Eggheads Say No to Populist Budget

Intellectuals and economists today warned the government not to resort to a populist budget. At an interaction organized by Nepal Intellectuals’ Council (NIC) here today, speakers urged the government to follow priorities set in common minimum program of the coalition government.

The budget must reflect the as- pirations of the people — reduction in price hike, implementation of development projects in villages and social security, said Bhim Prasad Neupane, president of NIC. “Reducing prices is a major challenge for the government and it must work on it,” he said.

Due to global economic crisis, consumer prices have fallen to their lowest level all over the world but Nepal is experiencing a reverse phenomenon — double digit inflation since the last six months. Neupane urged the government to critically review populist programmes like literacy campaign and youth self-employment programme started by the Maoist-led previous government.

Joint secretary at the National Planning Commission (NPC) Pushpa Shakya said, “NPC has adopted a conflict-sensitive strategy in budget making,” he said. According to Shakya, the new budget will address the labour market and its dependence in agriculture. To counter the challenges, the new budget will focus on industrial development, he added.

However, Prof Dr Madan Dahal, doubted the government’s capacity to develop an investmentfriendly environment. “I am not sure that the government can make a conducive industrial environment in this transitional peri od,” he said. He urged the government to focus on five issues — subsidies in agriculture, make industrial environment, end power shortage, provide safe drinking water and control the price hike

Other ministries of the government have asked the Ministry of Finance (MoF) for around Rs 332 billion for fiscal year 2009-10. Meanwhile, NPC has targeted to achieve six per cent gross domestic product (GDP) growth - 4.4 per cent in agriculture and 7.1 per cent in non-agriculture sector — for the coming year. “NPC and MoF are working on it to make a realistic projection. It is not the final draft,” said Shakya. The government expects 17.5 per cent increase in revenue the coming year.

Revenue secretary Krishna Hari Baskota highlighted the demands of ministries in the next budget. According to Baskota, there is a strong demand for East-West Highway in hill region, upgrade Hulaki Sadak in Tarai, fast-track road joining Kathmandu with Tarai. Upgrade of sub-health posts to health post, free education till secondary level, international airport at Neejgarh and economic diplomacy budget for Ministry of Foreign Affairs (MoFA) are other demands.

The private sector has asked the government to ensure security of entrepreneurs, promulge new industrial policy and implement special economic zones for export promotion. The Ministry of Environment has asked for necessary laws to expand forest cover from the present 40 per cent to combat climate change. Economists Dr Govinda Ba- hadur Thapa and Prof Dr Bishwombhar Pyakurel urged for making an industrial environment for sustainable growth.

Acer Brings New Series

Acer has launched Acer Aspire Timeline series and Acer Aspire G3730. Timeline is an ultra thin and light notebook, more efficient and with minimum power consumption for maximum usage time. It is just 1.6 kg and with more than eight hours battery backup. Timeline is 24mm (less than an inch) at its thinnest point. The featherweight notebook ranges from 1.6 kg for the 13.3” model to 1.9 kg for the 14’’ model. The Timeline series has strictest Energy Star 5.0 prerequisites. It consumes 66 per cent less Energy Star Plus. Available at Acer Resellers from June 19, its recommended price is Rs 80,000.

The other product, Acer As- pire G3730, was created to give more people the opportunity to be connected with low cost desktop. The sleek Acer Aspire G3730 combines tier one components and impeccable performance at a price that is unbeatable.

This dual core desktop comes with all basic components as well as a DVD-RW, card reader and a 19” wide LCD monitor. The product is available at all Acer’s authorised resellers from June 19 for Rs 42,000.

Hotel Association Nepal Team Meets PM

Hotel Association Nepal (HAN) president Prasiddha Bahadur Pandey on Friday submitted a memorandum to Prime Minister Madhav Kumar Nepal. According to a HAN statement, the association urged the government to grant its full support for the promotion of Nepal Tourism Year 2011. Till date, HAN has made an investment of Rs 150 billion and called for more investments from different tourism entrepreneurs.

Nepal Oil Corporation concerned

Nepal Oil Corpora tion (NOC), Nepal National Employees’ Union (NNEU) and NOC Employee Union (NOCEU) have jointly voiced concern regarding the sales and distribution of petro-chemicals by Koshi Petrol Chemicals Pvt Ltd, Hattimudha, Morang. The industry has been categorised a small productive industry and registered with the Department of Industry, is distributing diesel, said a joint statement by NOC, NOCEU and NNEU adding that the distribution was illegal.

Agriculture Develop ment Bank Ltd Ready for IPO

Agriculture Develop ment Bank Ltd (ADBL) has sought the permission of Securities Board of Nepal (Sebon) for the distribution of its Initial Public Offering (IPO). After the permission, the bank will distribute shares of Rs 960 million, read a press note. The bank has total shares worth Rs 1.80 lakh for its employee and remaining Rs 9.12 million worth shares for general people. Earlier, it distributed rights share of Rs 452.5 million to its shareholders. According to the bank, it will be the first time in the banking history of Nepal that a huge number of primary shares will be floated.

Workers Lend Support

Employee unions of state-owned banks have expressed their solidarity with the strike of Nepal Bank Ltd (NBL) on Friday. NBL employees have been on strike since June 5 after the management called for compulsory retirement plan. The workers said that on June 4, the management reduced the service period from 33 years to 30 years without the seeking either the opinion or consensus of the employee union before calling for retirement plan.

John Player’s New Outlets

John Players (JP), premium men’s wear brand from Surya Nepal synonymous with class, bouquet of finest fabrics and playfulness with style, has opened its sixth exclusive branded outlets at City Center Mall (on the first floor) at Kamal Pokhari and a seventh one at Maharajgunj, respectively.

Biratnagar Jute Mill to Fire All Workers

Reeling under a shortage of raw materials leading to obstacles in production, Biratnagar Jute Mill has decided to lay off all workers and employees.

At a general convention of the mill, where the government owns 46 per cent share, it was decided that all employees would be laid off, bearing the financial burden of nearly Rs 500,000,000. The general convention meeting authorized the mill management committee to clear the way for apportioning the amount required to pay the dues of all employees.

Around 1,300 workers and employ- ees are working at the mill. Earlier, the mill got a new lease of life following the apportioning of Rs 70,000,000 by former finance minister Dr Baburam Bhattarai. However, this amount could only suffice to clear some dues of employees and administrative works.

Vanaspati Oil, Ghee Sector on Verge of Death

Vegetable oil manufacturers in the country are failing to sustain their industries due to heavy tax imposed and incompetence compared to the neighbouring market.

At a time where there used to be ap- proximately twenty-one industries, only sixteen are in operation. These vanaspati industries were set up mainly to export to India after Nepal and India signed a treaty in 1996.

“We used to export 70 per cent of our products to India at one point of time, but since India has begun to implement a domestic subsidy and zero per cent duty on import we have not been able to counter the competition,” said Manish Kumar Agarwal, first vice-president, Vegetable Ghee Industries.

Due to border trade, the influx of Indian goods is also a factor in the near failure of vegetable ghee/oil industry sector in Nepal. “The duty levied in India is zero per cent while in Nepal we have to pay the government 14 per cent, which is a lot in terms of import as well as export. The domestic market is helping us barely survive,” added Agarwal. “The vegetable ghee/oil industry is in a dire situation. We want the government to cut down the duty which it had at one point of time but now it has increased it by five per cent on soyabean oil, which is the main product being used in the domestic market,” said Sandip Kumar Agarwal, general secretary, Shri Shivshakti Ghyu Udhyog.

The shutting down of even one of these industries could result in 200 people going jobless. “The workers in factories are not the only ones who will bear the brunt, it is also people working in other areas like packaging who will suffer,” added Agarwal.

Both industrialists agreed that the gov- ernment needs to sustain local industries and products, and to do so it should subsidize rates in the domestic market as well as control rate of duty. The vanaspati industry contributes up to 10 per cent to the gross domestic product (GDP).

Etihad Air’s $14 Billion Deal

Etihad Air ways has chosen GE Aviation, Rolls-Royce, Engine Alliance* and International Aero Engines to power the new Airbus and Boeing aircraft that it ordered at last year’s Farnborough International Airshow. The Farnborough deal included 100 firm orders and options and purchase rights for a further 105 aircraft, which will be delivered between 2011 and 2020. The Abu Dhabi-based national airline announced firm orders on Wednesday at the Paris Air Show for 78 GEnx engines for 35 new Boeing 787s, 45 Engine Alliance GP7200 engines for 10 new Airbus A380s and 44 IAE V2500 engines for its 20 new narrow-body Airbus A320s. Rolls-Royce and GE Aviation will supply engines for the airline’s new A350 fleet and future Boeing 777s.

DCBL’s Rights Shares

Development Credit Bank Ltd (DCBL) is distributing 2:1 rights shares to increase its paid-up capital to Rs 1.66 billion, according to a press release issued by the bank. The commercial bank that has upgraded from a development bank has been issuing rights shares according to the directives of Nepal Rastra Bank (NRB) to increase paid-up capital to Rs 2 billion by Ashad 2067, read the press release.

Jyoti Bikas Bank Expands its Branch in Simra

Jyoti Bikas Bank (JBB) expanded its services to the industrial area of Simra on Thursday. Chairman of the bank Pracharman Singh inaugurated the fifth branch. JBB, opened on July 24, 2008, has a deposit base of Rs 700 million from 6,350 accountholders while it has invested Rs 600 million. According to a statement issued by the bank management, the bank posted a net profit of Rs 4.5 million by the end of Jestha.

Commodities and Metal Exchange's New BoD

Commodities and Metal Exchange Nepal Ltd (Comen) elected a seven-member board of directors (BoD) chaired by Manoranjan Raman Sharma on Wednesday. A meeting of the BoD and shareholders appointed former executive officer Bijaya Satyal chief executive officer and formed a five-member advisory committee led by former chairman Bishwanath Sharma. Meanwhile, Comen sold its promoter shares to Akash Investment Bankers Ltd, Sanjaya Man Singh, Bhupesh Rajbhandari, Manoranjan Raman Sharma, Subash Narsingh Shakya, Broker Group, Ramesh Kumar Bhattarai and Sujan Kumar Kafle to increase paid-up capital to Rs 525 million

According to the Comen statute, promoters have to buy 75 per cent of paid-up capital equivalent to the amount.

10th Branch of NMB In Thamel

NMB Bank Ltd opened its 10th branch along Amrit Marg in Thamel on Wednesday. The bank plans to expand its service to 11 branches within the current fiscal year, the bank’s press release said. Recently, NMB introduced postpaid mobile service and PSTN service where customers can pay their NTC mobile bill online.

FNCCI Woos,Wins Over Turkey

Turkey has shown interest in investing around $500 million in Nepal if the security situation improves in the coming days. “Turkey has shown interest in the tourism and hydropower sectors,” a Federation of Nepalese Chambers of Commerce and Industry (FNCCI) press statement read. Eight members of FNCCI head- ed by president Kush Kumar Joshi visited Turkey-World Trade Bridge 2009 in Istanbul from June 1 to 7. Around 135 countries from Europe, Africa, Eurasia, Middle-East and Asia participated in the trade fair. The FNCCI team also participated in the 1st Istanbul Trade Ministers Summit, a gathering of over 2,000 government officials, entrepreneurs and journalists from all over the globe. The objectives of the meeting were finding a way out of the global financial crisis and brining new ideas of world trade. From the trade fair and meet- ing, Turkey got a business of over $700 billion. The Nepali team also experienced fruitful participation in exploring foreign markets and motivating foreign investors to invest in Nepal.

Look ‘n’ Smell Good Factor Scores

Beauty comes at a price, and people in the valley are willing to pay that price to look and smell good. The cosmetics and perfume trend has picked up considerably as people have become more aware and self-conscious. The middle class now seeks to stay in tune with everything that comes in the market as well as stay abreast of current trends.

“We see the middle class becoming more and more conscious of what is in as far as cosmetics and perfumes go, and they are very willing to spend to look and smell good,” said Sabina Maskey, supervisor at Bluebird Cosmetic Department. Indian brands like Revlon and Street Wear are very popular among customers in the valley while Pierre Cardin and Florelle are well liked as well. “We are importing Indian and American Revlon. It comes in the high price category and is doing very well in Kathmandum,” she added. Products by Florelle are priced at anything between Rs 200 to Rs 2,650 while Revlon goes up to Rs 2,000. Street Wear is a more budget buy. Perfumes and colognes by Hugo are the most sought after, with prices ranging anywhere between Rs 2,500 to Rs 7,000.

“People here have strong purchasing power, especially the middle class. We bring in products and they sell pretty well,” said Narottam Dangal, owner of a perfume store 5th Avenue, a store at Sherpa Mall, caters to all pockets. Perfumes ranging from Rs 1,500 to Rs 10,000 are available here

“There has been an increase in the cosmetics and perfume purchasing trend. What was initially targeting the upper crust is now being bought by the middle class. There is no disparity as far as purchasing power is concerned,” said Binod Bakharel, manager.

Face care products by L’Ore- al, Garnier and Olay are also very popular. L’Oreal products also range in the high-end category but most people are now going with quality rather than price, said Naresh Shakya, supervisor at Bluebird Departmental Store. “People don’t worry about price as long as the product is good. Garnier and L’Oreal are favourites among most customers who come here,” he added. The market is an oasis of op- portunity and people are making the very best of it as long as it caters to their needs. All the people are willing to spend.

Kirloskar Green Gensets in Town

Vishal Trade Links (VTL) — a sub sidiary of Tater Group and Sterling Group (SG) — has introduced noisefree and environment-friendly ‘Kirloskar Green’ generator sets in the market.

VTL and SG of Nepal and Bhaskar Power Projects Pvt Ltd (BPPPL)-Kala Gensets Pvt Ltd (KGPL) signed a memorandum of understanding here on June 12 to supply ‘green power’ gensets in Nepali market. Associate vice-president of BPPPL and KGPL Sanjaya Jain signed the MoU on behalf of the companies. BPPPL and KGPL are subsidiaries of Kirloskar Generators authorized to market ‘Kirloskar Green’ in Nepal. The generators are available in the range from 5KVA to 600KVA.

The MoU also includes after-sales services, availability of spare parts and maintenance. The fad for gensets grew after the prolonged hours of power outages, leaving people angry and frustrated .

New Revenue Policy in Offing

The finance ministry is preparing the Revenue Policy for the fiscal year 2009-10. On the basis of the policy, the revenue target will be set though according to tradition the ministry increases the revenue target every new financial year. “According to tradition, successive govenrments have been increasing the revenue target by over 15 per cent to 20 per cent every year,” said Dr Shanker Sharma, former vice-chairman of the national Planning Commission (NPC), the country’s think-tank.

“If revenue target is in- creased by 20 per cent, it will come to around Rs 170.06 billion. The size of the budget might also go beyond Rs 280 billion. Setting a high revenue target will help stop leakages and corruption,” he opined. “If the government wants to increase the revenue target, the infrastructure is in place,” said acting revenue secretary Krishna Hari Baskota. Due to the Voluntary Disclosure of Income Sources (VDIS) also, the tax net has widened giving room for increase.

However, the business community has been requesting the government not to be revenue-oriented but to implement earlier policies. Former Finance Minister Dr Bhattarai had set a revenue target at Rs 141.72 billion — that was dubbed highly ambitious — for this fiscal year. Dr Bhattarai’s total budget size for this fiscal year was Rs 236.15 billion. The encouraging collection of revenue is attributed to three major reasons: priority of the finance ministry for revenue mobilisation, fear in the business community of the Maoist leadership and the alacrity of the leadership itself. VDIS and rising inflation — that pushed customs and VAT up — helped achieve Dr Bhattarai’s revenue target. But this year, the price hike is expected to come down and that will hit the VAT and customs collection.

The finance ministry has, however, met this year’s ambitious target that was over 33 per cent than last fiscal year. By the end of Jestha — the 11th month of the current fiscal year — the ministry collected a total of Rs 121.24 billion, surpassing its target of Rs 117.80 billion for the month. The total revenue target is short by only Rs 17.37 billion. “The target for the last month of this fiscal year, Ashad (mid-June to midJuly) is Rs 23.92 billion but only Rs 17.37 billion is needed to meet the total target of Rs 141.72 billion as in the earlier months we have surpassed the target,” Baskota added. The ministry had collected Rs 90.17 billion during the same period last fiscal year. In comparison to the same period last fiscal year, revenue collection has increased by Rs 31.07 billion — a 34.4 per cent growth. Despite its failure to spend on development activities, the previous finance ministry under Dr Bhattarai concentrated on revenue mobilisation by forming separate desks for separate types of taxes and systematisation of tax and regular follow-up.

Development Credit Bank Ltd starts 5th Branch in Bhairahawa

Development Credit Bank Ltd (DCBL) established its fifth branch office in Bhairahawa on Tuesday. The bank has also distribution of its rights share in a ratio of 5:1. As per the directives of Nepal Rastra Bank (NRB), it will increase capital fund to Rs 2 billion by Ashad 2067.

Sunrise's 23rd Branch in Thamel

Sunrise Bank Ltd opened its 23rd branch in Thamel, a tourist zone of the capital on Wednesday. Chairman Tola Ram Dugar inaugurated the branch amid a function of businessmen, officials and people. According to chief executive officer Kishor Maharjan, the new branch will provide services to facilitate business in Thamel area.