides are in the team.
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GURKHAS LOSE PENSION FIGHT

Kathmandu, 13 Oct.: Nepalese Gurkha veterans on Wednesday lost the latest round of their legal battle in London with the Ministry of Defence over their British army pensions, AFP reports from London.
A test case, which would affect some 25,000 veterans,
seeking equal pension payment with soldiers who retired after a July 1, 1997 cut-off date, when the Gurkha headquarters was moved from Hong Kong to Britain. They are paid a third of the pension that Gurkha veterans who retired after the 1997 date receive.
Those who retired after 1997 receive the same amount as their British colleagues, while serving Gurkhas earned pension equality in 2007. The case was dismissed at the High Court earlier this year, but the British Gurkha Welfare Society then took it to the Court of Appeal.
However, the appeal was rejected Wednesday. The Gurkhas, recruited
from Nepal, have been part of the British army for nearly 200 years.
A Ministry of Defece spokesman told AFP ht over the course of retirement, Gurkha veterans on the pre-1997 scheme would receive at least the same amount of pension as their British counterparts.
‘Gurkha pensions were usually paid from the age of 33, up to 24 years before the British pensions begin. That means a Gurkha received approximately 60,000 pounds ( 95,000 dollars, 68,000euros) by the time he is 60,” he said.
Retired Major Tikendra Dal Dewan, chairman of the British Gurkha Welfare Society, expressed his disappointment after the appeal was rejected and said he would consider taking the case to the European courts.
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BHUTANESE REFUGEE KILLS WIFE

Kathmandu, 13 Oct.: A Bhutanese refugee here hacked his spouse to death following household dispute, RSS reports from Damak.
According to Area Police Office, Beldangi, Prem Bahadur Magar of the Beldangi Refugees’ Camp killed his wife Ranamaya by attacking with a sharp weapon after the dispute took an ugly turn.
Police have arrested Magar.
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LIMBUWAN PLENUM

Kathmandu, 13 Oct.: The fourth extended plenum of Sanghiya Limbuwan Rajya Parishad concluded Wednesday here, RSS reports from Itahari.
A month ago, the faction had split from its mother party Sahghiya Limbuwan Rajya Parishad following the resignation of many central representatives. Limbuwan Chairman Sajuhang Paluwang reconstituted the group with the help of some central leaders.
The Paluwang-led group claims that 10 eastern districts and Kathmandu Valley are ”Limbuwan autonomous regions on the basis of historic evidence” .
In the plenum, party General Secretary Padam Adhikari, presented two separate documents on the present situation of autonomous Limbuwan, autonomy of Iimbuwan and the basis for restructuring Federal Democratic Nepal, among others.
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TRADE, COMMERCE, ECONOMY
New, clean and reduced Dashain

Kathmandum 14 Oct.: Nepal Rastra Bank (NRB) witnessed an additional money circulation of Rs 22 billion over the last four weeks amid Nepal’s biggest festival Dashain. The bulk of the amount is considered to be withdrawn for the festival purpose.

Money in circulation went up to Rs 173 billion until Wednesday which was Rs 151 billion on Sept. 17. The central bank witnessed a circulation of Rs 14 billion during the same period last year. The money circulation means cash going outside from the central bank to other banks and cashes remained in the market. The amount that went in circulation is new and mostly clean notes are expected to circulate during Dashain festival, according to a senior NRB official. Around 80 percent of the additional money circulated over the three weeks is clean and the rest even though it be old is clean, the NRB official said.

The NRB had expected to distribute around Rs 25 billion new and clean notes both for Dashain and other purposes before Dashain.

“The rise in money circulation shows a huge demand for new notes during Dashain,” said a senior NRB official. The NRB official said that last year’s shortage of cash may have prompted the people to draw more cash this year.

Even government employees, pensioners and employees of private companies were deprived of withdrawing their deposits from banks and financial institutions due to scarcity of notes last year. “The reason behind the surge in demand this year might be the cash exchange offer of higher amount this year,” said the central bank official.

The central bank has not received the total new notes that went for exchange with old ones. But, the NRB said that its currency management department at Thapathali was witnessing an exchange of Rs 120-130 million a day until Wednesday.

The NRB has been exchanging up to Rs 22,000 for an individual. It is giving new cash on the basis of single packets of Rs 100, Rs 50 and Rs 20 notes and four packets each of Rs 10 and Rs 5 notes this year. There was provision of Rs 7,000 for each individual last year.

According to NRB, it has already delivered new notes at its seven branches and 67 note funds remain in Rastriya Banijya Bank and Nepal Bank Limited.

While distributing new notes, NRB adopted the token based system at its currency department to ease access of people to new notes. NRB had then boasted of reserve cash worth Rs 90 billion. It was also receiving notes worth Rs 57.95 billion.

With massive withdrawal of deposits, commercial banks witnessed a decline of deposits by Rs 4 billion over the last week. Massive remittance flow before Dashain also could not prop up the banking system. Deposits in commercial banks fell to Rs 613 billion from Rs 617 billion within a week. NRB officials have termed the massive withdrawal during Dashain as ‘rising consumerism’ in the country.

Economic Survey for the fiscal year 2009-10 has termed rising consumerism as one of the challenges for the economy. “The consumption is increasing even amid low economic growth rate, thereby causing contraction in domestic savings,” the report says. “Therefore, another challenge for the economy is to encourage an environment for savings.”

According to the survey, the country’s gross national savings decreased to 34.4 percent in FY 2009-10 from 36.1 percent in FY 2008-09. Over the last decade, consumption went up to 90.6 percent in FY 2009-10 from 88.3 percent in FY 2001-02, leaving little room for savings.
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TWO MALAYSIAN AIRLINES TO FLY TO NEPAL

Kathmandu, 14 Oct.: Two Malaysian carriers—Malaysian Airlines and Air Asia—are preparing to start scheduled flights to Kathmandu from December or early January, Republica reports.
Malaysia Airlines is the national carrier of Malaysia while Air Asia is a low cost carrier.
Prashiddha Bahadur Pandey, president of Hotel Association of Nepal (HAN), expressed the hope that tourism arrivals to the country will increase once the two airlines start flights.
“More than 7,000 Malaysia tourists visit Nepal every year. The umber will double after the two airlines start scheduled slights,” Pandey, who returned Kahmandu after a week-long promotion visit of HAN said.
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Danger facing Nepalese economy Taking stock of situation


Kathmandu, 14 Oct.: Revenue mobilization in an economy like Nepal is very challenging because majority of the people live in extreme poverty and the people engaged in economic activities have enormously inadequate taxable capacity. To augment revenue or to counter fiscal deficit, the government should strengthen tax administration, Senior Economist Dr Ashok Shumshere J.R. R writes in The Himalayan Tmes.


Developing economies are confronting increasingly severe problems of resource gap. In a broad framework, resource gap may be defined as the difference between Government expenditure and revenue (the revenue is being financed through foreign loans, domestic borrowings and cash reserve). In other words, it is termed as fiscal deficit. A mounting trend of fiscal deficit has been visualized in Nepal. This growing deficit has often been counterbalanced by mobilizing internal and external borrowings, ultimately transferring the burden to the future generation.

Revenue mobilization in an economy like Nepal is very challenging because the majority of the people live in extreme poverty and the people engaged in economic activities have enormously inadequate taxable capacity. To augment revenue or to counter fiscal deficit, the government should strengthen tax administration in a scientific way, broaden tax base and the tax laws should be apparent, simple and transparent.

Although recurrent expenditure is higher in contrast to capital expenditure, revenue deficit does not exist in Nepal’s tax structure. But, fiscal deficits are higher in the international level as well as in the Nepalese context also. The prospect for counterpart funding (external assistance) is extremely limited to ensuring partnership in development activities.

In Nepal’s tax structure, revenues are buoyant but inadequate to supplement developmental activities. The high single digit growth rates are fine but these are still lower than what Nepal could potentially achieve if it is unfettered from many of its constraints.

Theoretically, deficits are not necessarily bad, especially for a developing economy, if its resources are employed in a productive manner. However, if unchecked, they have the ability to ruin a nation’s finances, thus ultimately impacting its citizens. Deficits are but one feature of a developing economy given to the compulsions of investing for future growth especially in a situation of a saving investment mismatch. However, in the case of Nepal, the composition of the deficit is a major source of worry, as there is a clear lack of productive focus.

To put things in perspective, the total fiscal deficit to GDP was 5.0 per cent in 2008/09 which has increased comparatively than the previous year which was 4.1 percent and foreign grant to GDP was 2.7 per cent. The GDP ratio of total expenditure and revenue has increased in the fiscal year 2008/09 compared to that of 2007/08. The ratio of expenditure/GDP increased to 19.8 percent in the year 2007/08, and 22.2 percent in 2008/09. The capital expenditure to GDP and recurrent expenditure to GDP was 7.4 percent and 12.9 percent respectively. Similarly recurrent expenditure and capital expenditure increased by 39.7 percent and 36.6 percent respectively than previous year. (Economic Survey, 2009/10) Hence despite substantial buoyancy in tax revenue, the fiscal deficit still continues to occupy a high percentage of GDP. This is significantly not a comfortable situation where fiscal deficit gobbles up Nepal’s gross domestic product. Moreover, the structure of expenditure is quite skewed in favour of the unproductive administration expenses, poorly designed subsidies and the like. In essence, it leads to mere postponing of the problem to the future while making the current scenario work hunky dory.

According to the economic survey, the revenue contribution to GDP in 2008/09 was 14.5 per cent and the contribution of total expenditure to GDP was 22.2 per cent, of this as much as 2.7 per cent was used for interest payment and debt servicing. Add to that the amount of central government debt that has fallen due for repayment and one stares at a distressing scenario. Things are unlikely to be much different in the current year, which appears to be a case of leading to an internal debt trap, where the government is forced to borrow just to repay loans rather than using the same productively.

Another gloomy picture emerges, if one looks at the trend of fiscal deficit in Nepal, for a capital scarce country like Nepal, it cannot be forgiven if it fails to manage its own expenses. But, this appears exactly what has been happening resulting in increasing fiscal deficit.In this case, despite some improvement, the fiscal deficit to GDP for 2008/09 is 5.0 per cent. Hence the revenue/GDP ratio as a percentage of expenditure/GDP ratios is close to double.

High fiscal deficits typically cause four problems: A balance of payment crisis; high interest rate; high inflation; and trade deficit. To be honest, the time of reckoning has come. Threat of inflation is now very real in Nepal, as it is all over the world. Food prices are also skyrocketing. With the interest rates hardening, growth is already getting impacted. On top of that, if our fiscal profligacy continues, it will consequently result in high fiscal deficit, high inflation and high interest rate leading to curtailed public investment and of private investment being crowded out. Developmental expenditures is a vital organ of the budget.
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MEDIA GOOGLE

“The UN will strive to initiate actions against the guilty.”

(UN Secretary General’s Special Representative for Children and Armed Conflict Radhika Kumaraswamy demanding action Maj. Niranjan Basnet for rights abuse during people’s insurgency, The Kathmandu Post, 14 Oct.)
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ARMY CHIEF LEAVING FOR SOUTH KOREA

Kathmandu, 14 Oct.: Chief of the Army Staff Gen Chhatra Man Singh Gurung is flying to South Korea next week to attend a regional conference of the Chiefs of Defence of the Asia-Pacific region, The Himalayan Times reports.

Nepal Army Spokesperson Ramindra Chhetri said Gen Gurung will leave for South Korea on October 17 for a weeklong visit at the invitation of Admiral Robert Willard, US Commander for the Asia-Pacific region.

This will be CoAS Gurung’s second foreign trip in less than five days. Gen Gurung returned from the United Kingdom today after completing a 10-day visit to the country.

“Details of the agenda of the regional conference are yet to be received,” said Chhetri, adding, it’s a regular meeting of the Chiefs of Defence of the region’s 42 member states. The annual conference is being coordinated by the Asia-Pacific Command.

Last year, this conference was held in Hawaii, USA, in which Gen Gurung had also participated. Senior military and defence officials of the United States, Japan, Australia, New Zealand, South Korea, Nepal, ASEAN regions among others will gather in the conference.

A military source said military and defence cooperation including fighting sea piracy and terrorism would figure in the conference.
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