| Indicators show grim picture of economy | |
RUDRA PANGENI
The mid-term review of fiscal policy unveiled on Monday says economic growth will hover above 5 percent. The budget had targeted economic growth of 6 percent. In the last fiscal year, national economy had grown by 5.2 percent. Trade deficit is widening at an alarming rate, and there has not been expected growth on capital spending. The government is sitting on cash pile of more than Rs 90 million allocated for development spending. The government has managed to spend only 12 percent of the allocated fund so far, according to the report. The mid-term review report says growth rate in industry and service industry is improving, but untimely monsoon and floods have affected agriculture production. Inflation currently stands at 7.3 percent, compared to 10 percent recorded in the last fiscal year. Similarly, revenue collection stands at a little above the target of Rs 185 billion set for the period. "Authorization for spending was issued on the first day of the fiscal year," Minister for Finance Ram Sharan Mahat said, unveiling the report on Monday. "But the tendency to wait for budget approval from the parliament and lack of serious planning and budgeting as well as lack of zeal in designing programs and spending affected developing spending in the first half of the current fiscal year." Mahat, however, said the government was cautiously monitoring budget spending and added that ministries have been told to sign multi-year contract for projects approved by National Planning Commission (NPC). "The finance ministry has clearly stated that such projects will not face any resource crunch," he added. Vice chairman of NPC Govind Raj Pokhrel said ministries were not serious about seeking timely approval of budget programs. "That is why we have introduced a fast-track mode for approval of development programs," he added.  From left, Finance Secretary Suman Prasad Sharma, Minister for Finance Ram Sharan Mahat and National Planning Commission Vice-chairman Govind Raj Pokhrel at the unveiling of the mid-term review of the government’s fiscal policy held at the Ministry of Finance in Singha Durbar, Kathmandu on Monday.(Dipesh Shrestha/Republica) Spending progress of 21 priority projects stands very low except the Pushpalal Rajmarg (Mid-Hills Highway) and Upper Tamakoshi Hydropower projects. Commenting on slow capital spending, Pradip Jung Pandey, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said even the government seems to be in need of investment environment. "Government spending of, say Rs 5, induces investment of R 10 from the private sector," he said. "Rise in revenue collection shows private sector is doing its bit. Demand for bank loans is on the rise and private sector investment in hydropower and other sectors is growing." The mid-term review report, however, estimates that capital spending will increasing in the second half of the fiscal year. It has projected that capital spending will stand at 92 percent (Rs 558 billion) of the allocated Rs 618 billion. Minister Mahat said reducing the alarmingly widening trade deficit, which is expected to reach Rs 700 billion by the end of the current fiscal year, would be a big challenge. Nepal imported goods worth Rs 378.22 billion in the first six months of 2014/15 ending mid-January. Export income in the review period stood at Rs 43.39 billion. After assuming office a year ago, Minister Mahat had told media persons that he would initiate second-tier economic reforms. But on Monday, he did not speak about any such reforms. He simply said half a dozen financial laws, including amendments to Nepal Rastra Bank Bill, Industrial Enterprise Bill, Banking Offence and Punishment Bill, Public Procurement Bill, were in the process of getting cabinet nod. The government had announced plan to enact half a dozen new laws and amend existing laws to give a boost to economy. But no such law has been tabled in the parliament. Minister Mahat, however, boasted of rise in foreign assistance commitments in his term. "The country as received a record high foreign aid commitment of Rs 217 billion in the review period which was only Rs 55 billion in the corresponding period of last fiscal yea”," he added. |
Tuesday, February 24, 2015
Monday, February 16, 2015
Govt told to probe Rs 5 billion in Swiss banks
Rudra Pangeni
Following discussions with the governor of Nepal Rastra Bank and officials of the Department of Money Laundering Investigation (DMLI) and the Ministry of
Rudra Pangeni
KATHMANDU, Feb 16 : Parliament´s Finance Committee on Sunday decided to direct the government to immediately begin investigations into the wealth parked by Nepalis in Swiss banks.
Following discussions with the governor of Nepal Rastra Bank and officials of the Department of Money Laundering Investigation (DMLI) and the Ministry of
Finance on Sunday, the committee concluded that cash amounting to Rs 5 billion is parked in HSBC bank in Switzerland and this should be be investigated.
Following revelations by the International Consortium of Investigative Journalists (ICIJ) on Feb. 9 that some eight Nepalis have parked money in banks in Switzerland, NRB and DMLI have shown interest in investigating the matter.
But officials say that collecting information about the bank accounts of such people and assessing the source of the money is no cakewalk. Nepal has not signed any mutual legal assistance agreement, which is vital for exchanging such information at a bilateral level.
The parliamentary committee has now directed the government to initiate the signing of such an agreement with Switzerland.
Following revelations by the International Consortium of Investigative Journalists (ICIJ) on Feb. 9 that some eight Nepalis have parked money in banks in Switzerland, NRB and DMLI have shown interest in investigating the matter.
But officials say that collecting information about the bank accounts of such people and assessing the source of the money is no cakewalk. Nepal has not signed any mutual legal assistance agreement, which is vital for exchanging such information at a bilateral level.
The parliamentary committee has now directed the government to initiate the signing of such an agreement with Switzerland.
Following the endorsement by parliament of the anti-money laundering act last year, a plan extending to 2017 has been devised, with division of work among various government institutions. The task of assessing countries for signing such an agreement and making needful preparations goes to the Ministry of Foreign Affairs.
Talking to Republica, Director General of DMLI, Kebal Prasad Bhandari, said that at present they can only seek information on the basis of mutual understanding. “The money stashed away can be repatriated through a lengthy process if it is found to have been acquired through any illegal process,” said Bhandari, adding that the authorities first need to acquire the account information and carry out investigations before a case can be filed at court.
Talking to Republica, Director General of DMLI, Kebal Prasad Bhandari, said that at present they can only seek information on the basis of mutual understanding. “The money stashed away can be repatriated through a lengthy process if it is found to have been acquired through any illegal process,” said Bhandari, adding that the authorities first need to acquire the account information and carry out investigations before a case can be filed at court.
Nepal Rastra Bank Governor Yuvaraj Khatiwada (second from right) answers to the parliamentary Finance Committee at Singha Durbar on Sunday about the Rs 5.4 billion deposited by Nepali citizens in HSBC bank.(Dipesh Shrestha/Republica)
“Nepal can claim the money in those bank accounts only with a court order,” added Bhandari.
A Nepali can open a bank account in a foreign country only with permission from Nepal Rastra Bank, and on valid grounds. NRB Governor Yuvaraj Khatiwada informed the parliamentary committee that they have checked the list of names given permission to open accounts in foreign countries and the names of the eight are not found in the list.
Governor Khatiwada and DG Bhandari said that the information on money stashed away abroad has drawn their attention. “We only know that countries like Switzerland, Cyprus, the British Virgin Islands, Mauritius and even Singapore and Hong Hong, which have less strict laws, are havens for such money,” added Khatiwada.
The committee, in its decision, also directed the government to counter any trend of stashing money in foreign banks and to make arrangements for utilizing it in developmental work.
In 2012, upon a request by the Nepal Trust for information about Swiss bank accounts of members of the royal family, the Swiss government had responded that there was no account in any Swiss bank in the name of royalty from Nepal.
Billions from Vingin Islands under question
KATHMANDU, Feb 16: Governor of Nepal Rastra Bank Yuvaraj Khatiwada has clearly indicated that Rs 3.5 billion from the British Virgin Islands now deposited in different banks is under question. Speaking at the Finance Committee of parliament, Khatiwada said, "I would not name them, but the money was received in some banks as loan investment from the Virgin Islands and the loan receiver has no registration of a company or industry."
Expressing surprise at investors sending their money even without any name of the company or the business they are to engage in, Governor Khatiwada said that foreign investment should not simply be taken for granted in the name of foreign investment.
"The country has to manage the foreign currency to return interest on the investment, putting pressure on foreign currency reserves," added Khatiwada, indicating that the source of investment would be entertained only for long term investment and only in the priority sectors like hydropower and infrastructure, and under due legal process. Foreign loan investment or direct investment can be brought in either with approval from the Department of Industry and the Industrial Promotion Board, an authority headed by the industry minister, or through the Investment Board Nepal (IBN).
Foreign investment from the Virgin Islands has increased significantly, making the islands the fifth highest source of such investment for Nepal last year. The committee has also directed the Ministry of Industry to inform the committee about details of the foreign investors, as well as drawing the attention of IBN to bring in only investment that is in the country´s interest. - Republica See more at: http://myrepublica.com/portal/index.php?action=news_details&news_id=92271#sthash.DtZzoLO7.dpuf -
“Nepal can claim the money in those bank accounts only with a court order,” added Bhandari.
A Nepali can open a bank account in a foreign country only with permission from Nepal Rastra Bank, and on valid grounds. NRB Governor Yuvaraj Khatiwada informed the parliamentary committee that they have checked the list of names given permission to open accounts in foreign countries and the names of the eight are not found in the list.
Governor Khatiwada and DG Bhandari said that the information on money stashed away abroad has drawn their attention. “We only know that countries like Switzerland, Cyprus, the British Virgin Islands, Mauritius and even Singapore and Hong Hong, which have less strict laws, are havens for such money,” added Khatiwada.
The committee, in its decision, also directed the government to counter any trend of stashing money in foreign banks and to make arrangements for utilizing it in developmental work.
In 2012, upon a request by the Nepal Trust for information about Swiss bank accounts of members of the royal family, the Swiss government had responded that there was no account in any Swiss bank in the name of royalty from Nepal.
Billions from Vingin Islands under question
KATHMANDU, Feb 16: Governor of Nepal Rastra Bank Yuvaraj Khatiwada has clearly indicated that Rs 3.5 billion from the British Virgin Islands now deposited in different banks is under question. Speaking at the Finance Committee of parliament, Khatiwada said, "I would not name them, but the money was received in some banks as loan investment from the Virgin Islands and the loan receiver has no registration of a company or industry."
Expressing surprise at investors sending their money even without any name of the company or the business they are to engage in, Governor Khatiwada said that foreign investment should not simply be taken for granted in the name of foreign investment.
"The country has to manage the foreign currency to return interest on the investment, putting pressure on foreign currency reserves," added Khatiwada, indicating that the source of investment would be entertained only for long term investment and only in the priority sectors like hydropower and infrastructure, and under due legal process. Foreign loan investment or direct investment can be brought in either with approval from the Department of Industry and the Industrial Promotion Board, an authority headed by the industry minister, or through the Investment Board Nepal (IBN).
Foreign investment from the Virgin Islands has increased significantly, making the islands the fifth highest source of such investment for Nepal last year. The committee has also directed the Ministry of Industry to inform the committee about details of the foreign investors, as well as drawing the attention of IBN to bring in only investment that is in the country´s interest. - Republica See more at: http://myrepublica.com/portal/index.php?action=news_details&news_id=92271#sthash.DtZzoLO7.dpuf -
Thursday, February 12, 2015
| Commission formed to settle tax-related cases | |
RUDRA PANGENI
Mahat was also the member of Tax Settlement Commission that the government had formed in 2007. According to Ministry of Finance (MoF) officials, Director General of Inland Revenue Department (IRD) Chudamani Sharma and former director of Office of the Auditor General Umesh Dhakal are the members in the commission. The commission will serve till mid-July. But its term can be extended if needed. MoF officials say the commission has been mandated to assess and recover outstanding taxes and settle tax-related disputes filed till mid-April, 2013. The commission has been formed after a gap of seven years. Private sector has been demanding that the government form the commission to resolve problems of genuine taxpayers. According to Tax Settlement Commission Act 1976, the commission will assess and recover the due and outstanding taxes to be assessed and recovered pursuant to the Nepal laws in force in order to maintain the convenience and economic interests of the general public. It´s office will be set up at Inland Revenue Department. But it will not be allowed to look into fake VAT bill scam. Officials say unsettled tax-related cases are worth around Rs 40 billion. With the increasing number of applicants for administrative review at IRD and appeals at Revenue Tribunal, dispute settlement process is taking lot of time. In many cases, applicants are not in capacity to post deposits for legal remedy in courts. The commission will be of great help to such applicants. According to the law, the commission can even withdraw sub judice cases from IRD and tribunal and assess the problem and can settle the disputes. The commission will settle cases on a fast track mode if it finds applicants are genuinely unable to pay taxes as per the law. MoF officials say that the commission will also settle disputes arising from tax collection administered by tax officials as per tenets of laws irrespective of the taxpayer´s ability to pay tax. The government has so far formed six temporary commissions. Such alternative dispute resolution mechanisms, however, are set up as permanent bodies in the foreign countries. Talking to Republica, Pradeep Jung Pandey, president of Federation of Nepalese Chambers of Commerce, recently had said that the commission can assess tax related issues of an estimated 12,000 businesspeople and businesses. |
| Commission formed to settle tax-related cases | |
RUDRA PANGENI
Mahat was also the member of Tax Settlement Commission that the government had formed in 2007. According to Ministry of Finance (MoF) officials, Director General of Inland Revenue Department (IRD) Chudamani Sharma and former director of Office of the Auditor General Umesh Dhakal are the members in the commission. The commission will serve till mid-July. But its term can be extended if needed. MoF officials say the commission has been mandated to assess and recover outstanding taxes and settle tax-related disputes filed till mid-April, 2013. The commission has been formed after a gap of seven years. Private sector has been demanding that the government form the commission to resolve problems of genuine taxpayers. According to Tax Settlement Commission Act 1976, the commission will assess and recover the due and outstanding taxes to be assessed and recovered pursuant to the Nepal laws in force in order to maintain the convenience and economic interests of the general public. It´s office will be set up at Inland Revenue Department. But it will not be allowed to look into fake VAT bill scam. Officials say unsettled tax-related cases are worth around Rs 40 billion. With the increasing number of applicants for administrative review at IRD and appeals at Revenue Tribunal, dispute settlement process is taking lot of time. In many cases, applicants are not in capacity to post deposits for legal remedy in courts. The commission will be of great help to such applicants. According to the law, the commission can even withdraw sub judice cases from IRD and tribunal and assess the problem and can settle the disputes. The commission will settle cases on a fast track mode if it finds applicants are genuinely unable to pay taxes as per the law. MoF officials say that the commission will also settle disputes arising from tax collection administered by tax officials as per tenets of laws irrespective of the taxpayer´s ability to pay tax. The government has so far formed six temporary commissions. Such alternative dispute resolution mechanisms, however, are set up as permanent bodies in the foreign countries. Talking to Republica, Pradeep Jung Pandey, president of Federation of Nepalese Chambers of Commerce, recently had said that the commission can assess tax related issues of an estimated 12,000 businesspeople and businesses. |
Wednesday, January 28, 2015
Nepali app developers see prospects, face several constraints -
RUdra Pangeni
App developers in Nepal are seeing great prospects in recent years thanks to proliferation of smart devices and increasing penetration of Internet.
“We have seen huge potentials. The rise in number of smart phones is encouraging us,” Subash Sapkota, CEO of bidhee, said.
Apps developed by bidhee, including Hamro Patro, Hamro Keyboard and Nepali English Dictionary, have more than 2 million users.
“We can reap more benefits by targeting global population,” added Sapkota.
Number of smartphone users is growing with every passing year. Conservative estimates show around 15-18 percent of the country’s total population use smart devices. Internet penetration currently stands at 37 percent of total population.
Deepak Adhikari, a telecommunications engineer, has been using a number of Nepali apps in his smartphone. These apps help him to know about load-shedding hours, share prices and other recent happenings from around the world.
To cater to users like Adhikari, most of the banks, media houses, and telecommunication services have introduced their mobile apps in different platform. These apps have received positive response from users. Many have also started promoting themselves through social media like Facebook.
The major revenue of app developers is advertising revenue from firms like Google. Their revenue depends on number of users and user engagements. But as the market size is small, app developers are struggling to get more revenue.
Of late, many developers are targeting the global market by developing apps with global appeal. According to bidhee, around 70 percent of users of Hamro Patro are Nepalis living in friend land. This shows that some Nepali app developers are already looking into the global market.
“Many Nepali firms are adopting traditional models to advertise their products and services,” Sapkota said, adding, “Digital advertisement platform provides them an opportunity to tap niche market with defined age group, professions and other population composition. It ensures their reach to the targeted groups.”
Adhikari feels Nepali firms are yet to realize value of proper marketing through research. “Many firms are starting businesses without proper planning. These firms do not know the benefits that effective advertising brings,” he added.
Google and other advertising networks pay apps on the basis of active users using the app. Google pays 55 percent of the advertising revenue generated by the app to the developers. App developers receive payments from money transfer firms like Western Union. Had there been electronic payment system, they would have received the amount directly in their bank accounts.
Biswas Dhakal, CEO of F1soft International, said Asia alone earns 41 percent of revenue from global app business. This shows there is a huge opportunity for Nepali people, he added.
PROBLEMS
App developers have their own problems to share. In the absence of effective payment gateway, they have to use their contacts residing in foreign countries to pay fee to upload their apps in stores like Google Play store and App Store.
Similarly, lack of digital awareness as well as increasing load-shedding hours is another problem being faced by app developers.
“Local app developers have to ask their relatives to pay the fee while opening account in Google Play and App Store. Because of difficulties like these, many developers are migrating to foreign countries looking for better opportunities,” added Sapkota.
GOVERNMENT LOSING REVENUE
App developers say annual turnover of Nepali apps, including digital advertisement network and different outsourced project from around the, world is estimated at more than Rs 10 million. Though some apps are being sold at good price, such transactions have yet to bring under tax net. But the government is not doing anything to plug such loopholes.
“If the government puts in place an electronic payment gateway, Nepali information technology (IT) sector can go global. App developers can develop paid apps and upload them into Google Play and App Store,” Sapkota said, adding: “Many developers are focusing on free apps because of the lack of payment gateway.”
He also said this will also help bring all such transactions under tax net.
WHAT NEXT?
Experts have emphasized the need to develop quality that can provide an array of services to users as well as.
“One should firs know about their target users, their advertisement base and engagement tools,” Dhakal said.
Visiting Tommy Karl Palm, the man behind the popular gaming app Candy Crush Saga, during his recent Nepal visit had said that the most important thing an app developer should do is to identify their target audience. “After developing app, one should test app on the target audience and see how they react. Also, the developer should not forget that the app should always be unique,” he had said.
Integrating apps with social media is one of the ways to make apps more effective. “Not all apps can be paid app. They should be made for higher engagement of users,” Dhakal said.
Dhakal’s firm has introduced ‘Cash On Ad’, targeting mobile phone users. But they couldn’t get advertisement as per their expectations. “Many Nepali business firms are not aware of the value of digital marketing and advertising apps like Cash On Ad,” he added.
from Republica
- See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=91127#sthash.Ykklvjnr.dpuf
RUdra Pangeni
App developers in Nepal are seeing great prospects in recent years thanks to proliferation of smart devices and increasing penetration of Internet.
“We have seen huge potentials. The rise in number of smart phones is encouraging us,” Subash Sapkota, CEO of bidhee, said.
Apps developed by bidhee, including Hamro Patro, Hamro Keyboard and Nepali English Dictionary, have more than 2 million users.
“We can reap more benefits by targeting global population,” added Sapkota.
Number of smartphone users is growing with every passing year. Conservative estimates show around 15-18 percent of the country’s total population use smart devices. Internet penetration currently stands at 37 percent of total population.
Deepak Adhikari, a telecommunications engineer, has been using a number of Nepali apps in his smartphone. These apps help him to know about load-shedding hours, share prices and other recent happenings from around the world.
To cater to users like Adhikari, most of the banks, media houses, and telecommunication services have introduced their mobile apps in different platform. These apps have received positive response from users. Many have also started promoting themselves through social media like Facebook.
The major revenue of app developers is advertising revenue from firms like Google. Their revenue depends on number of users and user engagements. But as the market size is small, app developers are struggling to get more revenue.
Of late, many developers are targeting the global market by developing apps with global appeal. According to bidhee, around 70 percent of users of Hamro Patro are Nepalis living in friend land. This shows that some Nepali app developers are already looking into the global market.
“Many Nepali firms are adopting traditional models to advertise their products and services,” Sapkota said, adding, “Digital advertisement platform provides them an opportunity to tap niche market with defined age group, professions and other population composition. It ensures their reach to the targeted groups.”
Adhikari feels Nepali firms are yet to realize value of proper marketing through research. “Many firms are starting businesses without proper planning. These firms do not know the benefits that effective advertising brings,” he added.
Google and other advertising networks pay apps on the basis of active users using the app. Google pays 55 percent of the advertising revenue generated by the app to the developers. App developers receive payments from money transfer firms like Western Union. Had there been electronic payment system, they would have received the amount directly in their bank accounts.
Biswas Dhakal, CEO of F1soft International, said Asia alone earns 41 percent of revenue from global app business. This shows there is a huge opportunity for Nepali people, he added.
PROBLEMS
App developers have their own problems to share. In the absence of effective payment gateway, they have to use their contacts residing in foreign countries to pay fee to upload their apps in stores like Google Play store and App Store.
Similarly, lack of digital awareness as well as increasing load-shedding hours is another problem being faced by app developers.
“Local app developers have to ask their relatives to pay the fee while opening account in Google Play and App Store. Because of difficulties like these, many developers are migrating to foreign countries looking for better opportunities,” added Sapkota.
GOVERNMENT LOSING REVENUE
App developers say annual turnover of Nepali apps, including digital advertisement network and different outsourced project from around the, world is estimated at more than Rs 10 million. Though some apps are being sold at good price, such transactions have yet to bring under tax net. But the government is not doing anything to plug such loopholes.
“If the government puts in place an electronic payment gateway, Nepali information technology (IT) sector can go global. App developers can develop paid apps and upload them into Google Play and App Store,” Sapkota said, adding: “Many developers are focusing on free apps because of the lack of payment gateway.”
He also said this will also help bring all such transactions under tax net.
WHAT NEXT?
Experts have emphasized the need to develop quality that can provide an array of services to users as well as.
“One should firs know about their target users, their advertisement base and engagement tools,” Dhakal said.
Visiting Tommy Karl Palm, the man behind the popular gaming app Candy Crush Saga, during his recent Nepal visit had said that the most important thing an app developer should do is to identify their target audience. “After developing app, one should test app on the target audience and see how they react. Also, the developer should not forget that the app should always be unique,” he had said.
Integrating apps with social media is one of the ways to make apps more effective. “Not all apps can be paid app. They should be made for higher engagement of users,” Dhakal said.
Dhakal’s firm has introduced ‘Cash On Ad’, targeting mobile phone users. But they couldn’t get advertisement as per their expectations. “Many Nepali business firms are not aware of the value of digital marketing and advertising apps like Cash On Ad,” he added.
from Republica
Tuesday, January 13, 2015
Public offices to be allowed to pay up to 15% more for local goods - See more at:
KATHMANDU, Jan 13: The Ministry of Industry (MoI) has revised ´Directive to Increase Consumption of Domestic Goods in Public Offices 2013´, incorporating a number of provisions to make it more workable.
The revised directives, which has recently been sent to the Ministry of Finance and Ministry of Home Affairs for consent, includes a provision which allows public offices to buy Nepali products even if they are dearer than imported products by up to 15 percent.
Similarly, such Nepali product, which does not have Nepal Standard (NS) certification, can get certification from a district level subcommittee, led by the Chief District Officer.
Earlier, the directive barred public offices from buying Nepali goods sans NS certification.
As per the revised directives, the subcommittee is responsible for implementation and monitoring of the use of domestic products in public offices.
The government had introduced the provision of allowing public offices to buy Nepali products even if they are 15 percent expensive than the imported ones two years ago to protect local industries. But the provision failed to meet its objectives as it was not practicable.
Products made using domestic materials or products made using imported raw materials but with value addition of a minimum of 30 percent are defined as domestic products.
Bishnu Prasad Dhakal, assistant spokesperson of MoI, said they have tried to make the directive more practical by incorporating number of provisions as per the suggestions from the local level. "We have added garments, woolen products, medicines, meat products, construction materials, electrical appliances, furniture, decorative items, pashmina, and Dhaka, among others, in the list of products that public offices should buy from domestic producers even if they are expensive than imported ones," he added.
The subcommittee led by CDO can also draw the attention of the office if the government officials are found buying imported products by rejecting domestic products.
This file photo shows a boy collecting ‘Nepali paper’ after it has dried in the sun at Sundarijal.(Bijay Rai/Republica Files)
The government will also award public offices based on consumption of domestic products, and local producers on the basis of supply made to public offices.
In the budget for fiscal year 2014/15, Finance Minister Ram Sharan Mahat had announced to allow public offices to spend up to 15 percent to procure domestic products.“
"Government itself is a big consumer. It can give a boost to industrial sector and also can contribute to national econo”y," Yam Kumari Khatiwada, joint secretary of Ministry of Industry, said.
The contribution of industrial sector in total GDP has been falling in recent years.
MoI plans to send the revised directives to the cabinet for endorsement after getting consent from the two ministries.
Existing Public Procurement Act allows government offices to spend up to 10 percent more for locally produced goods. But the provision has remained in paper so far. - See more at: http://myrepublica.com/portal/index.php/twb/twb/news_rss.php?action=news_details&news_id=90278#sthash.T6UyvY18.dpuf
KATHMANDU, Jan 13: The Ministry of Industry (MoI) has revised ´Directive to Increase Consumption of Domestic Goods in Public Offices 2013´, incorporating a number of provisions to make it more workable.
The revised directives, which has recently been sent to the Ministry of Finance and Ministry of Home Affairs for consent, includes a provision which allows public offices to buy Nepali products even if they are dearer than imported products by up to 15 percent.
Similarly, such Nepali product, which does not have Nepal Standard (NS) certification, can get certification from a district level subcommittee, led by the Chief District Officer.
Earlier, the directive barred public offices from buying Nepali goods sans NS certification.
As per the revised directives, the subcommittee is responsible for implementation and monitoring of the use of domestic products in public offices.
The government had introduced the provision of allowing public offices to buy Nepali products even if they are 15 percent expensive than the imported ones two years ago to protect local industries. But the provision failed to meet its objectives as it was not practicable.
Products made using domestic materials or products made using imported raw materials but with value addition of a minimum of 30 percent are defined as domestic products.
Bishnu Prasad Dhakal, assistant spokesperson of MoI, said they have tried to make the directive more practical by incorporating number of provisions as per the suggestions from the local level. "We have added garments, woolen products, medicines, meat products, construction materials, electrical appliances, furniture, decorative items, pashmina, and Dhaka, among others, in the list of products that public offices should buy from domestic producers even if they are expensive than imported ones," he added.
The subcommittee led by CDO can also draw the attention of the office if the government officials are found buying imported products by rejecting domestic products.
This file photo shows a boy collecting ‘Nepali paper’ after it has dried in the sun at Sundarijal.(Bijay Rai/Republica Files)
The government will also award public offices based on consumption of domestic products, and local producers on the basis of supply made to public offices.
In the budget for fiscal year 2014/15, Finance Minister Ram Sharan Mahat had announced to allow public offices to spend up to 15 percent to procure domestic products.“
"Government itself is a big consumer. It can give a boost to industrial sector and also can contribute to national econo”y," Yam Kumari Khatiwada, joint secretary of Ministry of Industry, said.
The contribution of industrial sector in total GDP has been falling in recent years.
MoI plans to send the revised directives to the cabinet for endorsement after getting consent from the two ministries.
Existing Public Procurement Act allows government offices to spend up to 10 percent more for locally produced goods. But the provision has remained in paper so far. - See more at: http://myrepublica.com/portal/index.php/twb/twb/news_rss.php?action=news_details&news_id=90278#sthash.T6UyvY18.dpuf
Friday, October 31, 2014
Procurement act change seeks status quo ante in variation order -
See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=85766#sthash.vh2F6sPK.dpuf
By Rudra Pangeni
KATHMANDU, Oct 31: The authority of government secretaries to approve variation orders in construction contracts was ended by the Public Procurement Act 2007, but now a draft amendment seeks to restore the authority for up to 10 percent. A variation order is issued for payments for construction project work which could not be foreseen during the project design and cost-estimate stage.
The draft amendment says that the provision for restoring the discretionary authority of the secretaries is meant to make variation orders more accountable.
Following implementation of the procurement act in 2007, all variation orders above 15 percent of the total project were decided by the cabinet. However, high-level officials maintain that the variation orders became impractical for the cabinet ministers to handle and several such orders became subject to political pressure.
According to the act, project chiefs and departmental chiefs decide 5 and 10 percent of variation orders respectively.
Secretary at the Ministry of Physical Infrastructure and Transport, Tulasi Sitaula, said that secretaries were stripped of their power variation orders purportedly to exercise greater control over such orders. But several projects have suffered delays because of the need for the decision to be taken by the cabinet.
Former finance secretary Krishna Hari Baskota has welcomed the latest decision as it distributes authority from the cabinet to the line ministries and should result in faster and more practical decision-making.
According to some engineers, however, secretaries who are not from an engineering background may take longer to take their decisions.
But Secretary Situala said that a secretary is not alone in taking the decisions on such important financial issues. He also pointed out that non-technical secretaries are also given charge of ministries of a technical type.
“There is a committee comprising officials from the Comptroller General’s Office as well as experts to help the secretaries decide on such issues,” added Sitaula.
Variation orders are full of anomalies as the contract bidders try to bag projects by hook or by crook and through low bidding. But they are accused of later coming up with artificial needs for expanded work and such demands also get approved, a clear indication of rampant corruption, it is pointed out.
“There are genuine cases to be made for variation orders, such as changing the alignment of a tunnel the need for which could not have been foreseen during the project design stage,” said Baskota. He also accepted that there are big anomalies in variation orders and suggested making the engineers who design the construction projects more responsible.
During a discussion Thursday on the amendment draft prepared by the government, many lawmakers at the parliamentary Finance Committee demanded that unlimited authority should not be given to the bureaucrats over large projects.
Construction contracts at hydropower projects, particularly projects developed by Nepal Electricity Authority, have become a haven of corruption and are riddled with controversy.
The Finance Committee has itself found anomalies in variation order to the tune of Rs 1.09 billion at the Chameliya Hydropower project and the committee’s study file has been forwarded to the Commission for Investigation of Abuse of Authority (CIAA). There are similar anomalies alleged at the Upper Trishuli 3A, Kulekhani Hydropower III and other projects.
Experienced engineers have suggested that the anomalies have become rife in hydropower projects due to the unlimited authority given to the executive bodies at government-run entities and companies, including NEA.
The amendment draft makes no mention of placing a limit on such authority. “In principle, the cabinet should not be sitting on the procurement process but several procurements for the Pokhara Regional International Airport, the Upper Trishuli 3A upgrade project and many others were decided by the cabinet,” Baskota pointed out. - See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=85766#sthash.vh2F6sPK.dpuf
See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=85766#sthash.vh2F6sPK.dpuf
By Rudra Pangeni
KATHMANDU, Oct 31: The authority of government secretaries to approve variation orders in construction contracts was ended by the Public Procurement Act 2007, but now a draft amendment seeks to restore the authority for up to 10 percent. A variation order is issued for payments for construction project work which could not be foreseen during the project design and cost-estimate stage.
The draft amendment says that the provision for restoring the discretionary authority of the secretaries is meant to make variation orders more accountable.
Following implementation of the procurement act in 2007, all variation orders above 15 percent of the total project were decided by the cabinet. However, high-level officials maintain that the variation orders became impractical for the cabinet ministers to handle and several such orders became subject to political pressure.
According to the act, project chiefs and departmental chiefs decide 5 and 10 percent of variation orders respectively.
Secretary at the Ministry of Physical Infrastructure and Transport, Tulasi Sitaula, said that secretaries were stripped of their power variation orders purportedly to exercise greater control over such orders. But several projects have suffered delays because of the need for the decision to be taken by the cabinet.
Former finance secretary Krishna Hari Baskota has welcomed the latest decision as it distributes authority from the cabinet to the line ministries and should result in faster and more practical decision-making.
According to some engineers, however, secretaries who are not from an engineering background may take longer to take their decisions.
But Secretary Situala said that a secretary is not alone in taking the decisions on such important financial issues. He also pointed out that non-technical secretaries are also given charge of ministries of a technical type.
“There is a committee comprising officials from the Comptroller General’s Office as well as experts to help the secretaries decide on such issues,” added Sitaula.
Variation orders are full of anomalies as the contract bidders try to bag projects by hook or by crook and through low bidding. But they are accused of later coming up with artificial needs for expanded work and such demands also get approved, a clear indication of rampant corruption, it is pointed out.
“There are genuine cases to be made for variation orders, such as changing the alignment of a tunnel the need for which could not have been foreseen during the project design stage,” said Baskota. He also accepted that there are big anomalies in variation orders and suggested making the engineers who design the construction projects more responsible.
During a discussion Thursday on the amendment draft prepared by the government, many lawmakers at the parliamentary Finance Committee demanded that unlimited authority should not be given to the bureaucrats over large projects.
Construction contracts at hydropower projects, particularly projects developed by Nepal Electricity Authority, have become a haven of corruption and are riddled with controversy.
The Finance Committee has itself found anomalies in variation order to the tune of Rs 1.09 billion at the Chameliya Hydropower project and the committee’s study file has been forwarded to the Commission for Investigation of Abuse of Authority (CIAA). There are similar anomalies alleged at the Upper Trishuli 3A, Kulekhani Hydropower III and other projects.
Experienced engineers have suggested that the anomalies have become rife in hydropower projects due to the unlimited authority given to the executive bodies at government-run entities and companies, including NEA.
The amendment draft makes no mention of placing a limit on such authority. “In principle, the cabinet should not be sitting on the procurement process but several procurements for the Pokhara Regional International Airport, the Upper Trishuli 3A upgrade project and many others were decided by the cabinet,” Baskota pointed out. - See more at: http://www.myrepublica.com/portal/index.php?action=news_details&news_id=85766#sthash.vh2F6sPK.dpuf
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