NEW CHINESE AMBASSADOR APPOINTED Kathamandu, 26 Jan.: Wu Chuntai has been appointed new Chinese ambassador. Wu replaces Yang Houlan who has been transferred to Myanmar following a recent Chinese Communist Party Congress. The new ambassador is Deputy Director General of the Department of External Security Affairs at the Chinese Ministry of Foreign Affairs. Nnnn GOLD IMPORT DUTY INCREASED Kathmandu, 26 Jan.: Government Friday hiked inpot duty on gold. The dutyws increased Rs 700 per 10 grams to Rs 3,000. The move was aimed to curb smuggling. nnnn. NEPAL SENDS GREETINGS TO INDIA ,Kathmandu, 26 Jan.:President Ram Baran Yadav and Prime Minister Baburam Bhattarai have congratulated their Indian and counterparts on the occasion of the Republic Day of Indiam RSS reports. . In a message on Saturday, President Yadav extended his cordial felicitations and best wishes to Indian President Pranab Mukherjee on the happy occasion of the Republic Day of India . Likewise, Prime Minister Bhattarai congratulated his Indian counterpart Dr Manmohan Singh on behalf of the government and people of Nepal and on his own on the occasion of the Republic Day of India . Meanwhile, both head of the state and executive head of the state also congratulated their Australian counterparts on the occasion of National Day of Australia. Moreover, Prime Minister Bhattarai has congratulated Australian Prime Minister Ms Julia Eileen Gillard on the occasion of National Day of Australia and expressed the confidence that the friendly relations existing between the two countries would further grow in the years ahead. Similarly, President Yadav also extended cordial felicitations and best wishes to Governor General of Australia Ms Quentin Alice Louise Bryce on the occasion of the National Day of Australia. RSS Nnnn DELAYED BUDGET HITS Kathmandu, 26 Jan.: The government’s failure to introduce a full budget for this fiscal year has taken a toll on the country’s capital expenditure . In the first six months of the current fiscal year, the capital expenditure stood at Rs 7.04 billion, down 26.36 percent. The figure in same period last year was at Rs 9.56 billion, Prithvi Man Shrestha writes in The Kathmandu Post.. . The dismal status of the capital expenditure has also worried donors who expressed serious concerns about the issue in the Nepal Portfolio Performance Review (NPPR) meet that concluded on Thursday. Donors, during the NPPR interaction, had said the delay in budget announcement last fiscal year resulted in the delay in implementation of development projects and the situation is likely to be more severe this fiscal year. The Finance Ministry also admitted that the lack of a full budget affected development activities. “As a result of several efforts made by the ministry, the macroeconomic indicators are positive. But the effort to increase the capital expenditure has not succeeded as desired,” read the ministry’s press statement. Finance Secretary Shanta Raj Subedi said the capital expenditure suffered due to slow spending in the first four months as a result of the one-third budget mechanism. “The expenditure has peaked lately, but it is not enough,” said Subedi. According to the ministry, the capital expenditure amounted to 3.6 percent of the GDP, down from 7.9 percent in fiscal year 2010-11. In the absence of a full budget, resources allocated under the capital expenditure head stood at Rs 51 billion, which is less by Rs 20 billion compared to last fiscal year. Subedi said the Finance Ministry has been making utmost efforts to increase the capital expenditure by encouraging ministries to act fast and settling bottlenecks. The ministry had called a series of meetings with the officials of ministries to encourage them to increase development expenditure. “Our team will also visit development projects from the next week,” said Subedi. Total expenditure during the first six months of this fiscal year stood at Rs 95.09 billion, of which Rs 81.33 billion was spent under the recurrent expenditure and Rs 6.7 billion under the financial management heading. There has also been a sharp decline in foreign aid commitments in the current fiscal year. The government received foreign aid of Rs 15.76 billion, including grant worth 14.04 billion and loans worth Rs 1.71 billion. The government, during the first six months, received foreign aid commitments of over Rs 44 billion. With the problem in capital expenditure , the only saving grace has been revenue collection. According to the Finance Ministry, revenue collection has been impressive in the first half of current fiscal year. The government collected Rs 134.56 billion revenues, which is higher than the targeted Rs 131.88 billion for the first half of this fiscal year. During the review period, the government has been able to increase the number of value added tax (VAT) payers significantly. The ministry had planned to increase the number by 5,000, but succeeded in adding 8,304 new VAT payers. The government plans to add 10,000 VAT payers this year. The ministry collected more than double revenue through the review of tax files by reviewing less than targeted number of taxpayers. It collected Rs 4.86 billion by reviewing tax documents of 1,363 taxpayers, although target was to collect Rs 2.27 billion from 1,464 taxpayers during the period, according to the ministry. Nnnn HOTELS SLASH TRAIFF WITH FALLING ARRIVALS Kathmandu, 26 Jan.:Major hotels have slashed their tariffs since December last year following slowed growth in tourist arrivals. The room rates of most five-star properties have dropped 10-15 percent while the rest are in a wait-and-watch mode, The Kathmandu Post writes.. According to hoteliers, the rate cuts have been basically prompted by a slump in arrivals from the European and Indian markets. Visitors from these two markets are big spenders for Nepali tourism. The tariff of almost all the five-star hotels has dropped to US$ 80-90 from US$ 90-100. The decline in prices also points to fewer business-class clients. Hotel iers said that price cuts have been seen mostly at luxury hotels. With minimal growth in tourist arrivals, hotels are witnessing a drop in their room occupancy, which in return has forced them to go for price cutting measures. “As our occupancy dropped by 20 percent since December last year, we were compelled to slash our room tariff by 15 percent,” said Bharat Joshi, resident manager at the Hotel Yak & Yeti. Another five-star property Everest Hotel also reported a drop in occupancy rate during the mid-December - mid-January period. Although the hotel declined applying low rates, it expected recovery in February. A source at Everest Hotel , one of the favourites among Indian travellers, said the drop in the number of Indian tourists and cancellations by Japanese travellers in January affected its business. Amir Pradhananga, director of sales at the hotel, said they have not officially slashed the tariff, but said occupancy was hit in January. “As we are receiving healthy booking for February, we are hopeful that demand will return to normalcy,” said Pradhananga. Avik JB Singh, sales and marketing manager of Hotel Annapurna, said political instability was the major reason behind the slump that compelled the five-star properties to go for under-cutting measures. The hotel room tariff was on upward trend for the last two years. Driven by improved tourist arrivals, five-star hotels had hiked the average room tariff by 20-30 percent in the last two years. Many of them had reported record-breaking revenue in 2011. According to hoteliers, all market segments, including corporate movement, trekking, leisure and business, have slowed down. The major reason for the slump, according to industry watchers, was the political instability and the announcement polls in November last year. Hotel Association of Nepal (HAN) President Shyam Sundar Lal Kakshapati said most hotels have reduced tariffs as a result of declining tourist arrivals that hit big hotels’ occupancy. Now, the industry is keenly watching whether things will change from mid-February when the new travel season begins. “It’s a market economy,” Joshi said, hotel tariffs rise with the increase in travel demand. Normally, mid-December - mid-February period is considered off season. “But what we fear now is tourists’ diversion to Thailand and Malaysia due to Nepal’s political crisis,” said Joshi. Although the under-cutting trend has not become much visible, but if the current arrival trend continues, many of the hotels will apply low summer rates due to the demand-supply mismatch, Kakshapati said. “However, the cost-cutting war among hotels that affected the business in past years will not re-surface.” According to Kakshapati, although the travel demand from China has picked up, Nepal’s charm on Indian travellers has slowed lately. “We need to concentrate the promotional activities on two neighbours — India and China — until Europe recovers from the debt crisis.” As the Asian markets are price conscious, there is no alternative to cutting tariff rates, Singh said. “Annapurna is not an exception, but instead of cutting tariff we are providing value added services to the customers.” According to hoteliers, the number of Indian, Spanish, German, Japanese visitors has declined significantly with the start of 2013, but the number of Chinese, Americans and British visitors is stable. Given the current scenario, star hotels have projected 2013 a modest year after witnessing healthy business in 2011 and 2012. nnnn