NEW SAARC CHIEF ASSUMES OFFICE
Kathmandu, 13 March: Ahmed Saleem, 62, of Maldives assumed office as new SAARC General Secretary in the Kathmandu-based headquarters of the eight-nation
South Asian regional organization in mid-term.
He replaces the body’s first woman chief Dhyana Saeed who left coinciding
with government change in her island republic.
Saleem is a former director of the body.
Saleem is a career diplomat.
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CENTRAL BANK DEBARS SERVICE CHARGE
Kathamandu, 13 March: Nepal Rashta Bank (NRB) has debarred banks
and financial institutions (BFIs) from charging depositor service charge, the central bank said Monday.
NB allowed BFIs to buy and sell foreign currencies in 30 districts; only commercial banks were previously permitted such exchange facilities.
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IOC PROPOSES 5%MARKETING MARGIN ON FUEL EXPORT
Kathmandu, 13 March: Ministry of Commerce and Supplies is yet to convince Indian Oil Corporation (IOC) in reducing marketing margin though there is only 15 days to end the petroleum products import agreement between IOC and Nepal Oil Corporation
(NOC), The Himalayan Times reports.
“IOC has proposed five per cent marketing margin,” spokesperson at the ministry Deepak Subedi, said, adding that the ministry is, however, trying to reduce the market margin since NOC is a bulk buyer.
IOC has been charging 2.5 per cent marketing margin along with Price Adjustment Factor at present. But, IOC has proposed to scrap the Price Adjustment Factor after it became the issue of dispute in Nepal and replace it with doubling the marketing margin to five per cent.
However, parliamentarians and government officials have been saying that the increment in marketing margin will cost Nepal huge. “The overall import of petroleum products is increasing,” said secretary at the Office of Prime Minister Purushottam Ojha, who was secretary at the Ministry of Commerce and Supplies until some time ago. “Five per cent marketing margin means Nepal will have to bear millions extra.”
The dollar is gaining strength compared to rupees, he said, adding that it will also have impact since the price of petroleum products is skyrocketing in the international market.
Ojha suggested that Nepal should take stand on flat marketing margin instead of percentage base. “The government should directly talk to the Indian government, if the issue will not be solved in the ministerial level,” he said, adding that Nepal and India had signed a five-year agreement in March 2007 to import all the petroleum products from Indian Oil Corporation.
The ministry should sort out all the issues at the earliest since the time for new agreement is coming close, he suggested.
Earlier, lawmakers at the Economic and Labour Relation Committee suggested the government to promptly initiate direct talks with Indian government to renew fuel import contract with Indian Oil Corporation. Government intervention is a must to sort out thorny issues and India as a good neighbour would reduce five per cent marketing margin to supply petroleum products to Nepal,” lawmaker and former Finance Minister Dr Ram Sharan Mahat said.
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DEPOSIT TATES DOWN , NOT LENDING
Kathmandu, 13 March: With an increase in deposits and liquidity situation easing, the banks have started to decrease interest rates on deposits. However, they are sitting tight on lending rates due to increasing cost of fund, which is the interest paid for lending,
Kuvera Chalise writes in The Himalayan Times.
The banks that were offering as high as 12 per cent interest to attract deposits during last fiscal year’s liquidity crunch have now come down to as low as six per cent on average due to higher cost of fund. A lower cost of fund will generate better returns when lent on short-term and long-term. The spread between the cost of fund and interest rate on deposit is one of the main sources of profit.
According to the second quarter reports of listed 25 banks, out of 32, the cost of fund has increased to 8.38 per cent compared to 7.93 per cent in the same period last fiscal year. According to some bankers, the lending rates will go down only after the third quarter. But others said the lending rates will not go down even after the third quarter because of tight Capital Adequacy Ratio of the most of the banks as they do not have enough room to lend, which subsequently will put pressure on decreasing the interest rates on deposits.
But decrease in interest rates on deposits, and not on lending rates, could increase the spread, which according to the central bank should be at around three per cent on average.
Had the lending rates also been lowered, the private sector borrowing would have increased, benefiting the economy that is going to witness low manufacturing contribution to the gross domestic product due to contraction in private sector demand.
The central bank’s six months’ data revealed that loan and advances of all the banks and financial institutions increased by 6.5 per cent to Rs 55.25 billion compared to the growth of 8.6 per cent to Rs 63.75 billion in the same period last fiscal year.
Similarly, the deposit mobilisation of banks and financial institutions has increased by 10.4 per cent to Rs 85.68 billion during the six months of the current fiscal year 2011-12 against only 3.7 per cent to Rs 26.64 billion in the same period of the last fiscal year, according to the central bank data. “Deposit mobilisation of commercial banks, development banks, and finance companies increased by 11.4 per cent, 11.6 per cent and 1.7 per cent, respectively, against 0.6 per cent, 11.2 per cent and 8.3 per cent in the same period last fiscal year.”
However, the increase in deposits has made no change to banks’ CAR.
The second quarter report of the listed 25 banks revealed that they have the average of 14.04 per cent CAR, which should be 10 per cent, according to the central bank’s directive. The listed 25 banks have Rs 617.54 billion total deposits, which mean they have Rs 24.94 billion loanable amount.
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VAT MANDATORY FOR BRICK FACTORIES
Kathmandu, 13 March: A dialogue committee formed to address the row between Inland Revenue Department (IRD) and brick factories over the imposition of value added tax (VAT) on bricks production, has come with the recommendation to impose the tax, The Kathmandu Post writes.
Although representatives from the factory operators opposed the recommendation, majority of committee members stood in faovur of imposing VAT on bricks production and the report was also prepared accordingly. The committee submitted its report to Finance Minister Barsaman Pun on Monday.
“We have mentioned in the concluding section of the report that the VAT must be implemented,” said a Finance Ministry official, who is also a member of the dialogue committee.
Although the government has been trying to bring the brick factories under VAT net, they have been protesting the government’s move. Despite committee’s recommendation to implement VAT on bricks productions, Finance Ministry officials harbour doubts over its implementation.
“Last year too, an attempt to bring them under VAT net had aborted after then Finance Minister Bharat Mohan Adhikari and factory owners reconciled themselves,” said a source at the Finance Ministry.
However, the IRD continued its effort and issued notice in the name of brick producers in second week of January to come to VAT net. But they resented the IRD move by stopping sales of bricks on January 15. The Finance Ministry then formed an 11-member dialogue committee on January 27 under government’s joint secretary Wegendra Poudyal.
With the representatives from the government and brick producers sticking to their stance, the committee suggested various nine options in the report, including the one to register the firms under VAT and exempt them from paying outstanding VAT amount. Another alternative was to collect VAT from all factories collectively as per their capacity, withdrawing certain VAT amount to respective firms.
“The government can also impose ‘green tax’ at the rate a little lower than VAT rate,” the report has suggested.
Collecting VAT in flat rate and withdrawing 85 percent of amount back to themselves is another option suggested by the brick factories.
However, the government officials say that there is no point in implementing such measure as it does not require to issue bills. “Implementing VAT will be just a drama if bills are not issued,” said the finance ministry source.
Officials say that the transactions of brick factories will remain non-transparent if VAT is not imposed.
However, vice-president of Federation of Brick Factories Bishworam Kwan is hopeful that the government will take positive decision on brick factories despite the existing difference between the two sides.
According him, only 485 out of about 750 brick factories in operation come under tax net at present, according to the IRD. There is a provision which says any factory with an annual transaction above Rs 2 million should be registered with the VAT and those with transactions below that should register with excise duty. Currently, 210 factories come under the VAT net.
“Hardly any brick factory may have transactions less than Rs 2 million a year given that price of brick has soared lately,” said an IRD official.
A recent research carried out by IRD found out that each factory within the Valley has been producing 5-20 million pieces of bricks at a time. A factory produces bricks 5-6 times a year. Each brick costs Rs 10.
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MAOISTS SEEK NC FLEXIBILITY
Kathmandu, 13 March: UCPN (Maoist) has demanded that for the integration process to kick-start Nepali Congress (NC) should be flexible on “moving one step forward” from its current stand on “traditional” parliamentary system, Kamal Deb Bhattarai writes in The Kathmandu Post.
The Maoist leaders on Monday urged the NC to be flexible on contentious issues of constitution, including forms of governance so that a meeting point could be found somewhere between a parliamentary system proposed by the NC and the directly elected presidential system proposed by the Maoists.
Maoist leaders say they have grown suspicious over NC’s intent on the new constitution, especially after NC senior leader Sher Bahadur Deuba’s remarks on Monday that a revised 1990 constitution can be an alternative in case the Maoist-led government fails to draft the constitution by May 27.
Maoist insiders said despite the party’s official position to go for a presidential system, the party is ready to start the integration process if NC accepts a “mixed model”—in which powers would be shared between a directly elected executive president and a parliament-elected prime minister. This is a win-win solution which asks for compromises from both the NC and the Maoists, said Maoist leader Haribol Gajurel. “We want NC’s assurance before the integration process completes because it may get stubborn thereafter,” said another leader.
Deuba’s statement, Maoist leaders say, has raised serious questions at this political juncture. Maoist leader Agni Sapkota, close to Chairman Dahal, said the Maoists could not even think of adopting the 1990 continuation.
Maoist top leaders say they are in serious discussions with other parties on forms of governance and federalism along with integration of Maoist combatants.
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PM BHATTARAI IMPLICITLY CRITICIZES SHER BAHADUR DEUBA
Kathmandu, 13 March: Prime Minister Dr Baburam Bhattarai Monday said partisan politics in development works would do harm to the nation, The Rising Nepal reports from Gorkha.
Inaugurating the programme organized to make public the policy and budget of Gorkha district that was approved by the fifth District Council, the Prime Minister observed that modernization in agriculture would usher in development in the district.
Saying that the district was left behind in development, the Prime Minister noted the northern belt was still more backward compared to other sides.
A total of 3 billion 45 million 898 hundred thousand and 885 rupees of budget has been proposed for the upcoming fiscal year for the district.
Touching upon politics, Prime Minister Dr Bhattarai remarked the three-party dialogue was moving ahead positively.
He said some parties were bent on reviving the 1991 constitution and declared that doing so would make a sheer loss of the sacrifices made by thousands of people.
Stressing that the parties had no other alternative than to come together, the Prime Minister claimed his government would promulgate constitution even by making compromises and adopting a policy of give and take.
He stated that it was not time for the parties to blame each other but to understand and work for delivering the new constitution.
He observed any failure to promulgate constitution by May 27 would result in a great misfortune to the country and the people.
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PM ASSURES SAFE-LANDING AMIDST AIR TRAFFIC CONTROLLERS
Kathmandu, 13 March Prime Minister Dr. Baburam Bhattarai has said that Nepal is all set to enter a new stage of political stability, leaving behind the chaos of uncertain legacy of instability, The Rising Nepal reports.
The Prime Minister was inaugurating the 51st annual conference of the International Federation of Air Traffic Controllers’ Associations (IFATCA) in the capital on Monday.
Dr Bhattarai drew a metaphor from aviation world to paint the picture of Nepal’s economic development and political transition. He said, "We are still in the sky. We are in the final approach and are in the process of safe landing."
He said that he could not forget the initial waves of human endeavors searching for a common sky, common speed and common goal in aviation sector that was the idea of freedom to fly over other countries inspired by many earlier treaties.
He said that Nepal opts for international air transport policy that can increase global accessibility, optimize utilization of Nepalese air space and maximize economic benefits to the nation by promoting tourism and trade with safe and efficient air transportation.
Stating that people have triumphed over the past narrowness in exploring new possibility and avenues of common motion, the Prime Minister said that the current globe has been transferred into a single village with the advancement of air transport.
Referring to the present status of Nepalese aviation, the Prime Minister said that the government has initiated various constructive works in this sector.
No compromise would be made regarding the air service security, the Prime Minister said and added that arrangements would be made for its effective operation, he assured.
The 5-day international meeting of aviation traffic controllers is concluding on Friday.
Meanwhile, Prime Minister Dr Baburam Bhattarai has said that Tribhuvan University and other pioneering institutions of higher education should transform themselves into the centres of excellence to supply qualified manpower needed for national development.
Addressing a function of TU on building of the centre of excellence in university campus on Monday, Dr Bhattarai said that such manpower will be crucial when the nation concludes the process of peace and constitution and moves to achieve rapid development and prosperity.
Dr Bhattarai emphasized integration of specialized knowledge, management of resources and good administration in order to make universities centre of excellence. TU as a public university of Nepal should strive to ensure easy access of the people to quality and inexpensive education, he said.
With good management, TU should prove the notion wrong that inexpensive education is not qualitative, the Prime Minister said. The state needs to place priority on education at all levels. However, strategic priority should be fixed.
"When the peace process comes to a conclusion, the state should give priority to the kind of higher education that supports economic development of the nation," Dr Bhattarai said.
Imparting sub-standard education is even worse than not giving education at all. Education that fails to meet quality cheats the students by wasting their valuable resources and time and failing them to change life for better, the Prime Minister said.
We have a situation where students are unable to attend classes because of poverty, job affiliation and other social factors. To address this problem, TU needs to introduce open and tele-learning models that enhance access to education to all aspirants, Dr Bhattarai said.
The Prime Minister sought the intensive discussions and inputs from scholars to provide guidance for the long tern education policy of the nation.
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PM PROPOSES VOLUNTARY RETIREMENT OF PARTY’S FORMER FIGHTERS
Kathmandu, 13 March :
Prime Minister Dr Baburam Bhattarai Monday floated a new proposal on combatant’s integration.
In a meeting of the Dispute Resolution Sub-committee under the Constitutional Committee Monday, he said that the meeting of Army Integration Special Committee slated for Tuesday would decide to give an opportunity for the combatants who opted for integration to choose voluntary retirement, The Rising Nepal reports.
According to sources, at the meeting the Prime Minister put a proposal to provide one more chance to the 9,500 combatants opting for integration to choose voluntary retirement.
"It will ease the process of integration as per the seven-point agreement that stated that only 6,500 combatants will be integrated" the source told as PM saying.
The Prime Minister also said after the combatants made the choice, the integration calendar would be prepared and the combatants would be handed over to the Nepal Army.
At the meeting Nepali Congress and CPN-UML leaders refused to discuss the contentious issues of the new constitution before pushing the peace process forward.
After the meeting NC leader Bimalendra Nidhi told journalists that the discussion about the mixed election system would move ahead only if the Tuesday’s AISC meeting took a concrete decision on peace process.
UML senior leader Madhav Kumar Nepal told the Prime Minister and the Maoists to conclude the peace process before initiating discussions on the issues of the new constitution. He walked out of the meeting before it ended.
UML leader Agni Kharel said the meeting was positive and the discussions on constitution would move ahead after the AISC’s Tuesday meeting.
Prime Minister Bhattarai, UCPN (Maoist) chairman Pushpa Kamal Dahal, NC parliamentary leader Ram Chandra Poudel, UML chairman Jhala Nath Khanal and others were present in the meeting.
At the meeting leaders also discussed about extending 15 days’ time to forge consensus on the disputed issues of the constitution.
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