KATHMANDU: Welcome to Nepal News’ Evening Economic Brief—your go-to update on Nepal’s key financial developments. Stay informed with concise insights on market trends, economic indicators, and policy shifts. Here are today’s top highlights:

Rs 3.68 Billion Invested in Koshi’s Orthodox Tea Industry: What Lies Ahead?

Koshi Province has 84 orthodox tea industries with a total investment of Rs 3.68 billion, where 36.4% comes from loans and 63.6% from equity. Only two industries have foreign investment. The region has 100 processing units, including 21 organic-certified and 79 non-certified.

In FY 2079/80, these industries produced 7.83 million kg of processed tea, with 88.6% exported, mostly to India and third countries. The industry’s revenue was Rs 2.57 billion, with 86.72% from exports. Low capacity utilization (56.21%) is due to raw material shortages, inconsistent electricity supply, and lack of skilled labor.

Bagmati Province Struggles with Low Spending and Declining Revenue:

Bagmati Province has spent only 25.62% of its Rs 64.05 billion budget in the first eight months of FY 2081/82. Current expenditure stands at 35.22%, while capital expenditure is just 19.94%. Revenue collection is also lagging, with only 38.13% of the target met. Provincial revenue has declined annually, with last year’s collection falling short by Rs 9.31 billion. Officials attribute the shortfall to reduced federal allocations, economic slowdown, and lower tax revenues. The Ministry of Tourism, Industry, and Cooperatives had the lowest spending at 9.79%, while the Office of the Provincial Chief Attorney led at 47.69%.

Smartphone Imports in Nepal Surpass Rs 21 Billion in Eight Months:

In the first eight months of the current fiscal year 2081/82 (up to the end of Falgun), smartphone imports in Nepal have exceeded Rs 21.91 billion, according to the Department of Customs. This marks an increase compared to the same period last year. During the same period last fiscal year, Nepal imported smartphones worth Rs 19.37 billion, with a total of 1.25 million units. However, this year, 1.4 million smartphones have been imported.
Along with rising smartphone imports, government revenue collection has also increased. Last year, Rs 3.60 billion was collected in revenue, while this year, it has reached Rs 4.08 billion. Additionally, 1.6 million other telephone sets worth Rs 1.52 billion were imported in the same period, generating Rs 283.8 million in revenue.

Reduced Power Imports from India Strain Kulekhani Hydropower Reservoir:

Nepal’s Kulekhani hydropower reservoir is under pressure as electricity imports from India have been limited to 12 hours daily. To meet demand, all three Kulekhani projects are operating round-the-clock, causing the water level to drop by an average of 36 cm daily. Since the dry season began, the reservoir level has already decreased by 6.18 meters. If it drops to 1,483 meters, power generation will cease, raising concerns over energy sustainability.

National Water Conference Focuses on Sustainable Resource Management:

Minister for Energy, Water Resources, and Irrigation, Dipak Khadka, emphasized the critical role of water resources in daily life and national prosperity at the first National Water Conference 2081 BS. Organized by the Water and Energy Commission Secretariat, the two-day event focuses on preserving glaciers, integrated water management, governance, transnational cooperation, and climate change. Khadka urged collective efforts to protect and efficiently utilize Nepal’s water resources.

Real Estate Entrepreneurs to Launch Investment Company Amid Economic Crisis:

Struggling with Nepal’s prolonged economic downturn, real estate entrepreneurs have decided to establish an investment company with their own funds. The company, funded through small contributions from developers nationwide, aims to reduce reliance on bank loans. Announced at the Rupandehi Real Estate Association’s convention, the initiative seeks to revive the post-pandemic market. Leaders argue that excessive government regulations have worsened the sector’s crisis and demand real estate be recognized as an industry.

Gold Imports Surge After Tariff Cut, Reaching Over 1,200 kg in Eight Months:

Nepal’s gold imports have surged after the government reduced customs duty from 20% to 10% on December 22, 2023. From July 2023 to mid-March 2024, over 1,223 kg of gold worth NPR 14.77 billion was imported. The highest monthly import was in January 2024, with 402 kg. The government collected NPR 1.61 billion in revenue. Commercial banks are authorized to import up to 20 kg daily, sourcing gold mainly from UAE, Turkey, China, India, and over 20 other countries.

Kaligandaki Corridor Road Nears Completion After 8 Years:

The blacktopping of a 9 km stretch of the Beni-Jomsom-Korala road, part of the national pride Kaligandaki Corridor connecting India and China, has been completed. Delayed by five years due to challenging terrain, COVID-19, floods, and contractor issues, 95% of the road upgrade is now done. Once fully completed, the road will boost trade, tourism, and regional development, significantly reducing travel time and enhancing connectivity in Gandaki Province.

No Lifelong Facilities for Former VIPs, Says Health Minister Paudel:

Minister for Health and Population, Pradip Paudel, has stated that former VIPs should not receive lifelong state facilities, though they deserve respect. Speaking at a Nepali Congress Banke event, he emphasized that medical colleges must follow regulations and warned of scrapping affiliations for institutions failing to pay staff. He also highlighted efforts to adjust medicine prices, enhance domestic production, and expand health insurance coverage to 6.6 million households.

Nepal to Revise Minimum Wage from Next Fiscal Year:

The Department of Labor and Occupational Safety has begun preparations to increase the minimum wage for workers, effective from Shrawan 1, 2082. The current minimum wage is Rs 17,300 per month, including a basic salary of Rs 10,820 and a cost-of-living allowance of Rs 6,480. Despite previous wage hikes, some establishments have yet to implement them. The department plans strict monitoring and enforcement. It also aims to ensure decent labor practices, strengthen internal employment, and combat child labor and forced labor. Employers failing to comply with labor laws will face legal action.

New Finance Bill to Divert Deposits from Banks to Alternative Development Fund:

The government is introducing an Alternative Development Finance Company that will compete with banks for deposits by offering tax exemptions. The proposed bill, drafted by the Ministry of Finance, grants up to NPR 200,000 in tax-free deposits for married couples if held for at least three years. Institutional investors will receive a 50% tax exemption on interest income if they invest 20% of their taxable income in the fund. The Nepal Bankers’ Association warns this could divert deposits from banks, affecting the financial sector.

Binod Chaudhary Urges Political Parties to Address Youth Aspirations:

Industrialist and Nepali Congress leader Binod Chaudhary emphasized the need for political parties and the government to address the aspirations of Nepal’s youth. Speaking at a regional conference in Parasi, Nawalparasi, he highlighted that 8 million youths are abroad, and social media has shaped their expectations. Chaudhary also urged faster completion of the Hulaki Highway and Narayangadh-Butwal road project, criticizing delays. He expressed frustration over the failure to reopen the Bhujhawa customs checkpoint despite discussions with four finance ministers.

Indo-Nepal Trade Fair Showcases Nepali Handicrafts and Herbal Wood Utensils:

At the Indo-Nepal Trade Fair in Dehradun, Ganesh Bohora from Kanchanpur promoted Vijaysal wooden utensils, highlighting their health benefits. He showcased handcrafted cups and glasses, emphasizing their Ayurvedic properties. Despite challenges in sourcing Vijaysal wood, he continues production and reforestation efforts. The fair also features Nepali handicrafts, honey, spices, Dhaka garments, and Thangka paintings. Exhibitors from Nepal see it as a key opportunity to expand their market. However, they call for easier cross-border logistics to boost trade between the two nations.

Khotang Municipality to Gift Bamboo Furniture to Top Nepali Leaders:

Diktel Rupakot Majhuwagadhi Municipality is set to gift bamboo chairs and tables to six top officials, including President Ramchandra Paudel and Prime Minister KP Sharma Oli, to promote local bamboo-based products. Mayor Tirtharaj Bhattarai emphasized the economic potential of bamboo and the need for policy support. The municipality recently held Nepal’s first National Bamboo Conference, aiming to establish Khotang as the ‘Bamboo Capital.’ The event highlighted bamboo’s role in sustainable development, issuing a 35-point “Khotang Declaration” for future initiatives.

Police Race to Trace the Roots of Rs. 251 Million Foreign Currency Haul:

Kushang Lama, alias Fuchhe, was caught with €1,375,150 and $320,850 hidden in a false-bottom compartment of his truck. The origins and ownership of the cash remain a mystery. Lama, a former gold smuggler, has given evasive statements, prompting an intense investigation by police and the Department of Revenue Investigation. Authorities suspect a connection to gold smuggling through the Nepal-China border. Investigators are analyzing call records and meticulously documenting serial numbers of the seized money to uncover its true source and intended recipient.

Dhankuta’s Costly Tourism Infrastructure Goes Unused:

Dhankuta Municipality has invested millions in tourism infrastructure, including caves, waterfalls, view towers, and parks, yet tourist numbers remain disappointingly low. Despite Rs. 10 million spent on Okmalung Cave and its surroundings, locals report no visitors. Similar issues plague Hile Siran’s view tower and Chuliban Park. Experts blame poor planning, lack of publicity, and political shifts for the failure. Assistant Professor Bhesraj Khatri argues excessive spending on artificial structures over natural attractions has contributed to the problem, leaving Dhankuta’s ambitious tourism projects underutilized and neglected.

Defense Minister Pledges to Open Road Inside Gokarna Forest:

Defense Minister Manbir Rai has pledged to help open the road inside Gokarna Forest, currently blocked by walls and barbed wire under Nepal Trust. Gokarneshwar Municipality has long demanded access, arguing it would ease traffic congestion and connect key areas like Gokarneshwar Temple, Dakshindhoka, and Mulpani. Lawmakers and local representatives recently urged Prime Minister KP Sharma Oli to take action, and he also expressed commitment to resolving the issue. The blocked road has also hindered the opening of the Bagmati Corridor in the area.

Nepal to Establish Border Outpost at China Border in Manang:

A Border Outpost (BOP) will be set up at Phu village, Narpabhumi Rural Municipality-4, near the Nepal-China border in Manang. Situated at 4,000 meters above sea level, the BOP aims to strengthen border security, prevent transnational crime, and assist in disaster management. The outpost will house 35 armed police personnel. With no road network, the area remains remote, requiring a two-day trek from Chame.