Nefport 53 - Data for Good Special

Nepal Factsheet

KEY ECONOMIC INDICATORS

*Preliminary estimate of FY 2022/23 (y-o-y mid-July to mid-July)

**World Bank, Global Economic Prospects January 2023 update

***HDI figure from Human Development Report of the UNDP 2021/22

**** Current Macroeconomic and Financial Situation of Nepal (Based on three months' data ending mid-Janaury 2022/23)

***** Current Macroeconomic and Financial Situation of Nepal (Based on annual data of FY 2021/22)

Issue 53: June 2023

Publisher: Nepal Economic Forum

Website: www.nepaleconomicforum.org

P.O Box 7025, Krishna Galli, Lalitpur – 3 Nepal Phone: +977 1 554-8400

Email: info@nepaleconomicforum.org

Contributors:

Adarsha Subedi

Anisha Dongol

Kaatya Mishra

Karuna Gauchan

Nishtha Rajbhandari

Pooja Suwal

Sagar Jung Karki

Sanjit Tuladhar

Sudiksha Tuladhar

Sukeerti Shreshta

Udita Mulmi

Special Section Authors: Amit Shrestha, CFO, Microsoft Mexico

Prasanna Dhungel, Co-founder and Managing Partner, GrowByData

Design & Layout: Thuprai Solutions support@thuprai.com

Cover Design:

Karuna Gauchan

Coordinator

Sakshee Singh

Editor:

Suyasha Shakya

This issue of Nefport takes into account news updates from 1 March to 30 May 2023 with some sections like ‘Capital Market’ covering news closer to June 2023.

The USD conversion rate for this issue is NPR 131.23 to a dollar, the quarterly average for this issue.

Reproduction is authorized provided the source is acknowledged.

The views and opinions expressed in the article/publication are those of the author(s) and do not necessarily reflect the official opinion of Nepal Economic Forum. Neither the organization nor any person acting on their behalf may be held responsible for the use which may be made of the information contained therein.

Executive Board Members:

Alpa B. Shakya

Chandni Singh

Shayasta Tuladhar

Sudip Bhaju

Sujeev Shakya

Advisory Board:

Arnico Panday

Kul Chandra Gautam

Mahendra Krishna Shrestha

Prativa Pandey

Shraddha Gautam

Sneh Rajbhandari

Senior Distinguished Fellows:

Bibhakar Shakya

Giuseppe Savino

Suman Basnet

Senior Fellows:

Amish Raj Mulmi

Apekshya Shah

Ashraya Dixit

Bibek Raj Kandel

Diva Shrestha

Mark Perrin

Editorial

The second quarter of the year 2023 for Nepal saw a slew of scandals that involved highranking officials. In the “Bhutanese Refugee Scam”, government officials and politicians provided fake identification for Bhutanese refugees to travel and settle in a third country. A former minister as well as many current and retired bureaucrats were arrested and are under trial. In the “Lalita Niwas Scam” that involved fake documentation of a large parcel of land, many sitting and retired government officials were seen to be involved and got arrested. A popular businessperson, well-connected to politicians was also arrested which brought about allegations of finding scapegoats to protect the senior leaders of political parties. It is estimated that this trend would continue and more scams would unfold as the new Rastriya Swatantra Party in Parliament has made combating corruption their key agenda along with questioning many investigations and investigation reports that were released in the past decade.

In terms of the economy, it seemed to be on a recovery path with the ease in liquidity , rise in foreign currency reserve, increase in remittances, and improving balance of payments. Foreign exchange restrictions and imports have been eased. Banks are providing easy credit and interest rates have been relieved. Banks now have the liberty to determine their own interest rates reversing cartel-like behavior. This, along with increased remittances, has pushed real estate transactions and consumption. There has also been positive development in the export of electricity to India and announcements of more Indian investments in the Nepal hydropower sector.

NEF strongly believes in evidence-based policy reforms, for which it is paramount to have the right data with the right access converted into the right set of information. We recently launched NEFData, a one-stop portal to access key economic data of Nepal which would help us integrate better with global platforms. And we continues to work on the digitization and digitalization space through the Center for Digital Transformation. A Neftalk was also held on ‘Digital Services at The Base of The Pyramid’ as part of the ongoing Digital Dialogues series in partnership with World Bank Nepal.

In line with our work in the digital space, this edition of Nefport is on the topic “Data for Good” whereby the guest contributors focus on the growing importance of data, digital transformation and data governance. We would like to acknowledge and thank Prasanna Dhungel (Co-founder and Managing Partner, GrowByData) and Amit Shrestha (CFO, Microsoft Mexico) for their contributions. We would also like to thank the voluntary contributions from many individuals as well as our readers and patrons who have supported and engaged with us throughout our journey.

We are working continuously on recalibrating our Nefports to make them more useful to our readers. Please feel free to write to us at info@nepaleconomicforum.org for any further comments or feedback.

Sujeev Shakya Chair, Nepal Economic Forum

General Overview

Political Overview

In the review period, Nepal witnessed many political changes and activities. This included results of the by-elections in Chitwan-2, Bara-1 and Tanahun-2, along with election of the Vice President of Nepal as well as changes in the cabinet. The results of the by-elections reflected how people are seeking change by voting for new parties and leaders. The budget for the fiscal year 2023/24 AD (2080/81 BS) was also passed wherein the total budget stood at NPR 1.75 trillion (USD 1.3 billion). Furthermore, this period witnessed political turmoil through the Bhutanese Refugee scam and the removal of a member of Parliament, Dhaka Kumar Shrestha, on accusations of bribing. Additionally, this period witnessed Prime Minister Pushpa Kamal Dahal’s visit to India, where a 10,000 MW electricity deal was signed among other agreements.

EXECUTIVE UPDATES

Citizenship Bill Approved by President Poudel

On May 31, 2023, President Ram Chandra Poudel approved the citizenship bill after many hurdles.6 The bill gives way to many people waiting to get Nepali citizenship. This includes foreign women getting married to Nepali men; children born from Nepali mothers but with no identified father; minors within the boundary of Nepal without their parents’ address;

as well as Non-Resident Nepalis.7 Previously, the bill was rejected twice by ex-President Bidya Devi Bhandari. The former President returned the bill with a 15-point consideration for review in August last year. Additionally, on June 4, the Supreme Court of Nepal put an interim order barring the implementation of the bill on the basis of a writ case filed by senior lawyers Dr. Surendra Bhandari and Balkrishna Neupane.8 However, on 22nd June, this was upturned as the Supreme Court put a halt to the interim order, allowing the new bill to be implemented.9

On May 31st , Prime Minister Pushpa Kamal Dahal expanded his cabinet, adding a total of four ministers – all from the Nepali Congress. The ministers who took oath were Purna Bahadur Khadka as Deputy Prime Minister,

Prime Minister Dahal Expands Cabinet

Prakash Sharan Mahat as Finance Minister, Ramesh Rijal as Minister of Industry, Commerce and Supplies and Sita Gurung as Minister for Urban Development.10

Additionally, Narayan Kaji Shrestha, a senior Maoist leader, had his position changed from the Minister of Physical Infrastructure and Transport to the Minister of Home Affairs. The position of the Minister of Home Affairs was vacant after Rastriya Swatantra Party’s President Rabi Lamichhane was removed from the seat on grounds of problems with his citizenship. While this was a long overdue expansion, there

was considerable dissatisfaction with Prime Minister Dahal’s ministerial appointments among the coalition parties.

Federal Budget Unveiled

In this review period, the Government of Nepal unveiled the budget for the fiscal year 2023/24 AD (2080/81 BS). The total budget stands at NPR 1.75 trillion (USD 1.3 billion). While a revenue of NPR 1248.62 billion (USD 9.52 billion) is predicted to be raised, NPR 1141.78 billion (USD 8.70 billion) is expected to be spent on recurrent

expenditures.11 Additionally, NPR 302.07 billion (USD 2.30 billion) and NPR 307.45 billion (USD 2.34 billion) is presumed to be the total capital expenditure and total financing expenditure respectively. The targeted growth rate is 6% whereas the inflation rate is targeted to stand at 6.5%. Moreover, certain amounts of the budget were separated for foreign grants, foreign loans and internal loans. A total of NPR 49 billion (USD 373 million), NPR 212 billion (USD 1.61 million) and NPR 240 billion (USD 1.82 million) was allocated for the aforementioned areas respectively.12

LEGISLATIVE UPDATES

Calls to Revise Transitional Justice Bill

A bill was presented in the House of Representatives to amend the Enforced Disappearances Enquiry, Truth and Reconciliation Commission Act on March 19.14 The act, which was formed in 2014, has some discrepancies

that calls for changes; one of which is that the bill categorizes murder as a serious human rights violation, which can qualify for amnesty. Minister for Information and Technology Rekha Sharma presented the bill for revision in the parliament. Previously, the Supreme Court had asked to revise the bill in 2015, but continuing governments presented the bill with little to no changes being made. While

Minister Sharma said the bill will be put on fast track to be endorsed, opposition parties have called for other changes to be made before it is endorsed.15

Lawmaker Dhaka Kumar Shrestha Removed from Parliament and RSP

Lawmaker Dhaka Kumar Shrestha has been removed from the House of Representatives, post

Source: The Kathmandu Post13

Figure 2. Distribution of Federal Budget for FY 2023/24 AD (2080/81 BS)

Revenue Recurrent Capital Financing

being expelled from his party, the Rastriya Swatantra Party (RSP).16 Shrestha was accused of asking for a bribe of NPR 20 million (USD 152,000) from media entrepreneur Durga Prasain in favor of making him the Health Minister. This was revealed through a leaked audio tape, which he claims is tampered.17 After his removal, RSP proposed that Bindabasini Kansakar should replace him as he was elected to the lower house through the proportional representation system. However, Justice Til Prasad Shrestha gave a decision in favor of Shrestha on May 8, barring Kansakar to take up the position.18 Nevertheless, in further developments, the Supreme Court on May 24, 2023 gave the decision by which she could replace Shrestha.19

JUDICIAL UPDATES

Leader of Nagarik Unmukti Party Back in Prison

Resham Lal Chaudhary, the leader of the Nagarik Unmukti Party, was pardoned by President Ram Chandra Poudel and released on the occasion of Republic Day on May 29 along with 482 other prisoners. He was serving time in the Dillibazar prison in connection to the Tikapur incident whereby he was accused of stirring up the masses and causing massive unrest during the Tharuhat movement in 2015. Due to his involvement, he was sentenced to life imprisonment by the Kailali District Court on March 6, 2020 before being pardoned.20 However, recently, the Supreme Court, upturned the President’s pardon and affirmed the decision of the lower court.21

Thus, Chaudhary will now be serving his full sentence. A bench of judges Anand Mohan Bhattarai and Nahkul Subedi upheld the verdict in the case.

Fake Bhutanese Refugee Scam Gets 16 Arrested

The fake Bhutanese refugee scam was unveiled when some of the victims came in contact with Nepal Police, and complained against a network of people, that included high level officials.22 Under the scam, victims were told that they would be sent to developed countries by posing as Bhutanese refugees if they paid a large sum of money. The perpetrators reportedly charged a sum of NPR 288.17 million (USD 2.19 million) from 115 victims. The amount collected from each victim ranged from NPR 200,000 (USD 1524) to NPR 4.8 million (USD 36,577).23 A total of 16 out of the 30 individuals linked with the case have been arrested, which included CPN(UML) leader Top Bahadur Rayamajhi and Nepali Congress leader Bal Krishna Khand.24 Rayamajhi has been suspended by his party after his name has been linked with the scam.25 The investigative report of the case was submitted to the District Office of the Attorney in Kathmandu on May 22.26

ELECTION UPDATES

Ram Sahay Prasad Yadav

Elected as Vice President

Ram Sahay Prasad Yadav from the Janata Samajbadi Party was elected as the Nepal’s Vice President on 17th March 2023. He secured 30,328 votes with the support of majority constituents

of the 10-party ruling alliance from 184 federal and 329 provincial lawmakers, weighing 58.02% of the total votes, thereby beating CPN(UML)’s nominee Asta Laxmi Shakya and Janamat Party’s nominee Mamata Jha.27 The parties who abstained from voting were the Rastriya Prajatantra Party (RPP) and the Nepal Majdoor Kisan Party, who skipped the presidential elections as well. The parties that primarily supported Sahay were Nepali Congress, Nagarik Unmukti Party, Loktantrik Samajbadi Party, and the Janamat Party.28

By-Elections’ Results

Announced

On April 23, 2023, due to the vacancy of various seats in the House of Representatives (HoR), by-elections were held in Chitwan-02, Tanahun-01, and Bara-02. Two seats were vacant as lawmakers Ram Chandra Poudel and Ram Sahay Prasad Yadav were elected as the country’s President and Vice President respectively. The third seat of Chitwan-02 was vacant as Rabi Lamichhane, the chair of the Rastriya Swatantra Party (RSP), lost his lawmaker status owing to legal flaws in his citizenship certificate. However, even in the by-election, after Lamichhane reacquired the Nepali citizenship, he won with 54,176 votes.29 In Tanahun-01, Swarnim Wagle from the Rastriya Swatantra Party, popularly known for his work as an economist, was elected with 34,919 votes in comparison to the 20,122 votes for Nepali Congress’s candidate Govinda Bhattarai.30 In the case of Bara-2, Upendra Yadav from the Janata Samajwadi Party won

with 28,415 votes as opposed to Shiva Chandra Khushwaha from the Janamat Party, who secured 23,334 votes.31

BILATERAL AND MULTILATERAL UPDATES

Bilateral Relation Commitments

Renewed with Prime Minister Dahal’s visit to India

Prime Minister Pushpa Kamal Dahal visited India from 31st May to 3rd June on the invite of his Indian counterpart Prime Minister Narendra Modi.32 PM Dahal made an extensive review of the progress with the Indian PM and renewed commitments to make bilateral relations and cooperation stronger. The major areas of discussion in the meeting were trade and investment, hydropower growth, irrigation, agriculture, travel connectivity, petrol pipeline expansion, Integrated Check Post (ICP) constructions, and cultural networks. In the meeting, PM Modi positively responded to the approval of the 1200 megawatt power import from Nepal as well as for the 456 MW Upper Tamakoshi project.33

For the upcoming ten years, in the case of the power trade, India is going to import 10,000 MW of power from Nepal. According to this goal, both countries signed and exchanged an agreement for the project development of the 669 MW Lower Arun Hydropower project and the MOU of the 480 MW Phukot Karnali project. The initiation of projects like Kurtha-Bijalpura railway, ICPs at Bhairahawa and phase two

of the Motihari-Amlekhgunj pipeline was also completed. The agreement of the advancement of the Pancheswar Multi-purpose Project concluding DPR in 3 months was also done, and the modalities of implementation are to be concluded within a year. Additionally, both parties jointly flagged off the cargo rail service between Biratnagar and Bathnaha and the passenger rail service between Jayanagar to Kurtha, which has been extended to Bijalpura.34 Both parties also signed an MOU to facilitate collaboration between the Institute of Foreign Affairs of Nepal and the Sushma Swaraj Institute of Foreign Service of India and to facilitate crossborder digital payments between the two countries.35

Nepal Consultation Meeting with China for Secretary-Level Border and Trade Talks

The head of the North East Asia Division at the Ministry of Foreign Affairs of Nepal, Mr. Lok Bahadur Thapa and Director General of the Department of Border and Ocean Affairs of the Ministry of Foreign Affairs of China, H.E. Mr. Hong Liang along with other senior officials met for a consultation meeting held from March 29-30. Boundary and border management between the countries was the main concern being discussed. Within this meeting, both parties agreed to resume two-way trade through the Rasuwagadhi-Kerung border port from April 1, following the COVID-19 pandemic prevention and control mechanism. Further, both parties also decided to open the Hilsa-Purang border port for the transport of goods

and construction materials from China which will lead to supporting livelihoods in the northern Himalayan region of Nepal.36 Two-way trade from Tatopani or Zhangmu and people movement from Yari/Pulang was also said to resume from May 1, 2023. Moreover, upon the request of Nepal, China agreed to set up a multi-functional lab at the Nepal-China border to help Nepal export smoothly, and construct the trans-border special economic zone to support the technical and financial part of building infrastructure for Nepal at the Nechung-Lizi border port. Secretary Marasini also focused on the need for Kathmandu-Lhasa direct flights and requested China to resume them soon.37

Nepal to Receive Investments from Britain under BII and BIP Mechanisms

The sixth meeting of the NepalUnited Kingdom Bilateral Consultation Mechanism (BCM) was held in London on 28th April 2023 between Foreign Secretary Bharat Raj Paudyal and the Permanent Under-Secretary at the Foreign and Commonwealth Development Office (FCDO), Sir Philip Barton. In the meeting, Nepal sought support from Britain under two windows - British International Investment (BII) and British Investments Partnership (BIP). According to the statement by the Nepali embassy in London, discussions to utilize the BII for different sectors, from renewable energy, information, and communication, was held between the two sides, along with the possibility to channel further resources under BIP. Both

parties agreed to consolidate and widen cooperation and engagements in productive areas like trade and investment, energy, and tourism, where the importance of investment in Nepal’s clean energy was also discussed. Marking the centenary of the Friendship Treaty, the British officials further shared priority areas of future cooperation with Nepal which included providing support in the transition to a middle-income country and support to expand access to girls’ education.38 Both sides also discussed the issue of addressing grievances of the Nepali UN peacekeeping troops in Britain.

PROVINCIAL UPDATES

New Provincial Governments Appointed

With changes in the power game at the center, the governments at the provincial level also faced many changes in this review period. Among these, the primary one was that CPN(UML) pulled out of the government from Sudurpaschim, Madhesh, Bagmati, and Karnali.39 Moreover, various ministerial positions were filled or changed according to changes in the power equation and these are detailed below.

In Bagmati province, the Chief Minister, Shalikram Jamakattel, appointed six new ministers. This included Pukar Maharjan from the Nepali Congress as the Minister for Tourism, Industry, and Cooperative; Uttam Joshi as the Minister for Health; Masina Khadka as the Minister of Forest and Environment; and Ramakrishna Chitrakar as a minister without

portfolio. Additionally, from CPN (Unified Socialist), Dr. Rajendra Man Shrestha took an oath as the Minister for Agriculture and Livestock Development and Laxman Lamsal as the Minister for Labor, Employment, and Transport.40

In the case of Madhesh Province, on May 23rd, 2023, the council of ministers was reshuffled with the participation of the Nepali Congress and CPN (Unified Socialist) in the government. Governor Hari Shankar Mishra appointed the new Council of Ministers, with Chief Minister Yadav holding the portfolios of Internal Affairs, Communications and Law, Forest and Environment, and Labor and Transport. Additionally, Krishna Prasad Yadav was appointed as the Minister of Physical Infrastructure Development; Sanjay Kumar Yadav as the Minister of Finance; Mahesh Prasad Yadav as the Minister of Education and Social Welfare; Govinda Bahadur Neupane as the Minister of Land Management, Agriculture and Cooperatives; Birendra Prasad Singh as the Minister of Health and Population; and Basant Kumar Kusawaha and Surita Kumari Sah as ministers without a portfolio.41

In the case of Gandaki Province, on May 12, Chief Minister Surendra Raj Pandey expanded his cabinet by appointing four new ministers. Members of the Nepali Congress Dipendra Bahadur Thapa, Mahesh Dhwai GC and Jit Prakash Ale Magar were appointed as the Minister for Industry, Tourism, and Forest and Environment; Minister for Agriculture and Land Management; and Minister of

Economic Affairs respectively. From the CPN (Maoist Centre), Resham Bahadur Jugjali was appointed as the Minister for Physical Infrastructure Development and Transport Management.42

There have been no new appointments in the Koshi province. Whereas in Lumbini Province, on April 28, 2023, Dilli Bahadur Chaudhary took oath as the Chief Minister of the province. On May 22, 2023, Raju Khanal from Nepali Congress was appointed as the Minister of Health; Chandrakesh Gupta of the Janamat Party as the Minister of Social Development; and Bhandaru Lal Ahi of JSP as the Minister of Agriculture and Land Management. The role of the Minister of Physical Infrastructure was handed to Dharma Bahadur Chaudhary of Nagarik Unmukti Party. Additionally, Santosh Kumar Pandey from Loktantrik Samajwadi Party became the Minister of Internal Affairs and Law.43

In the case of Karnali Province, on April 20, 2023, Chief Minister Raj Kumar Sharma appointed three ministers from Nepali Congress, Vedraj Singh as the Minister for Economic Affairs and Planning, Khadga Bahadur Pokharel as the Minister for Social Development and Krishna Kumar BC as the Minister for Tourism, Forest, and Environment. Additionally, Urmila Bishwokarma was appointed as the Minister for Energy, making the number of ministries in the Karnali Province eight. 44

Lastly, the Chief Minister from the Sudurpaschim Province inducted

three new ministers and one state minister on May 20, 2023. Prithvi Bahadur Singh from Nepali Congress was appointed as the Minister of Internal Affairs and Law; Jhapat Bahadur Saud from CPN (Maoist Centre) as Minister of Social Development; and Ramesh Singh Dhami from the

Maoist Center as the Minister of Industry, Forest and Environment. The cabinet now has seven members.45

Provinces Unveil their Budget for FY 2023/24 AD (2080/81 BS)

On June 16, 2023, all seven

Table 2. Provincial Budget Breakdown

In comparison to last year, only the budget of Karnali Province has increased by NPR 0.76 billion (USD 6 million). For Bagmati province, the budget decreased by around NPR 8 billion (USD

610 million) whereas for all other provinces, the budget has decreased by around NPR 1 to 3 billion (USD 7.6 to 22.9 million). Most of the provinces have set aside a big amount of budget

provinces in Nepal announced their annual budget for FY 2023/24 AD (2080/81 BS) which totaled NPR 279.59 billion (USD 2.13 billion).46 The provincial budget is detailed in the following table:

on infrastructure development focusing on reviving the languishing economy.47

In this review period, many notable events occurred. The Government of Nepal unveiled the budget for the fiscal year; Prime Minister Dahal expanded his cabinet; the CPN(UML) pulled out of the government from various provinces; certain scams involving high-profile political members emerged and so on. In terms of the flux within the government and the scams that came to light, this has been a continuing problem in Nepal. However, what is new is the public’s want for change. For example, the economist Swarnim Wagle also got elected from RSP from Tanahun-01 and the party’s president Rabi Lamichhane again won the election for Chitwan-02. This, along with actions against the uncovering of the scams, has brought positive hope among general public that their needs and problems will be addressed. Moreover, bilateral meetings have renewed Nepal’s ties with many countries like India, China, UK, USA, Japan, South Korea and made them stronger with discussions on trade, investment, hydropower growth, peacekeeping missions, agriculture and tourism to improve the socio-economic condition of Nepal.

International Economy

During the review period, inflation posed a persistent issue in developed and developing countries alike, with commodity prices showing a decline, but food and necessities remained vulnerable to fluctuations in the global market.58 The stabilization of global markets after the Coronavirus pandemic and the Russia-Ukraine war led to significant decreases in shipping and energy prices.59 Moreover, mounting inflationary pressures necessitated central banks to implement more stringent monetary policies, while uncertainties in trade and financial markets continued to cast shadows over the global economy.60 On a brighter note, there was a positive trend in the worldwide trade of green goods.61 The Global Trade Outlook 2023 from the World Trade Organization (WTO) anticipated slow trade growth in the aftermath of multiple crises like wars, pandemics, and high inflation.62 Similarly, the World Economic Outlook 2023 of the International Monetary Fund (IMF) painted a doubtful picture of the global economy, with increasing geopolitical and economic uncertainties.63 Unfortunately, developing countries bore the brunt of inflation's impact, particularly on food and necessities. Consequently, this posed challenges for achieving the Sustainable Development Goals (SDGs). Tighter credit conditions and rising external debt costs further compounded developmental hurdles faced by developing countries. In this situation, to ensure global macroeconomic and financial stability, comprehensive policy actions need be taken at both the global and national levels.

ECONOMIC CRISIS UPDATES

Inflation Hits Developing Countries

According to the Trade and Development Update of the United Nations Conference on Trade and Development (UNCTAD) released on April 2023, it is predicted that the cost of living in developing countries would rise mostly because of increased food prices.64 Furthermore, it is forecasted that developing countries could see decreased international support and more debt resulting from global political tensions including the US-China geo-political rivalry and the Russia-Ukraine war. In this situation, the developing world may further suffer from poverty, low economic growth, and, ultimately, developmental crisis.

The report also shows that a major concern for policymakers would be to strike the right balance between financial stability and price stability. Other policy challenges in 2023 are securing productive investments, utilizing monetary policy to address inflation and other macroeconomic issues, and managing sustainable debt. South Asia, in particular, might be more susceptible to inflationary and budgetary burdens because the region relies on fuel imports.

Uncertainties and Plummeting Growth

The IMF, through its flagship

Worldwide Economic Outlook 2023, predicted a fall in growth with an unpredictable future for the international financial sector.65 The global economy will have to battle with the complications of the banking crisis, the RussiaUkraine war, soaring inflation, and the scars of the coronavirus pandemic. Upsurge in public debt as a proportion of GDP can also create repercussions for developing nations and geoeconomic dispersions.66

INTERNATIONAL FINANCIAL UPDATES

IFC and Goldman Sachs Promote Women Entrepreneurs

The Women Entrepreneurs Opportunity Facility (WEOF) successfully reached 164,000 women entrepreneurs, surpassing the 100,000 target. With this, over USD 4.5 billion (NPR 590 billion) in loans was disbursed to womenowned businesses through the Goldman Sachs 10,000 Women and International Finance Corporation (IFC) partnership.67 The loans facilitated women entrepreneurs in 55 countries channeled through 95 financial institutions to support recovery in developing countries. The WEOF program was initially established in 2014 with funding from the Goldman Sachs Foundation. And today, the WEOF along with its predecessors IFC Banking on Women and Goldman Sachs 10,000 Women have reached more than 200,000 women entrepreneurs from 150

countries worldwide.68

INTERNATIONAL TRADE UPDATES

Global Trade Continued to be Hindered by External Factors

According to the Global Trade Outlook of the World Trade Organization (WTO), international trade growth will once again remain sluggish in 2023. The major reasons for the subpar trade growth are the conflict in Ukraine, stricter monetary policy, unpredictability in the financial markets, and persistently rising inflation. The total amount of global trade in services climbed by 15% to USD 6.8 trillion (NPR 892.309 trillion) in 2022, out of which exports of digital services totaled USD 3.82 trillion (NPR 501.268 trillion). The report predicts that global merchandise trade will increase by 1.7% in 2023 before accelerating to 3.2% in 2024.

Escalated Green Goods Trade

The trade of environmentfriendly goods has significantly grown in the last year, as per UNCTAD’s Global Trade Update published in March 2023. In 2022, the trade of environmental goods was USD 1.9 trillion (NPR 249.32 trillion), representing 10.7% of trade in all manufactured goods. This trend is a positive effort in addressing climate change and environmental degradation. The rise in green goods trade can be attributed to countries progressively incorporating net-

zero carbon obligations and mainstreaming of environment into their trade policies.69 Some of the factors responsible for the improvement in overall international trade, including the trade of green goods, include the revival of key economies from the coronavirus pandemic, a decrease in supply chain costs, the global rise in services demand, and a decrease in the value of US dollars. 70

India-China Trade Escalates

In the review period, the trade between India and China escalated by 4.5% to USD 44.34 billion (NPR 581.83 trillion). The rise can be mainly attributed to the growth in Indian imports by 4.6%, amounting to USD 37.86 billion (NPR 496.8 trillion) as of the end of April 2023. This rise resembles the historic trade between the two nations last year, where the trade figure peaked at USD 135.98 billion (NPR 178.43 trillion) with a whopping USD 100 billion (NPR 131.22 trillion) trade deficit for India. The everincreasing trend in bilateral trade between India and China might again make a record in 2023 despite the long-standing border and military concerns between the two giants. This would mean that China maintains its spot as the top exporter to India. As for India, it would mean dependence on Chinese products, countering the frictions from trade tensions between the US and China, and foreign reserve pressures. 71

KEY HIGHLIGHTS OF INTERNATIONAL REPORTS

The Growing Risk of Long-Term Low Growth

With the increase in inflation and interest rates being increasingly uncertain, the prospects for a recovery in the global economy remain static. According to the World Economic Situation and Prospects, as of mid-2023, the world economy is facing the risk of low growth for the long term because of the impacts of multiple crises like the global COVID-19 pandemic, the serious issue of climate change and unchanging macro-economic structural challenges.72 Moreover, the Russian invasion of Ukraine and the sharp tightening of monetary policy to address the increase in inflation and the recent banking sector stress in the developed nations give a sign of turmoil in the international banking world which could lead to weakened global growth.73

As per the World Bank report on Global Economic Prospects, the growth rate of the world economy is estimated to be 2.3% in 2023, which is a 0.4% increase from the previous forecast in January and 2.5% in 2024. In the US, the revision of growth is forecasted to be 1.1% in 2023 due to resilient household spending. However, due to the uncertainty around financial stability and the speed of monetary tightening, the country’s growth prospects are negative.74 The economy of the European Union, driven by low gas prices and increasing consumer spending, is expected to increase by 0.9%. The time duration of a string of bank failures in the European region and the US in March 2023 will determine if the developed

economies will fall into recession or not in 2023.75

As a result of COVID-19-related restrictions, China’s growth this year is estimated to be at 5.3%, but the average growth rate is still less than the one two decades before the pandemic. However, according to World Economic Forum (WEF) Chief Economic Outlooks, published in May 2023, there has been a strong forecast for some regions like Asia, where China’s reopening is estimated to increase activities across the whole continent which will be a rebound for China.76 For many developing nations, the growth prospects have decreased as the credit conditions tightened and the costs of external financing rose. In the case of Africa, Latin America, and the Caribbean, the GDP per capita is forecasted to grow marginally, showing longer-term static economic performance. In the case of least developed countries, the growth is estimated to be 4.1% in 2023 and 5.2 % in 2024, which is very low as per the 7% growth rate expected in the 2030 Sustainable Development. Moreover, global trade is expected to grow in 2023 but below the pre-pandemic trend because of geopolitical tensions, the weakening of global demand, and monetary and fiscal policies being tighter.77 For more macroeconomic and financial stability, comprehensive policy action is deemed necessary at the global and national levels.78

Asia's Low-Carbon Transition: Opportunities and Challenges for Trade

As per the findings of the ‘Asia’s Low-Carbon Transition:

Opportunities and Challenges for Trade’ report, the pattern of green trade in Asian economies seems to be growing in the case of its export share within the region and global trade. The report also studied the patterns of green trade of its member nations in the Asia and Pacific region from 1990 to 2019, and there have been three major findings. Firstly, the export of green goods in Asian countries has been increasing continuously since 2010. Secondly, the share of exports of the economies in the global green has grown hugely in recent years. Thirdly, manufacturing products like machinery and electric equipment account for the biggest part of the green trade. Lastly, the pattern of green trade depends on what the green industry is, which shows the need for an international consensus to define green trade to measure and analyze the green trade patterns more accurately.79

KEY DEVELOPMENTS

Global Divergence in the DeRoutinization of Jobs

The study ‘Global Divergence in the De-routinization of Jobs’ introduces a method for estimating the economy-specific task content in jobs of different income levels across economies. The results from the employment data of 87 nations show that the jobs in low and middle-income countries are more routine-based than in high-income nations. The findings from the report are different from the traditional assumptions that the task details of occupations are converging worldwide, which may also

overestimate the role of routine replacing technological change in explaining wage inequality in low or middle-income economies. Therefore, investments seem necessary in skills, technology, and participation in global value chains for work content and productivity to converge as in those of high-income nations.80

United Nations Trade Forum 2023

At the United Nations Trade Forum 2023, held from 8th to 9th May 2023 at Palais des Nations, Switzerland, high-impact trade initiatives were discussed to accelerate the SDG goals. The key messages was that South-South partnerships can grow knowledge sharing to best practices in trade, investment, technology transfer, and capacity building. Another message was a political call for private investments to grow the resource mobilization for bridging the financing gap for achieving SDG 14 (Life Below Water). Implementing trade targets by 2030 was also deemed important which had received the smallest part of official development assistance till now. The key message was the need for gender-responsive digitalization and e-commerce strategies to ensure that women-led smallscale enterprises benefit from new digital opportunities and that challenges being faced in developing nations are recognized and addressed.81

GLOBAL EVENTS UPDATE

Launch of GPT-4

On March 14, 2023, Open AI, an

American artificial intelligence research laboratory, launched GPT-4 (Generative Pre-trained Transformer 4) publicly. This is the next-generation large language model for the artificial intelligence chatbot Chat GPT which had taken the world by storm. GPT-4 would likely exhibit more advanced language understanding, reasoning, and generation capabilities compared to its predecessor. It demonstrates superior performance and reliability. In the field of education, it could revolutionize the way students learn and interact with educational content.82 Besides, it raises concerns about misinformation, bias, and the need to ensure that it operates ethically and fairly. It may also disrupt certain job markets creating a need for upskilling and reskilling in the workforce.83

2023 Banking Crisis

On 1st May 2023, JPMorgan Chase acquired the San Franciscobased First Republic Bank (FRB) which had an emphasis on highnet-worth clients. Its failure was exacerbated by the fact that a sizable amount of its deposits exceeded the Federal Deposit Insurance Corp’s (FDIC) upper limit for coverage. This collapse was the second largest in US history and surpassed the fall down of Silicon Valley Bank (SVB) and Signature Bank. The shockwave of the US banking crisis was felt in Europe when Credit Suisse collapsed and was acquired by Union Bank of Switzerland (UBS). This banking crisis did not resemble the 2008 financial crisis since it was

not as widespread. However, because the banking industry is so intricate, there is a possibility that new fragilities will emerge in the future.84

Outlook

WHO Lifts COVID-19 Global Health Emergency

On May 5, 2023, the World Health Organization (WHO) ended its declaration of COVID-19 as

a global health emergency.85

This move comes nearly three years after the coronavirus was declared a pandemic on March 11, 2022.

The array of global issues, including inflation, climate change, tighter monetary restrictions and credit, and banking crises, has signaled a weakened growth. The aftermath of the Russia-Ukraine war and the coronavirus pandemic is slowly fading while low economic growth is projected. However, major financial, strategic, and investments are still vulnerable to geopolitical tensions and economic risks.

Developing countries remain more affected by global crises as a result of tighter credit conditions, increased debt costs, and a rise in the inflation of basic commodities. There is a need for partnership among countries in the global South to share knowledge on trade and development practices. Comprehensive policy action at a global and country level would also be necessary for achieving macroeconomic and financial stability. Improvement in expenditure, reformation in human and physical capital, and efficient debt management are also required to maintain fiscal sustainability in least-developed and developing countries.

2

Macroeconomic Overview

Macroeconomic Overview

During the review period, the macroeconomic indicators showed rising inflation and an increment in the cost of goods and services. The net foreign direct investment dropped by 15.8% of what it was in the last year, signaling a need for the government to improve the business environment for foreign investors. Remittances, however, showed an increment in the review period with astounding growth compared to the previous fiscal year. The review period witnessed the announcement of the budget of NPR 1.751 trillion (USD 13.34 billion) for the new FY 2023/24 (2080/81 BS). The budget was contractionary in nature as it was 2.37% smaller than the budget of NPR 1.793 trillion (USD 13.36 billion) announced for FY 202223 (2079/80 BS). The budget targeted to limit inflation to 6.5% while expecting economic growth to be 6%. Similarly, the budget introduced measures such as scrapping government agencies and halting purchases of new vehicles to curb expenses. In terms of foreign trade, Nepal has experienced a decline in total trade, with a decrease of 18.9% in FY 2022/23 (2079/80 BS) when compared to the same period of the preceding year. 87

Gross Domestic Product (GDP)

As per the ‘Current Macroeconomic and Financial Situation’ published by the Nepal Rastra Bank (NRB), the Gross Domestic Product (GDP) at current prices was NPR 5.38 trillion (USD 40.99 billion) in the ninth month of FY 2022/23 AD (2079/80 BS) as compared to NPR 4.85 trillion (USD 36.96 billion) in the corresponding period of FY 2021/22 AD (2078/79

BS).88 This shows a surge of GDP by 10.92% which is a positive trend indicating an increase in economic activities.

Additionally, the government released its new budget for FY 2023/24 AD (2023/24 BS) on 29 May 2023. The budget anticipated GDP growth of 6% in the upcoming year. The high growth rate is dubious, considering macroeconomic challenges such as inflation, diminishing

government expenditure, and revenue collection. The World Bank, on the other hand, has forecasted slower growth of 4.1% in FY 2023/24 AD (2080/81 BS) and slightly higher growth of 4.9% in FY 2024/25 AD (2081/82 BS).89

Inflation

The average inflation rate is measured by Consumer Price Index (CPI). As per NRB data in the ninth month of the fiscal year 2022/23 AD (2079/80 BS), the year-on-year CPI reached 7.76% from 7.14% in the corresponding period of the previous FY 2021/22 AD (2078/79 BS).90 Economists have suggested that the inflation is causing in the loss in demand for goods and services in Nepal.91

According to the Asian Development Bank (ADB), the country's inflation is anticipated to rise to 7.4% in FY 2023 AD, surpassing the 6.3% recorded in FY 2022 AD despite the implementation of a stringent monetary policy.92 One possible explanation for this phenomenon could be the rise in remittance inflows which are primarily being used for the consumption of goods and services rather than productive investments by householders. In a promising

projection, the ADB expects inflation to decelerate slightly to 6.2% in FY 2024. This estimation hinges on the assumption of favorable agriculture, declining oil prices, and a reduction in inflationary pressures in neighboring India.

changes that have occurred in the CPI index over six consecutive fiscal years till mid-April of FY 2022/23 AD (2079/80 BS).

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Figure 3. GPD in current prices over the last five years (in NPR billion)

Figure 4. Year-onyear CPI as of midApril of the last six FYs (in %)

Figure 2 shows year-on-year

Consumption of Goods and Services

The Consumer Price Index (CPI) measures the overall impact of

price changes for a diversified set of products and services. It is a single value representation of the increase in the price level of a basket of goods and services

as individuals require a gamut of goods and services for everyday life. Table 3 shows the pattern of consumption over a series of three consecutive periods.

The CPI for food and beverages witnessed a decrease from 7.04% to 6.93% during the review period in 2022/23 AD (2079/80 BS).93. This decline can be attributed to a slight reduction in the prices of ghee and oil by 1.23% as well as pulses by 0.05%. However, it is important to highlight that there has been a significant surge in vegetable prices which have risen by 9.92% compared to the corresponding period last year. Similarly, prices of other subcategories, such as milk products and eggs, fruits, meat and fish, and spices, have risen by 5.67%, 3.31%, and 2.39%, respectively.94

On the flip side, the review period

has seen a notable upswing in non-food and service inflation, rising from an already higher base of 7.18% to 8.42% in 2022/23 AD (2079/80 BS). This increase has affected various sectors, with health services experiencing a price surge of 10.39%. Under this, prices of health services, housing and utilities, transportation, education, clothes and footwear, and recreation and culture have risen by 10.39%, 9.54%, 8.29%, 8.67%, 7.03%, and 8.81%, respectively.95

Budget Highlights

Finance Minister Prakash Sharan

Mahat unveiled the budget of NPR 1.751 trillion (USD 13.34 billion) for the new FY 2023/24 AD (2080/81 BS). This year’s budget was 2.37% smaller than the budget of NPR 1.793 trillion (USD 13.66 billion) announced for the previous FY 2022/23 AD (2079/80 BS), which ends in mid-July 2023. In terms of allocation of funds, the largest budget allocation is for current expenditure, with 65.2%, followed by 17.55% for financial expenditure and 17.25% for capital expenditure. The government plans to collect revenue of NPR 1.248 trillion (USD 0.95 billion) while aiming to limit inflation to 6.5%.96

Source: Nepal’s Budget FY 2023/24

Figure 5. Allocation of funds for FY 2023/24 AD (2080/81 BS) budget

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Table 3. Food and Non-food Consumer Price Index (CPI) over two consecutive periods (in percentage)

The revenue sources for the government are tax revenue, with 71.3%, internal and foreign debt, with 25.85%; and foreign grants, with 2.85%. Experts have opined that the budget has favored big business houses and has not done justice in addressing enduring crises, including high inflation.97 The sector-wise highlights of the budget are briefly stated below.

Expense-Cutting Measures

In the budget for the fiscal year 2023/24 AD (2080/81 BS), the finance minister announced several measures to cut expenses of the government owing to fiscal and inflationary pressures. The government announced that no new vehicles would be purchased unless needed, and no new building would be made in this fiscal year. Similarly, twenty unnecessary agencies and entities of government were scrapped. Furthermore, restrictions were placed on allowances and foreign trips of government employees.98

Innovation and Startups

The government allocated NPR 1 billion (USD 7.62 million) from the budget for innovation and invention. Likewise, the government of Nepal planned to spend at least 1% of the total budget on research and innovation. Announcements for startups include an allocation of NPR 1.25 billion (USD 9.52 million) and a provision for setting up a business with a capital of just NPR 100 (USD 0.762).99 Furthermore, the budget also stated the promotion of Make in Nepal and Made in Nepal initiatives.

Agriculture

The government allocated NPR 58.98 billion (USD 0.44 billion) for the agriculture sector including NPR 3.22 billion (USD 24.53 million) for the flagship Prime Minister Agriculture Modernization Project. Similarly, NPR 30 billion (USD 22.8 million) and NPR 470 million (USD 3.58 million) were separated for the grant to purchase chemical

fertilizers.100 The cultivation of marijuana for medical purposes was also included in the budget.

Education

NPR 197.29 billion (USD 1.503 billion) was allocated to the Ministry of Education, Science and Technology. Within this, NPR 8.45 billion (USD 64.39 million) was allocated for the mid-day school meal program and NPR 3.02 billion (USD 23.01 million) for scholarships.101 The government also proposed building medical colleges in different places in the country, including Butwal, Surkhet, and Dadeldhura.

Social Security and Employment

The government plans to continue the existing programs in the social security sector with a budget of NPR 157.72 billion (USD 1.2 billion). Social security included providing NPR 4000 (USD 30.48) monthly to elder citizens aged 68 or older. In terms of employment, the government separated NPR 5.94 billion (USD

Source: Nepal’s Budget FY 2023/24

Figure 6. Revenue source for budget for FY 2023/24 AD (2079/80 BS)

45.26 million) for the Prime Minister Employment Program.102 Furthermore, the budget signaled to make contribution-based social security programs.

Industries

The Ministry of Industry, Commerce, and Supplies was allocated NPR 9.46 billion (USD 7.2 million). The budget sought to expand industrial districts through a budget of NPR 33 billion (USD 25.14 million) and

NPR 540 million (USD 4.11 million) to develop special economic zones.103 The further promotion of exports of Himalayan drinking water was also included in this year’s budget. Moreover, the budget highlighted the plan to develop industrial villages and entrepreneurship.

FINANCE STATUS Investments

During the review period, the net

Foreign Direct Investment (FDI) reached NPR 2.62 billion (USD 19.96 million) as of mid-April. In the same period of FY 2021/22 AD (2078/79 BS), NPR 16.51 billion (USD 125.81 million) was reported. This indicates a drop of 15.8% in FDI compared to the same time last year.104

Figure 7. Net foreign direct investments (FDIs in Nepal until mid-April for seven consecutive FYs (in NPR million)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-Apr 2023)

The figure above represents the net FDI inflows of Nepal until mid-April of seven consecutive FYs. The decreasing trend in FDI can hamper Nepal’s graduation from Least Developed Country (LDC) status and meet the development goals.

Specialists and experts have suggested alternative ways such as green financing, blended finance, developing the bond market, and hedging mechanisms to improve FDI

inflows in Nepal.105 Therefore, Nepal has a lot of potential to attract FDI from various global funds for sustainable and resilient development.

FOREIGN AID

Bilateral and Multilateral Aid from Donor Agencies

Throughout the review period Nepal received aid from various development agencies such

as US Agency for International Development (USAID), Asian Development Bank (ADB), and United Nations Development Programme (UNDP).106

USAID continued to remain the largest donor agency, followed by the United Kingdom and Switzerland. The breakdown of disbursements made by donor agencies during the review period has been presented in the pie chart above.

NET FDI (IN NPR MILLION)

1, 2023 to May 30, 20234 (in %)

Source: Ministry of Finance, 2023

First EU-Nepal Business Forum Held

The first EU-Nepal business forum was held for two days on 8-9 May 2023, aimed at exploring trade and investment opportunities between the two.107 The event was the first of its kind that provided a platform for business leaders to come together and discuss potential investment sectors, including IT, renewable energy, hydropower, tourism, and agriculture. The program has been considered crucial for Nepal to ensure sufficient investments for its smooth graduation from the Least Developed Country (LDC). Furthermore, the EUNepal Trade and Investment Programme supported Nepali officials and businesses through workshops and training. Through these programs, the EU intends to strengthen Nepal’s trade capacity and knowledge, given the loss of trade privileges that the country has been enjoying as an LDC.108

PROJECT/PROGRAM SPECIFIC AIDS

USAID and the American

Chamber of Commerce in Nepal (AmCham Nepal) Collaborate to Facilitate Businesses

USAID and AmCham Nepal have signed an agreement to create a favorable environment for American businesses in Nepal.109 Under this agreement, USAID’s Trade and Competitiveness program will help to create conducive policies for investors, while AmCham will assist new businesses to invest in Nepal by organizing workshops and seminars. It has been agreed that the cooperation will run for three years, from 2023 until 2026.

UNDP and the Government of Japan to Assist Climate Resiliency in Jajarkot

UNDP and the government of Japan are tying up to implement a project called ‘Enhancing Human Security through Local Climate Actions’. The project, which was launched on 2 May 2023, and hopes to help nearly 40,000 people and generate almost 200 new jobs in the two municipalities of Jajarkot district.110 The project plans to implement a local-level climate

and human security framework that supports local officials and communities. In addition, the program will supply three disaster-proof infrastructures and sustainable energy for 3000 households. The funding comes from Japan’s Supplementary Budget and UNDP’s Global Climate Promise.

GRANTS AND CONCESSIONAL LOANS

ADB Consents to Loan to Enhance Trade Infrastructure

On May 2023, the ADB approved providing a loan worth USD 300 million (NPR 39.36 billion) to support the construction of a 95 km road connecting Karkarbhitta of Jhapa district to Laukhahi of Sunsari district.111 The strategic road lies near international trade routes with India. The loan will upgrade the existing road into four lanes and help in the enhancement of border trade. Similarly, a supplementary grant of USD 750,000 (NPR 98.41 million) plans to provide technical support for designing climateresilient infrastructure and maintenance efforts. As per ADB,

Figure 8. Distribution of foreign aid disbursement according to donor agencies from March

Finland Germany Japan Switzerland United Kingdom USAID

the new road, once constructed, will lead to improved connectivity and economic activity in the border area.

REMITTANCE Remittance Inflows

The inflow of remittances increased by 24.2%, amounting to NPR 903.39 billion (USD 6.884 billion) in the last nine months of FY 2022/23 AD (2079/80 BS),

which was a 0.2% decrease as compared to the same period of the previous FY 2021/22 AD (2078/79 BS).112 The increase could be credited to the increase in the use of formal channels for sending remittances.113 Remittance has traditionally been the major source of foreign reserves for Nepal, representing about a quarter of GDP.114 However, most of the remittances are spent on importing basic consumption goods and for

unproductive purposes.115

The figure shows the gradual increase in remittance inflows after the drop of -0.6% in FY 2019/20 AD (2076/77 BS) because of COVID-19. The remittance flow has surpassed the pre-COVID-19 levels and has recovered quite extensively.

Figure 9. Remittance inflows to Nepal until nine months (ending in mid-April) of the last seven consecutive FYs (in NPR billion)

PLANS AND PROGRAMS TARGETED TOWARD MIGRANT WORKERS

Government to Scrap Fixed-Term Labor Approvals

The Government of Nepal has removed the two-year labor approvals provided to migrant workers. With this decision, the Nepali missions can renew the labor approval instead of the Department of Foreign Employment. Now, migrants can work for longer terms without having to return to Nepal just to

renew their approvals and also save their travel expenses.116

Malaysia, UAE, and Saudi Arabia Among the Top Destinations

Malaysia, along with the Arab nations of UAE and Saudi Arabia, had the most labor approvals for Nepali migrant workers.117 It is also interesting to note that there has been a rise in the number of approvals for European countries such as Romania, Malta, and Poland. This shows the diversification in the destination countries from the usual Gulf and South East Asian nations.

SSF Launched for Migrant Workers

Prime Minister Pushpa Kamal Dahal launched the Social Security Scheme (SSF) for migrant workers who are employed by foreign companies or self-employed. The program has various schemes such as accident and disability, old age protection, and dependent family schemes. Workers can use the Foreign Employment Information System (FMIS) online to register for this scheme. Furthermore, the Non-Resident Nepali Association (NRNA) has also agreed to

Source: Current Macro-economic and Financial Situation of Nepal (ending mid-April 2023)

support the funding for SSF. The minimum monthly contribution for the scheme would be NPR 2002 (USD 15.25).118

by the government, there was a marked decrease. In the review period, the number of borrowers stood at 913, which is a 4.27% decline from 952 borrowers in mid-July 2022. Similarly, the outstanding loan amount stood at NPR 459.8 million (USD 3.503 million) in mid-April 2023, which

is a decrease of 22.7% from NPR 564.2 million (USD 4.299 million), indicating a positive signal for the government in terms of loan disbursement. The data for the same has been presented in the table below.

Table 4. Top 10 destinations of Nepali migrant workers of the first nine months of the last three FYs

Source: Current Macro-economic and Financial Situation of Nepal (ending mid-April 2023)

Worker’s Loan

In terms of loans dispersed to young returnee migrant workers

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Table 5 Project loan for youthreturnee migrant workers

GOVERNMENT STATISTICS Government Reserves

According to the Current Macroeconomic and Financial Situation ending in mid-April 2023, the gross foreign exchange reserves stood at NPR 1.433 trillion (USD 10.920 billion). The amount was a 17% increase from NPR 1.215 trillion (USD 9.259 billion) in midJuly 2022.119 Reserves held by Nepal Rastra Bank (NRB) grew by 20.6% to NPR 1.273 trillion (USD

9.70 billion), and reserves held by Banks and Financial Institutions (BFIs) increased by 0.2% to NPR 159.74 billion (USD 1.217 billion).

According to NRB, the foreign reserves are sufficient to import merchandise and services for 9.4 months and perspective merchandise import for 10.4 months. The enlargement in foreign reserves can be attributed to the recovery of the tourism sector and improvement in the flow of remittances.

Particulars

Government Debt

Government of Nepal’s (GoN’s) domestic debt can be divided into five parts, namely treasury bills, development bonds, citizen savings bonds, foreign employment bonds, and others through Nepal Rastra Bank (NRB),

commercial banks, development banks, finance companies, and others. The total domestic debt was NPR 103.3 billion (USD 0.78 billion) in mid-April 2023 compared to NPR 87.6 billion (USD 0.66 billion) the previous year.121 This amounts to a 17.92% hike in domestic government debt. The

Besides this, the central bank lowered the bank rate from 8.5% to 7.5% in the third quarterly review of the monetary policy for FY 2022/23 AD (2079/80 BS).120 The revision aimed to address the macroeconomic problems of Nepal, like high-interest rates, inflation, and credit risks. Lastly, the reserves-to-GDP ratio was 26.6% in mid-April 2023 compared to 24.6% in mid-July 2022. The reserves-to-GDP ratio in the last three years have been represented in Table 4.

increase in debt shows the cash crunch and the requirement of funds for the recurrent expenditure of the government.122 Similarly, the external debt of the GoN stood at NPR 1.02 trillion (USD 7.77 billion) as of the end of FY 2021/22 AD (2078/79 BS).

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Table 6. Mid-months' reserve-to-GDP ratio of the last three FYs (in %)

Figure 10. Gross foreign exchange reserves of midApril of the last seven consecutive FYs (in NPR trillion)

Source: Current Macro-economic and Financial Situation of Nepal (ending mid-April 2023)

Government Spending (Expenditure and Revenue)

According to the Financial Comptroller General Office (FCGO), the total government expenditure and revenue for the last nine months of FY 2022/23 AD (2079/80 BS) amounted to NPR 943.051 billion (USD 7.186 billion) and NPR 683.805 billion (USD 5.211 billion), respectively.123

The expenditure and revenue witnessed an increase from

NPR 794.256 billion (USD 6.052 billion) and NPR 789.260 billion (USD 6.014 billion) in comparison to the corresponding period of the previous FY.

The surge in expenditure of 18.7% is greater than the previous year’s 15.03%. Notably, the capital and recurrent expenditures of the government have surged by 3.33% and 13%, respectively. The financial expenditure saw a 4.03% decline. The noticeable increase

in recurrent expenditure can be attributed to the rising burden of government for operation expenses, including paying civil servants of all levels. Additionally, revenue generation has not been strong compared to last year’s 15.4%. Instead, it decreased by 15.42% during the review period. The tax collected also saw a weakening of 18.12%, while nontax revenue scaled by 10.11%.124

Figure 11. Total domestic debt for mid-Aug and midApril (first and last nine months) of the last four FYs (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Table 7. Domestic government debt of mid-April in the last three years (in NPR billion)

TRADE

Foreign Trade Scenario

In terms of the foreign trade scenario, the total foreign trade decreased by 18.9% in the nine months of the current FY 2022/23 AD (2079/80 BS) to NPR 1319.79 billion (USD 9.98 billion) as compared to a 34.9% increase to NPR 1627.23 billion (USD 12.30 billion) in the corresponding period of the previous FY 2021/22 AD (2078/79 BS).125 In

terms of total trade, the share of export was 9% in mid-April of FY 2022/23 AD (2079/80 BS), a decrease from 9.9% in midApril of FY 2021/22 AD (2078/79 BS), whereas of imports was 91% in mid-April of FY 2022/23 AD (2079/80 BS), which increased from 90.1% in mid-April of FY 2021/22 AD (2078/79 BS). 126

Top Imports and Exports

According to the Current Macroeconomic and Financial

Situation for the nine months of FY 2022/23 AD (2079/80 BS), there was a 26.3% decrease in merchandise exports which stood at NPR 118.29 billion (USD 894.6 million) compared to a 69.4% increase in the previous year. The top five exports of the country are palm oil (14.6% share), woollen carpet (7.2% share), soybean oil (7.1% share), polyester yarn & thread (6.5% share), and cardamom (5.4% share).127 Exports of jute items, soybean oil, palm oil, and textiles,

Figure 12. Government spending (expenditure and revenue) as of midApril in the last seven FYs (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Table 8. Government spending (expenditure and revenue) as of mid-April 2023

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

among others, have decreased, whereas exports of woollen carpets, cardamom, zinc sheet, and readymade garments, among others, have increased compared to the previous financial year.

The same report showed a decline of 18.1% in Merchandise exports to NPR 1201.51 billion (USD 908.7 billion), which had previously increased by 32.0% in FY 2021/22 AD (2078/79 BS).

The top imports of the country remained petroleum products (19.2% share), machinery and parts (4.5% share), transport and vehicle equipment and parts (3.8% share), medicine (3.1% share), and gold (3.1% share).128 Imports of medicine,

telecommunication equipment and parts, transport equipment and parts, and other machinery, among others, decreased, whereas imports of sponge iron, paper, petroleum products, and gold, among others, increased as compared to FY 2022/23 AD (2079/80 BS).

While exports to India decreased by 35.1% and imports from India decreased by 16.4%, the country remained Nepal’s largest trade partner, holding the highest import (62.7%) and export (70.2%) shares.129 The recent agreement between the two countries to increase the export of hydropower from Nepal by 10,000 MW in 10 years, along with plans for the establishment

of new transmission lines and the construction and extension of petroleum pipelines, can greatly strengthen Nepal’s trade.130 Additionally, the potential power trade between Nepal and Bangladesh through Indian territories could help advance Nepal’s trade sector.

In terms of Nepal’s northern neighbor, there has been a decrease in demand for Chinese imports in Nepal, which has decreased by 23%. Exports to China, on the other hand, have increased by 2.2%.131 High bank interest rates and rising inflation in the country have lowered the demand for foreign goods in Nepal.

Figure 13. Total foreign trade over last nine months of the last four FYs (in NPR billion)

Figure 14. Total imports, exports, and trade balance of the last nine months ending mid-April over the last six FYs (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Balance of Trade

As per the last nine-month data of FY 2022/23 AD (2079/80 BS) (ending mid-April), the total deficit decreased by a total of

17.1% from NPR 1306.09 billion (USD 987.8 million) in the last nine months of FY 2021/22 AD (2078/79 BS) to NPR 1083.23 billion (USD 819.25 million) in the corresponding period of FY

2022/23 AD (2079/80 BS). The year-on-year unit import price index increased by 2.6%, whereas the export price index increased by 1.1%. 132

Balance of Payments

Based on the Current Macroeconomic and Financial Situation of FY 2022/2023 AD (2079/80 BS), Nepal’s current account for the last nine months of the fiscal year (ending mid-

April 2023) remained at a deficit of NPR 51.82 billion (USD 391.9 million) as compared to an NPR 510.58 billion (USD 3.86 billion) deficit in the corresponding period of FY 2021/2022 AD (2078/79 BS).133 As of mid-April, the country’s total balance of

payments remained at a surplus of NPR 180.17 billion (USD 1.36 billion) as compared to a deficit of NPR 268.26 billion (USD 2.03) reported on the nine-month report for FY 2021/2022 AD (2078/79 BS). 134

Figure

Figure 15. Total trade balance of the last nine months of the last six FYs (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

16. Balance of Payment trends of last nine months of the last three FYs (in NPR billion)

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Gold / Silver Updates

According to the Federation of Nepal Gold and Silver Dealers’ Association, the maximum price of gold (24K) is at NPR 111,800 (USD 845.56) as of June 2023, an increase from the previous quarter, which recorded a maximum of NPR 105,700 (USD 799.41) in February. The price increased by NPR 17,000 (USD 128.57) as compared to the price from mid-May 2022 and hit an all-time high.135

The import of gold for the nine months of FY 2022/23 AD (2079/80 BS) increased by 11% from NPR 33.51 in the corresponding period of FY 2021/22 AD (2078/79 BS) to NPR 37.3 billion (USD 282.1 million) in the current period. Gold imports currently covers 7% of the country’s total imports, demonstrating growth from the 2.3% share in the corresponding period of FY 2021/22 AD (2078/79 BS). 136

On the other hand, the import of silver has decreased by 88.2% from NPR 13.45 billion (USD 101.72 million) in the nine months of FY 2021/22 AD (2078/79 BS) to NPR 1.59 billion (USD 12.02 million) in the corresponding period in FY 2022/23 AD (2079/80 BS). The import of silver has also seen a decrease of 46% to NPR 465.7 million (USD 3.52 million) in the recent period as compared to NPR 1.16 billion (USD 8.77 million) in the annual report for FY 2021/22 AD (2078/79 BS).137

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

Exchange Rate

Nepali currency vis-a-vis the USD depreciated by 2.67% from July 2022 as the exchange rate remained at NPR 131.63 per USD at the end of April 2023. Compared to the exchange rate in January 2023, the Nepali currency had depreciated by 0.91% from NPR 130.43.138 As the value of the Nepali rupee

continues to deteriorate against the US dollar, Nepal’s foreign exchange reserves, bank liquidity, and employment opportunities are declining, while debt liability has seen a significant increase. Just in the second quarter of FY 2022/23, the rise in exchange rate led to a loss of NPR 43.72 billion (USD 330.66 million) as reported by the Public Debt Management Office according

to the exchange rate in midJanuary.139 As the country’s currency weakens, Nepal will have to pay more to repay its foreign debts, which further increases the debt liability. The weakening of the Nepali rupee, combined with the country’s trade deficit, has contributed to the spiking inflation.

Figure 17. Amount of gold and silver imports in the last nine months of the past three FYs (in NPR billion)

18. Exchange rate fluctuations in April (month-end) over the last six FYs

Outlook

The Government of Nepal's domestic debt, consisting of treasury bills, development bonds, citizen saving bonds, foreign employment bonds, and others, have reached NPR 1.03 trillion (USD 7.8 billion) in mid-April 2023, indicating a 17.86% increase compared to the previous year. This rise in debt highlights the depletion of foreign exchange reserves and creates fiscal pressure as a larger proportion of the budget must be allocated to debt repayment rather than developmental projects. In terms of foreign trade, Nepal has experienced a decline in total trade, with a decrease of 18.9% in the fiscal year 2022/23 AD (2079/80 BS) compared to the previous year. The share of exports has also decreased, while imports have increased. The country's merchandise exports have declined by 26.3%, primarily affecting jute items, soybean oil, palm oil, and textiles. However, exports of woolen carpets, cardamom, zinc sheets, and ready-made garments have shown growth. Nepal's top trade partner remains India, despite a decrease in exports and imports between the two countries. The depreciation of the Nepali currency against the USD, along with a trade deficit, has led to declining foreign exchange reserves, bank liquidity, employment opportunities, and an increase in debt liability. These factors, combined with spiking inflation, pose significant challenges for Nepal's economy.

Figure

Source: Current Macroeconomic and Financial Situation of Nepal (ending mid-April 2023)

3 Sectoral Review

Agriculture and Livestock

Nepal's agriculture and livestock sector is crucial for the economy but faces many challenges due to unfavorable weather, climate change, and limited affordable fertilizers, impacting crop production and planting. Nepal also experiences milk and wheat supply shortages, leading to imports from neighboring countries which contributes to the trade deficit. To add to problems, in the recent past, livestock farmers have been grappling with the lumpy skin disease epidemic across various districts. However, for the bird flu outbreak, compensation efforts are underway for those affected. In order to tackle the various problems in the sector and drive innovation, the government has increased the budget allocation to the Ministry of Agriculture and Livestock Development. On the other hand, to promote agribusiness, the government has also introduced initiatives like the Sahaj Challenge Fund which provides subsidies for agricultural equipment through local government support.

PRODUCTION UPDATES

Cardamom Plantation Hit by Drought

Farmers in cardamom-growing regions of Nepal are facing severe difficulties this year due to drought. The lack of rainfall and irrigation systems has left the crops without water, leading to significant losses for the farmers. They are deeply concerned about their income as the cardamom plants are drying up before flowering. The situation is worsened by the absence of snowfall in the

Himalayan region, reducing water sources.158 Taplejung, known for its cardamom plantation, has seen a significant decrease in cardamom cultivation compared to the previous year, with cardamom being planted on 4,200 hectares of land, which is 50 hectares less than last year. Due to such problems, farmers are eagerly awaiting assistance to mitigate the impact of the drought on their cardamom estates.159 However, despite the challenges, Nepal has exported cardamom worth NPR 6.35 billion (USD 48.39 million) in the last nine months of the FY 2079/80 BS (2022/23 AD).160

Weather Impacts Production of Vegetable Seeds

Farmers in West Rukum's Musikot Municipality are actively engaged in the production of high-quality vegetable seeds. The seeds, including onion, cauliflower, peas, and garlic, are in high demand nationwide. Unfortunately, due to harsh climate conditions coupled with a lack of technical support and knowledge regarding the impact of climate change, seed production has been decreasing every year. In the fiscal years 2019-20, 2020-21, and 202122, the region produced 221 tons, 118 tons, and 117 tons of vegetable seeds respectively. Thus, efforts are being made by the local, provincial, and central governments to support farmers including attempts to improve the quality and quantity of seed production by establishing a Vegetable Seed Production Centre in Musikot-5.161

INPUT UPDATE

Farmers Suffer as Chemical Fertilizers Get Stalled

Approximately 19,000 metric tons of chemical fertilizers are currently stranded in warehouses operated by the agriculture inputs companies in Birgunj due to the failure to allocate distribution quotas by the Madhesh Province’s Ministry of Land Management, Agriculture and Cooperative. This delay comes at a critical time when farmers have begun planting crops such as corn, spring paddy, and sugarcane. The warehouses across eight districts in the

Madhesh Provine consist of 13,421 metric tons of urea and 5,479 metric tons of di-ammonium phosphate (DAP). In the last three months, the company has imported a substantial amount of urea and DAP, including 30,000 metric tons of urea from India through a governmentto-government arrangement.162 Additionally, the import of chemical fertilizers during the fiscal year 2021/22 AD (2078/79 BS) amounted to 215,000 metric tons, which saw a decrease from 378,000 metric tons in 2020/21 AD. Despite the decrease in imports, the fertilizers' import bill reached a record high of over NPR 22 billion (USD 167 million) due to rising international prices. The scarcity and lack of affordability of fertilizers has become a significant concern for farmers, exacerbated by supply disruptions and increased prices in the global market.163

MARKET UPDATES

Shortage in Milk Production

Nepali dairy industries have requested the government to lift restrictions on the import of skimmed milk powder or full cream milk powder due to potential shortages in the domestic market. In 2017, Nepal imported milk worth USD 18.7 million (NPR 2.4 billion).164 This resulted in a ban on skimmed milk powder imports in 2018 which was briefly lifted in 2019, and then reinstated due to objections from farmers.165 Nepal has also maintained a ban on Chinese milk and dairy products since 2008. However, milk

shortage is a lingering problem in the country. The consumption requirement for milk in Nepal is 92 liters per person annually, with the country producing 72 liters per person, meeting 80% of its needs.166 The average daily deficit is approximately 550,000 liters of fluid milk with variations during the lean and flush seasons. While milk production increases approximately by 4% annually, demand grows by 8%. Currently, only 14-16% of farmers are engaged in commercialized production of milk and the Dairy Development Corporation (DDC) faces a daily milk deficit of around 60,000 liters during the lean season.167

Nepal Urges Increased Wheat Imports from India

Nepal has requested India to supply 300,000 tons of wheat in response to the shortage faced by the country's flour mills. This shortage has led to the closure of several mills and an accompanying increase in the price of wheat-based products. In May 2022, India implemented a ban on wheat exports, which was subsequently lifted with a limited export quota of 50,000 tons allocated to Nepal until the end of March 2023.168 The ban was primarily motivated by a decrease in wheat production caused by heat waves in India. Despite an anticipated rise in wheat production in Nepal for the current year, India’s allocated export quota has proven inadequate to meet Nepal's demand, resulting in price escalations of commodities relying on wheat.169

EXPORT AND IMPORT OF AGRO-COMMODITIES

Cardamom Exports Hit NPR 6.36 billion (USD 48.46

million)

Nepal has become the world's largest exporter of cardamom, shipping a record-breaking NPR 6.36 billion (USD 48.46 million) worth of the spice in the first nine months of the fiscal year. This achievement is attributed to a 65% increase in exports, primarily due to higher production levels. Large cardamom is predominantly cultivated in four districts of eastern Nepal and is exported mainly to India. The export of large cardamom constitutes 5.4% of Nepal's total exports. Efforts are being made to increase domestic consumption and explore exports to more countries. Besides cardamom, Nepal's export of goods with high export potential, as identified by the Nepal Trade Integration Strategy, has seen an 18% growth. However, the government is reviewing the strategy to boost exports effectively.170

Import of Agricultural Products Worth NPR 250 Billion (USD 1.90

Billion)

Nepal's trade deficit for the first 10 months of the fiscal year 2022/23

AD (2079/80 BS) has reached NPR 1.2 trillion (USD 9.144 billion), reflecting the country's heavy reliance on imports. Agricultural and commodity goods worth NPR 250 billion (USD 1.90 billion) have been imported during this period. Despite the government's attempts to promote domestic production, imports of essential

food items like rice, fish, meat, oil, onion, potato, and coriander continue.171 The import expenditure on food, including rice, has reached NPR 47.29 billion (USD 36.03 million). Furthermore, imports of agricultural and animal products have doubled in the past five years, amounting to NPR 341.51 billion (USD 2.6 billion) in the fiscal year 2022/23 AD (2079/80 BS). The lack of modernization, mechanization, and commercialization in agriculture has hindered domestic production, leading to the increasing dependence on imported agricultural products.172

Import of Essential Vegetables On Halt

Nepal is facing a potential shortage of potatoes and onions as traders have stopped importing these after the government imposed a 13% value-added tax (VAT) on them. The move, aimed at discouraging imports, has led to a significant increase in prices. In the FY 2021/22 AD (2078/79 BS), Nepal imported 173,829 tons of onions worth NPR 6 billion (USD 45.72 million) and 327,672 tons of potatoes worth NPR 8.18 billion (USD 62.33 million). The country's heavy reliance on imports reached a staggering NPR 400 billion (USD 3 billion) in agricultural imports alone, raising alarms about its self-sufficiency. Consumer rights activists argue that the government's revenuedriven tax policies are making life harder for inflation-stricken Nepalis, while experts emphasize the need for effective market monitoring to prevent price manipulation on the pretext of

taxes.173

Food and Beverage Price (CPI and WPI)

The year-on-year Consumer Price Index (CPI) for Food and Beverage as of mid-May 2023 stood at 5.54%. The CPI for cereal grains and their products increased to 13.69%, milk products and eggs to 10.41% and tobacco products to 8.49%.174 Whereas, the year-on-year wholesale price inflation increased to 3.31 from 16.06% in the previous year.175 The increase in the price of necessary commodities is due to the depreciation of the Nepali Rupee against the convertible currencies; low exports; and moderation in remittance growth for the fiscal year 2022/23 AD (2079/80 BS).176

LIVESTOCK UPDATES

Lumpy Skin Epidemic Claims 9410 Cattle

The lumpy skin disease epidemic has wreaked havoc on dairy and livestock farmers across various districts in Nepal. In Panchthar district, a single farmer incurred a loss of approximately NPR 100,000 (USD 762) after his Holstein heifer succumbed to the disease. Reports indicate that the disease has spread throughout Koshi Province, with Ilam district being the hardest hit. In the current fiscal year, the province has witnessed the death of 1129 cows and 3 buffalos, with a total of 85,784 livestock falling ill. Notably, the number of affected cows stands at 85,297, while buffalos account for 487 cases.

Salyan district in Karnali Province has also been severely affected, with 1200 cattle deaths and around 31,000 cases of infection reported. The situation is dire in Humla as well, where 1005 cattle have died. Overall, the epidemic has impacted an estimated 60% of the two million cattle in Karnali Province, leading to significant challenges for farmers and their livelihoods. Efforts are underway to control the outbreak through vaccination campaigns and awareness initiatives, with discussions on compensating affected farmers. Additionally, the Nepal Dairy Association has called upon the government at all levels to prioritize addressing the crisis and extending support to the affected farmers.177

Affected Farmers Receive BirdFlu Compensation

Farmers in Chitwan district affected by the H5N1 bird flu outbreak have started receiving compensation from the federal government. The infection was detected between October 29, 2021, and June 21, 2022 after which the government allocated NPR 319.13 million (USD 1.2 million) for compensation. This covers up to 75% of the total losses. So far, 37 farms have qualified for compensation, while others face issues with duplication or incomplete documentation. The outbreak led to the culling of 372,612 poultry, including 35,811 layer chickens, and the destruction of 94,728 kg of poultry feed, 6,300 turkey eggs, 120 kg of turkey meat, and 40 kg of chicken meat.178

GOVERNMENT PLANS UPDATES

Sahaj Challenge Fund Launched to Promote Agri-Business

The Sahaj Challenge Fund Round 3 was launched in Kathmandu with the aim of promoting agri-business in Nepal. The project is funded by the Swiss Agency for Development and Cooperation (SDC) and the Nepal Agricultural Market Development Programme (NAMDP). The fund will support innovative solutions for addressing challenges in branding, packaging, and distribution channels in the value chains of maize, cardamom, vegetables, and dairy products. Financial support ranging from NPR 500,000 (USD 3810) to NPR 5 million (USD 0.381 million) per project will be provided to develop pilot business models and tailored solutions in the Koshi Province. However, equipment purchase will not be supported, but technical assistance will be provided if needed. The application deadline for the project is June 20, and Practical Action Consulting will serve as the implementing partner.179

Subsidized Agriculture Equipment Distributed by Pokhara Metropolitan City

The Pokhara Metropolitan City (PMC) in Kaski, Nepal, has distributed subsidized agricultural equipment to local farmers. The equipment, including hand tractors, combined mills, thrashers, grass cutters, power sprays, oil crushers, and other machinery, was provided on a

50% subsidy from the budget of FY 2022/23 AD (2079/80 BS).180 The distribution was organized by the Agriculture Development Division of PMC in response to the demands of farmers from 25 wards. The initiative aims to increase production, reduce costs, and promote the use of modern machinery in agriculture. Farmers have welcomed the support, highlighting the benefits of saving time and expenses in their farming activities.

MOALD Receives NPR 58.98 billion (USD 44.94 million) from the Budget

The Ministry of Agriculture and Livestock Development (MOALD) in Nepal has received a budget allocation of NPR 58.98 billion (USD 44.94 million) for the fiscal year 2023/24 AD (2080/81), an increase from the previous year's budget of NPR 55.97 billion (USD 42.67 million). The government aims to promote the agriculture sector through technical services supporting production. However, the budget for the Agricultural Modernization Project has been reduced to NPR 3.22 billion (USD 24.53 million) from the previous year's NPR 5.9 billion (USD 44.96 million). Additionally, NPR 950 million (USD 0.723 million) has been allocated for agricultural insurance, with an 80% subsidy on the total insurance fee.181 Furthermore, NPR 1.25 billion (USD 9.5 million) has been set aside to encourage startups in the agriculture sector, emphasizing the importance of innovation and entrepreneurship. These budget decisions reflect the government's commitment

to strengthening the agriculture sector and fostering innovation in Nepal.

Outlook

Moving forward, addressing the challenges faced by farmers in combating climate change issues is crucial. Immediate assistance is needed to mitigate the impact of water scarcity and support farmers in sustaining their income. The Government of Nepal has already taken steps like distributing agricultural equipment to farmers, but further efforts should be made to improve irrigation systems and explore alternative water sources for crop survival and growth.

In addition to addressing water scarcity, it is important to tackle the broader challenges faced by the agricultural sector in Nepal. For the same, continued investments in technological advancements and input supply chains are essential to sustainably improve food production. Moreover, recent efforts have resulted in increased export opportunities, highlighting the potential for further growth in the sector. Priority should be given to investments in infrastructure, such as irrigation, transportation, and storage facilities, which will further contribute to the overall development of the sector. Similarly, promoting modern farming techniques, providing farmers with access to credit and market information, and strengthening agricultural research and extension services are crucial components of a comprehensive approach.

Education

During the review period, Nepal saw a shift in trend towards holistic development with a growing focus on technical skills and extracurricular activities in the education system. However, it faced significant challenges regarding public perception, awareness, and quality of education. The public education sector, including public higher education institutions, saw alarmingly low levels of enrollment, with people preferring model schools and private schools. Some local governments have attempted to rectify the situation by having accountability mechanisms to ensure improved quality of education in community schools. The government also recognized significant exclusionary gaps in Nepal’s current education system, which the budget for the fiscal year 2080/81 BS (2023/24 AD) has attempted to remedy by having provisions to bridge geographical and socioeconomic gaps.

KEY DEVELOPMENTS

Kathmandu Metropolitan City Introduces Textbook-Free Fridays

Kathmandu Metropolitan City (KMC) implemented a “Book-Free Friday” campaign in April 2023 to ensure students are engaged in extra-curricular activities (ECAs) and learn practical life skills. For the pilot project, students from 56 community schools in the city have been attending schools on Fridays without books or bags to partake in various ECAs.187 Under the initiative, students from grades 9 to 12 are involved in optional-short term courses for developing technical skills in various topics including agriculture, woodwork, culinary arts, plumbing, and many more.188 While this is a decision welcomed by educators,

students, and guardians alike, there have been concerns regarding the implementation. The short timeframe given to the schools caused confusion in adjusting the required credit hours if classes could not be held on Fridays. Further, many school operators felt they do not have the infrastructure for such activities and had to seek out external partners to provide such services to the students.189

Private Schools Urged to Provide Scholarship Details

KMC has asked the 500 private schools in the metropolis to provide details of scholarships that have been given to their students up to grade 10.190 As per KMC’s Education Management Regulation, schools are required to provide scholarships to 10% of its students, mainly those belonging to poor socioeconomic

FACTSHEET

Mean years of schooling182 5.1

Net enrolment rate at secondary level (class 9–12)183 54.03%

Retention rate up to grade 12184 35.6%

Literacy rate (5 years and above)185 76.2%

Estimated gender equality indicator (based on the secondary net enrolment rate)186 1

and marginalized groups.191 However, several schools have not submitted the aforementioned details despite repeated warnings. KMC has stated that the schools will be fined and could lose their license if they continue breaching the rules.192 There are approximately 15,000 students in the metropolis who can benefit from the scholarship program being implemented. According to KMC, this is the first time the schools have been asked to provide such details to the local level.193

Principals of Pokhara Community Schools Sign Performance Contract

Pokhara Metropolitan City has signed contracts with community school principals to improve and ensure the quality of education provided. The 28-point contract will serve as an accountability

mechanism, holding the school administrations responsible for achieving the goals. Among other things, the contract has requested schools to fill vacant teacher positions within a month; operate schools for 220 days in a year (including at least 192 days of teaching-learning activities); and increase enrollment and retention rates at the basic level. Further, teachers will be preparing and implementing a five-year school reform plan and one year's lesson/teaching reform plan. The contract has also emphasized making textbooks available to students on time.194 Long delays in the distribution of textbooks has been a recurring issue, causing significant hardships to students. However, students have been able to receive textbooks on time this year, with assistance from the private sector.195

Schools Continue Taking Entrance Examinations Despite Government Directions

In the previous quarter, the government had directed schools to not take entrance exams from the students looking to enroll in the first grade. They stated that competitive examinations were not good for young children.196 However, some community schools, that have been declared “model schools” by the government, have had to resort to the examinations due to having more student applications than their capacity. They are believed to provide better education at an affordable rate, which drives their popularity among guardians looking to enroll their children. This has required them to restrict enrollment through tests and written examinations for selecting

students. The administration of such schools have stated that such examinations and evaluation mechanisms are required to be able to maintain quality education.197

Online Issuing of No Objection Certificates

The Ministry of Education, Science, and Technology has introduced online arrangements for issuing No Objection Certificates (NOCs). While partial online services for the NOC were available since August 2020, students are able to access the service fully online since May 2023.198 They can now apply for, pay for, and print the NOC on their own, which makes it much simpler and less time-consuming than the previous cumbersome process where students would fill out the application online to receive a date to visit the branch to collect their NOCs manually.199

EDUCATION LIMITATIONS

Nepali Universities Facing Declining Enrollment Rates

The number of students has been drastically decreasing across multiple Nepali universities, with some courses struggling to have the required number of students to run classes. For instance, the number of students in the constituent and affiliated colleges of Tribhuvan University has been declining for a few years. It has prompted them to seek merger applications from interested colleges as dozens of colleges struggle to sustain themselves due to low enrollment.200 Kathmandu University (KU),

despite being a relatively reputed college in the country, has found itself considering shutting down some of its programs after 40% of its seats remained vacant. Out of the 200 programs under KU’s seven schools, only the School of Law has seen full enrollment.201 All streams across multiple colleges have been affected, including management and engineering, which usually have high competition for admission. This trend has been attributed to the increasing number of students opting for further education abroad due to the political and economic instability in the country. Further, many courses offered have not been designed as per the demand and have not been updated to include the latest developments in their respective fields, disadvantaging the students when competing globally for employment opportunities.202

Rural Community Schools at Risk of Closure

In Nepal, out of the total 40,656 schools, 33,762 or around 80% are community schools.203 Despite this, many community schools across the nation in remote areas are seeing low enrollment. According to the 60th Annual Report of the Office of the Auditor General, 2021 saw a decline of 20.1% in enrollments at the basic level (grades 1–5) compared to 2017.204 The lack of new enrollments has put some community schools on the verge of closure, and others have been faced to reduce or merge their services. Further, the downscale or closure process is handled without prioritizing the transfer of current students, which has

disrupted their education.205 For instance, Pyuthan Municipality has had to downscale the community school, which used to previously run classes up to fifth grade, to run classes up to third grade, which has made parents warier of enrolling their children in the community schools.206 Similarly, Tamakoshi Rural Municipality in Ramechhap will need to close or downscale 23 out of its 48 community schools after being unable to compete with the private schools.207 Multiple other rural community schools have been facing similar issues, including in Illam, Terathum, Bhojpur, Darchula, and Gorkha, as they often do not have the financial and human resources to manage and monitor educational institutions, unlike private schools. Further, many families have been migrating to urban areas, which has reduced the number of prospective pupils available in these areas.208

Socioeconomic and Institutional Barriers Depriving Children of Education

Communities in Nepal still face institutional and social barriers preventing the country from reaching its complete literacy goal. One such significant barrier is that some children from marginalized groups are unable to get admission into schools as their parents do not have citizenship certificates. The Musahar community from Mahadeva Rural Municipality-4 is an example of such a case. The poverty of the community adds another layer of complexity as many families are unable to afford the nominal charges of public schools. Further, some

do not see education as an advantageous investment as they do not see their children making any progress and doubt the quality of education they receive.209

71.5% of Candidates Fail the Engineering Exam

A majority of the students who gave the licensing examination created by the Nepal Engineering Council (NEC) have failed. Only 565 examinees of the total 1,981 were able to pass, putting the rate of failure at 71.5%. The tests did not have any provision for negative marking with officials stating that the paper was designed to make it easier for students. The high rate of failure signals a troubling decline in the quality of education in Nepali institutions.210 Only students who have passed the examinations can register themselves with the NEC to be able to professionally work as engineers. This is the first time NEC has conducted license examinations stating the important roles engineers play in the development and construction of a country.211 Before this, obtaining a Bachelor of Engineering degree would automatically entitle the graduate to an engineering license. Only in 2019 was the decision taken to make this licensing exam mandatory.

to the Ministry of Education, Science and Technology. It has emphasized making the education sector more inclusive of marginalized populations, geographically and socioeconomically. The budget speech has called for the mapping and redistribution of Early Childhood Education and Development (ECED) centers to provide quality pre-primary education to children from a young age. According to a report by UNICEF, economic and geographic difficulties are major barriers to enrolling children in ECED centers across the country, which disproportionately affects rural areas.212 The government has also decided to continue scholarships to marginalized, disabled, Dalit, and underprivileged students across the country. Further, housing scholarships have been included in a bid to increase the retention rate of students from Himalayan and remote areas. In addition to such measures, NPR 1.42 billion (USD 10.82 million) has been allocated to continue the free distribution of sanitary pads to female students to encourage a more inclusive and sanitary environment.213

Infrastructure Development Plans in Rural Schools

PLANS AND PROGRAMS Budget for Upcoming Fiscal Year Emphasizes Inclusivity

The budget for FY 2023/24 AD (2080/81 BS) has allocated NPR 197.29 billion (USD 1.50 billion)

For FY 2023/24 AD (2080/81 BS), the President's Educational Reform Program will focus on constructing school buildings with modern technical infrastructure for 1200 community schools to enhance the quality of education. Further, conditional grants will be provided to the local level government for the infrastructure development of

schools. The budget has also announced the establishment of residential schools in Dhankuta, Bardibas, Tansen, Surkhet, and Dadeldhura, which are remote and mountainous areas. The government hopes to increase access to quality education with this decision.214

Midday Meals to be Continued

The government has allocated NPR 8.45 billion (USD 64.39 million) to continue the midday meal program for children studying in community schools. The budget has further accentuated that the program will be providing nutritious food prepared from local and regional agricultural produce, and junk food will not be allowed.215 In the previous quarter, the program

Outlook

had not seen much effectiveness with many schools being unable to provide regular, nutritious meals as planned. They had not been able to achieve significant improvements in student absenteeism rates. However, in the current quarter, some rural municipalities have reported significant progress. For example, the program has recently started see results in multiple schools in Dang, facilitating better learning and a decrease in student absenteeism.216

Nepal Receives Foreign Aid to Strengthen School Sector

The government and the World Bank have signed an agreement for a USD 120 million (NPR 15.75 billion) concessional loan from the International Development

Association and a USD 19.7 million (NPR 2.58 billion) grant agreement from the Global Partnership for Education for operating the School Sector Transformation Program (SSTP). The program aims to improve foundational skills in students through the implementation of the national integrated curriculum in early grades and to address learning losses caused by the pandemic and other disasters. The SSTP also targets strengthening and teachinglearning in classrooms, and the development of green, resilient, and inclusive classrooms.217 Besides this, the government has accepted a European Union grant aid of EUR 50 million (NPR 7.11 billion) for implementation of its School Education Sector Plan.218

The high rates of failure and declining enrollment in the education system highlight the pressing need for comprehensive improvements. Many individuals are now opting for expensive private institutions and foreign colleges in search of quality education and better opportunities. However, the continued competition for seats in model community schools suggests that enhancing the teaching-learning process, along with infrastructure and resource development, could help rebuild trust in public Nepali schools. The implementation of performance contracts in Pokhara Metropolitan City, which outline specific goals and hold school administrations accountable, could be instrumental in fostering progress in community schools. The budget for FY 2080/81 BS (2023/24 AD) further emphasizes the strengthening of the education sector and promoting inclusivity. Upgrading community schools with modern infrastructure, establishing residential model schools in remote areas with geographical challenges, and providing free sanitary products to female students will hopefully contribute to making quality education accessible. Additionally, there is a need to revise laws to accommodate marginalized families without citizenship records and raise awareness about educational opportunities and financial resources, such as scholarships, available to them. KMC’s decision to seek details of scholarships being provided, while welcome, requires further strict monitoring and checking to ensure that recipients of the scholarships are the intended demographic. While these decisions and programs demonstrate support for inclusivity and sector strengthening, curriculum updates and a pedagogical shift are necessary. The recent focus on promoting technical skills and extracurricular activities is a positive step, but rigorous monitoring and implementation at every stage are crucial for success.

Energy and Environment

The latest economic survey of Nepal illustrates that the country has become self-sufficient in electricity generation due to progressive policies and increased investment in the hydropower sector. Electricity has reached 95% of the population in the country and 75 districts out of 77 across the country are connected to the national grid.219 Compared to June 2022, electricity generation increased by 21.7% to 2,666 Megawatts (MW) in February of 2023. In the same period, per capita energy consumption increased from 325 Kilowatthours (kWh) to 351 kWh. In order to reduce the amount of imported fuel, the government aims to increase

FACTSHEET

Total Petroleum Product Imports (nine months of FY 2022/23 AD, 2079/80 BS)

USD 1.56 billion220

Total Energy Generated 2666 MW (2022/23)221

Peak Energy Demand (May 2023) 1939 MW222

Peak Energy Generation(May 2023)

1320 MW223

Peak Energy Import from India (May 2023)

674 MW224

Energy Consumption Per Capita 351 kWh (2022/23)225

domestic electricity consumption to 450 kWh per capita. However, the new budget introduces new taxes and increased custom and excise duties on electric vehicles (EVs) which could dampen the increase in usage of EVs observed in the last fiscal period.

POLLUTION AND EMISSIONS

Increased Taxation on Electric Vehicles

The Government of Nepal has

introduced a presumptive tax on electric vehicles (EVs) from FY 2023/24 AD (2080/2081 BS).

According to the budget speech, the tax will be levied according to the EV’s battery capacity in kilowatts (kW) ranging from NPR 3,000 (USD 22.86) to NPR 7,500

(USD 57.14) for EVs with less than 50 kW capacity and more than 200 kW capacity battery respectively.

Electronic Vehicle Battery Capacity (kW) Tax for FY 2023/24 AD (2080/81 BS) (NPR)

Table 9. Increase in EV taxes in FY 2023/24 AD (2080/81 BS) (in NPR)

Source: FY 2023/24

schedule for electric vehicles according to their battery capacity.

The government has also increased the customs duty on electric cars, jeeps, and vans on the basis of battery capacity. The percentage of customs duty has increased for every category of EVs except those in the 200 - 300 kW battery

capacity range, for which the rate has decreased from 45% to 40%. Additionally, the excise duty schedule has changed for the new fiscal year. The 50 - 100 KW battery capacity range was previously exempt from excise duty but will be subject to a 10%

tariff for the fiscal year 2023/24 AD (2080/2081 BS). On the other hand, those in the 100 - 200 kW range are subject to a decreased excise duty of 20%, compared to 30% last fiscal year.226

In FY 2022/23 AD (2079/80 BS), 2,882 electric vehicles between 50 kW - 100 kW were imported, 66 between 101 kW - 200 kW, and 6 between 201 kW - 300 kW.227 As most of the EVs purchased are between 50kW-100kW, the government has increased taxes in this category to fill the gap of potential revenue losses. However, this could negatively impact the government’s target of increasing EV usage up to 25% by 2025 and 90% by 2030.228

Deteriorating Air Quality of Kathmandu Valley

The dry season during this review period and the increased occurrence of forest fires led to Kathmandu Valley repeatedly ranking number one in the world in daily air pollution measurements.

After a prolonged period without adequate rainfall in March, the valley experienced consistently high levels of particulate matter (PM) 2.5 concentration that is over 10 times the World Health Organization’s (WHO) recommended guideline values.229 IQ Air, an air quality technology company based in Switzerland, calculated an Air Quality Index (AQI) of 181 for Kathmandu Valley on March 16. According to the AQI, an index below 50 is considered healthy, 51-100 moderate, 101150 unhealthy for sensitive groups, 151-200 unhealthy for all, and 201-300 very unhealthy. Calculated based on US AQI parameters, the index measures the concentration of both PM2.5 and PM10, the smallest particulate matter sizes contaminating

our air from sources such as vehicular emissions, fumes, brick-kiln emissions, forest fires, dust, et cetera. These fine particulate matter pollutants can travel through our airways deep into our lungs and bloodstream. They cause many adverse health effects and are inhalable even through the use of surgical masks, commonly used by valley residents in hopes of gaining some protection against dust and pollution.

Air quality worsens in the valley and around the country between February and May, the dry season of Nepal, during which the majority of forest fires occur.230 1,196 wildfires were recorded in different locations of Nepal in the five months leading up to May. As smoke and haze from nearby

Table 10. Changes in customs duty and excise duty on EVs

Source: FY 2023/24 Customs duty and excise duty for electric vehicles.

and transboundary forest fires settled into the dry, bowl-shaped landscape, the valley recorded another high AQI reading of 216 on April 16.231 With climate and human-induced forest fires increasing every year, air quality, environmental protection, and public health concerns are further exacerbated in Nepal. Institutional mechanisms, adequate budgets, accurate data, and skilled human resources need to be allocated to address this growing crisis.

Bagmati River Improvement

Under the Bagmati River Basin Improvement Project, an additional 0.95-kilometer stretch of the river was supported with dams and beautified with adjacent green spaces during the fiscal year 2022/23 AD (2079/80 BS) by March 2023.232 Some of the key works carried out were riverbank stabilization, enhancement and management of riparian banks, and removal and safe disposal of accumulated sediments and pollutants at key sites.233 With that, a total of 12.5 kilometers of river control work on the Bagmati River has been completed. In addition, the construction of the Dhap Dam, built with the aim of maintaining minimum flow in the Bagmati River even during the dry season, was completed. The dam is now fully operational.

Banchare Danda Landfill Operational but Mismanaged

The construction of Cell 1 of the first phase of the Banchare Danda Landfill site, parts of which were still undergoing construction until March 2023, has been completed

and waste transportation to the site has commenced.234 The work of Cell 2 under the same program is in the final stage and the construction of an embankment dam for the second phase has been completed. However, the operation of the dumping site has not been moving according to plans. According to a report from the Office of the Auditor General, the on-site inspection of the landfill revealed that many standard procedures were not in place and technical monitoring and sanitary operating practices were not observed.235 Due to the lack of waste compaction, the garbage dumped at the site piled 25 meters above the dam height. Furthermore, the ponds that collect and circulate contaminated water from the landfill are nearly full. A long disruption in electricity could risk an overflow of the liquid and contamination of the river near the site.

In response to the ineffective waste management, locals have prevented garbage trucks from reaching the landfill site until immediate action is taken to effectively manage waste and remove the stench that comes with it.236 While negotiation efforts from all three parties involved are in works, a concrete solution has not been achieved237

PLANS AND PROGRAMS Budget Priorities and Allocation

The national budget has outlined ten priorities for the fiscal year 2023/24 AD (2080/81 BS). These priority areas cover, among other things, the development

of the energy sector, the promotion of a digital and green economy, environmental protection, climate change, and disaster management.238 A total of NPR 87.45 billion (USD 666 million) has been allocated to the Ministry of Energy, Water Resources, and Irrigation, of which NPR 38.32 billion (USD 292 million) is allocated for upgrading and improving the electricity distribution systems. Similarly, NPR 15.56 billion (USD 118 million) has been allocated to the Ministry of Forests and Environment, up from NPR 13 billion (USD 99 million) for the previous fiscal year.239 NPR 1.05 billion (USD 8 million) has also been allocated to the President Chure Region Protection Program. Within this, the government plans to tie forest and green areas with livelihood development through agroforestry programs that will utilize barren fields, degraded forests, and floodplains to cultivate fruits, herbs, grasses, and shrubs. The federal government will also coordinate with the provincial government to plant 30 million trees in the coming fiscal year. As expanded in an earlier section, the budget has also introduced presumptive tax and increased custom and excise duties on EVs.

Free Electricity to Electrify Cooking

Alongside poor outdoor air quality, approximately 69% of households in Nepal also suffer from poor ambient air quality as a result of using open-fire stoves and solid fuels for cooking.240 The emissions from this type of traditional cooking contribute to climate change and have negative impacts on health,

particularly those of women and girls who take up the majority of meal preparation duties. The use of Liquified Petroleum Gas (LPG), though better from an ambient air quality perspective, would increase reliance on already high imports from India and contribute to rising emissions in Nepal. Thus, in line with the Sustainable Development Goal (SDG) 3 of good health and wellbeing, SDG 7 of affordable and clean energy, as well as SDG 13 of climate action, the Government of Nepal is committed to achieving universal access to clean cooking by 2030. Many Nepalis, however, are not keen on alternative cooking methods. They have free or cheap access to timber from community forests whereas using electric stoves would require paying for electricity which is also viewed as unreliable. In order to encourage and facilitate the transition toward clean cooking, the government announced on May 19, 2023, that it would provide free electricity to households for up to 50 units per month during the rainy season and up to 30 units per month during the dry season.241 With the country now having surplus electricity generation, the reliability of electricity supply and the provision of free electricity by the government, along with other measures such as the distribution of electric stoves to disadvantaged groups, will help accelerate the adoption of clean cooking in Nepal.242

Call for Proposals to Develop a National SLCP and Methane Roadmap

The Climate and Clean Air Coalition (CCAC), an international

body that is working to reduce air pollutants, has been supporting the Ministry of Forests and Environment (MoFE) in strengthening the capacity of ministries to assess and reduce short-lived climate pollutant (SLCP) emissions. For this, the CCAC put out a Call for Proposals inviting applications to scope a project that would assist the government in developing a National SLCP Plan and a National Methane Roadmap.243 The project would help integrate measures to reduce SLCP emissions and the country’s methane targets for the Global Methane Pledge into the 2025 Nationally Determined Contributions (NDC) update. The project’s research, assessment, capacity building, and practice work will also inform existing plans and policies including the NDC implementation plan and the National Action Plan (NAP). With an estimated budget of USD 212,500 (NPR 27.88 million), the project is expected to be completed within two years. The application was opened on April 12 and closed on May 23, 2023.

Agreements on Nepal-India Petroleum Pipelines Trade Deficit and Climate Commitments

During his four-day official visit to India from May 31 to June 3, Prime Minister Pushpa Kamal Dahal guided the signing of seven key agreements between Nepal and India with his Indian counterpart, Narendra Modi.244 Among those is the construction of two crossborder petroleum pipelines and three petroleum storage depots.245 As per the agreement, a petroleum pipeline will be constructed from Siliguri, India

to Jhapa, Nepal, and a storage depot will be constructed in Charali, Jhapa with a capacity of 42,000 kiloliters (kL). The existing Motihari-Amlekhganj crossborder pipeline is also set to be extended to Lothar, Chitwan, where another storage terminal with a capacity of 103,150 kL will be constructed.246 According to the Nepal Oil Corporation, a third storage depot is also being constructed at Amlekhgunj. It will constitute four storage tanks with a combined capacity of 18,000 kL, of which two 4100 kL tanks are being built by the Indian Oil Corporation.247 The construction of additional pipelines and fuel storage depots will reduce the supply cost of fuel and build a strategic reserve to sustain the demand for fuel in case of supply disruptions such as during the 2015 Indian border blockade. However, the agreement sparked outrage amongst experts, former government officials, and activists across sectors who have decried the proposed plans as going directly against Nepal’s economic interests as well as climate and environmental commitments.248 Petroleum products account for the largest proportion of Nepal’s imports and significantly contribute to the country’s trade deficit which amounted to NPR 1.2 trillion (USD 9.14 billion) in the first 10 months of the fiscal year 2022/23 AD (2079/80 BS).249 Signing new agreements and formulating plans to sustain and increase the dependency on imported fuel instead of decreasing it, particularly in the context of the country’s wasted surplus electricity, not only makes for a regressive economic plan but also undermines Nepal’s energy

and climate security.

Nepal

to Inject an Additional USD 97 Million (NPR 12.7 billion) Into MCC Compact

The Government of Nepal ratified the long-delayed Millennium Challenge Corporation (MCC)Compact in February 2022. As part of the compact, MCC agreed to provide USD 500 million (NPR 65.6 billion) for the implementation of various projects while the government committed USD 130 million (NPR 17.06 billion). With the new budget for FY 2023/24 AD (2080/81 BS), the government has pledged to inject an additional USD 67 million (NPR 8.79 billion), bringing its total contribution to the MCC projects to USD 197 million (NPR 25.85 billion).250 The compact includes the construction of a 400 kV transmission line as well as upgrading a section of the Mahendra (East-West) highway. According to the Millennium Challenge Account-Nepal (MCANepal), Nepal Electricity Authority (NEA) had requested to include additional components under the Electricity Transmission Project of the Compact. The government committed the additional funding to cover the estimated shortfall in the construction of the crossborder transmission line between Nepal and India as well as any further scope of work for three sub-stations. The additional work will be financed from the original Compact budget and any gap thereon will be financed by NEA.

HYDROPOWER

Additional 100 MW to be Added to the National Grid

Nepal Electricity Authority (NEA) is continuing the construction of the 111 MW Rasuwagadhi Hydroelectric Project, the 102 MW Madhya Bhotekoshi Hydroelectric Project, and the 42.5 MW Sanjen Hydroelectric Project. These projects were expected to be completed by the end of FY 2022/23 AD (2079/80 BS); however, NEA failed to do so.251 The completion of these projects along with the underconstruction private sectorfunded hydroelectricity and solar power projects will add over 100 MW to the installed energy capacity.252 The government aims to increase the total electricity generation to 3600 MW by the end of FY 2023/24 AD (2080/81 BS).253

India to Construct Second Hydropower Project in Nepal

One of the seven aforementioned agreements signed between Nepal and India during Prime Minister Pushpa Kamal Dahal’s visit to India in early June is the awarding of the 679 MW Lower Arun Hydropower project to India’s state-owned Satluj Jal Vidyut Nigam (SVJN) Limited. It is the second hydropower project to be constructed by India in Nepal. The first project awarded to India was the under-construction 900 MW Arun-III hydroelectric project which will feed water to the Lower Arun through its tailrace.254 Both projects were agreed upon under the build-own-operatetransfer (BOOT) model, which allows the construction company to operate it for 25 years after the five-year construction period before transferring ownership to the Nepal government. 21.9% of the electricity generated by the

Arun-III will be provided free of cost to Nepal during the 25 years of commercial operation and the company will pay NPR 107 billion (USD 815 million) in royalties in the same period.255

Bangladesh Buys Power from Nepal, Invests in Sunkoshi-3

Bilateral talks on energy cooperation were held between Nepal and Bangladesh on May 16 during which the two countries agreed to trade electricity from June 2023.256 The Joint Steering Committee will work to bring NTPC Vidyut Vyapar Nigam Limited (NVVN) of India on board to finalize a tripartite agreement with Nepal Electricity Authority (NEA) and Bangladesh Power Development Board (BPDB) to commence power trading. The fourth meeting of the Joint Working Group and Joint Steering Committee held in August 2022 had agreed to request India to facilitate the export of 40-50 MW of electricity from Nepal to Bangladesh using the Baharampur-Bheramara crossborder transmission line. NEA has submitted a request to Indian authorities through NVVN to use India’s transmission lines, existing and new, to sell electricity generated by the 52.4 MW Likhu-4 project to Banglades. India, however, has only agreed to allow the transmission of 40 MW.257 The steering committee also agreed to develop the 683 MW Sunkoshi-3 hydropower project with a joint investment from Nepal and Bangladesh. The two countries will work on a joint venture agreement for the same within the next six months. In addition, a power sale agreement is also being developed for Nepal

to sell 500 MW of electricity from the 900 MW Upper Karnali Hydropower Project to Bangladesh. Indian company Grandhi Mallikarjuna Rao (GMR), responsible for the project’s construction, has stated that it will expedite the signing of the tripartite agreement after a court verdict vacating an interim order to bar the company from working towards the project’s financial closure.

Efforts to Introduce the Hydropower Sustainability Standard in Nepal

Nepal Hydropower Association (NHA) partnered with the International Hydropower Association’s (IHA) Sustainability Team to conduct capacitybuilding training on the Hydropower Sustainability Standard (HSS).258 The training, conducted in association with an investment company Bizbell and supported by the Norwegian Agency for Development Cooperation, will help professionals in the Nepali hydropower industry introduce international sustainability standards and improve project performance in the country. Over 60 professionals were trained on how to evaluate and upgrade the sustainability performance of hydropower projects, make comprehensive reviews for informed decision-making, and attract green financing for projects. As hydropower is a crucial component of Nepal’s energy mix, the implementation of the HSS in Nepal will ensure power projects are socially and environmentally just. HSS’s implementation aligns with the country’s net zero targets and

can unlock new opportunities for investment.

TRADITIONAL ENERGY

Government Increases Diesel and Kerosene Prices

The Nepal Oil Corporation (NOC) reduced the price of petroleum goods on April 3, 2023.259 Price of petrol was reduced by NPR 3 (USD 0.023) per liter and diesel by NPR 10 (USD 0.076) per liter, the new prices standing at NPR 175 (USD 1.33) and NPR 165 (USD 1.26) per liter respectively. The corporation also reduced aviation turbine fuel prices. Aviation fuel sold to domestic airlines was reduced by NPR 10 (USD 0.076), bringing down costs to NPR 160 (USD 1.22) per liter. Whereas, aviation fuel sold to international airlines was brought down from USD 1.42 (NPR 186.33) per liter to USD 1.35 (NPR 177.15). The price of liquified petroleum gas remained unchanged, at the time of the press release, and stands at NPR 1800 (USD 13.72) per cylinder. On May 16, 2023, the NOC released a press statement notifying that diesel and kerosene prices were further reduced by NPR 10 (USD 0.076), bringing the cost of a liter of kerosene/diesel to NPR 155 (USD 1.18).260 The prices of petrol, aviation turbine fuel, and liquified petroleum products remain unchanged.

RENEWABLE ENERGY

Nepal Increases Renewable Energy Production

Nepal’s current electricity generation capacity stands at 2700 MW, exceeding the

current domestic demand of 2036 MW. Between mid-April 2022 and mid-March 2023, 32 private sector-run hydropower and solar plants supplied a total of 552.2 MW of electricity. 523.3 MW was produced by 28 hydropower plants while 28.8 MW was produced by 4 solar plants. Currently, six hydropower plants with 138.7 MW production capacity and three solar plants with 18.8 MW capacity are at the stage of test production.261

NREP Holds Orientation Events on Renewable Energy Across Municipalities

The Nepal Renewable Energy Programme (NREP), a Government of Nepal program funded by the British Embassy of Kathmandu, held orientation events that aimed to raise awareness on Renewable Energy (RE) sources to 316 local governments in Madhesh, Lumbini, and Karanali provinces.262 The one-day orientation program informed local government officials about the potential of RE in local development, the policy and regulatory procedures of RE development, and promoted the Sustainable Energy Challenge Fund (SECF). The SECF is a viability gap-based fund that provides financial and technical assistance to RE projects to ensure that they are operated sustainably and with financial feasibility.263

To ensure the reliability of renewable energy electrification in Nepal, it is imperative for the government in all three tiers to work and innovate together, which can only happen if there is an understanding of the topic

at hand. The orientation events alongside the SEFC are a right step forward in promoting local solutions to local problems.

NEW DEVELOPMENTS

Nepal Discusses New Air Routes and Access with India

During Pushpa Kamal Dahal’s visit to India, the re-elected Prime Minister of Nepal discussed the possibility of opening new air routes with Prime Minister Narendra Modi. Nepal requested extra entry points through Janakpur, Bhairahawa, Nepalgunj, and Mahendranagar.264 Indian officials seem positive to this request. However, a formal decision will be given after further discussions with the Indian Air Force. This request comes

Outlook

as Nepal has failed to bring tourists and travelers to its newly completed Gautam Buddha International Airport in Lumbini and Pokhara International Airport in Pokhara. The additional entry points will improve efficiency through reduced fuel consumption, reduced flight time (to and from the west) by 15 minutes, cheaper flights, and less carbon emissions.265

Kathmandu Hosts Eighth Edition of Power Summit

Independent Power Producers’ Association Nepal (IPPAN) organized Power Summit 2023 in Kathmandu from April 18-19. The two-day summit was the largest event in Nepal’s energy sector, posing as a hub for different stakeholders to propel forward the energy sector in Nepal. Over

800 participants ranging from government officials, producers, investors, policymakers, business owners, etc. from 30 different countries attended this event.266

Representatives from India, Bangladesh, Bhutan, and Sri Lanka participated in the event, however, Chinese companies showed little interest. There have been growing tensions between China, India, and Nepal as India refuses to buy electricity from projects developed with Chinese investments.267 As a result, Nepal has chosen to revoke several contracts with Chinese investors and instead awarded them to Indian investors, leading to a significant decline in Chinese interests within Nepal's hydroelectricity sector.268

Nepal is rapidly making progress towards self-sufficiency in electricity. With the operation of a few more projects nearing completion, domestic supply will outweigh demand, even during the dry season. In the wet season, the supply already exceeds demand, but due to insufficient Power Purchase Agreements (PPAs) and transmission line infrastructure, the surplus generation is wasted resulting in the loss of millions in potential revenue. With agreements being formulated on transmission infrastructure and power trading with India and Bangladesh, the country is taking steps to address this issue in order to stabilize domestic supply and increase power export. Despite making up the majority of electricity generation, hydropower is only around 2% of the overall energy mix of Nepal.269 The progress made with hydropower tends to overshadow the fact that Nepal still has significant work to do in order to ensure that renewable energy sources supply at least 15% of its total energy demand. To meet its enhanced Nationally Determined Contributions (NDCs) for the Paris Agreement, Nepal needs to urgently ramp up renewable energy projects. Given that earthquakes and climate-exacerbated natural disasters threaten the sustainability of hydropower, the prioritization of other commercially viable sources such as solar, wind, and bio-energy to diversify the country’s energy mix, would also ensure resiliency and consistency of future power supply.

Health

During the review period, Nepal witnessed a rise in the number of COVID-19 cases, mainly caused due to the new XBB.1.16 variant. Low uptakes of vaccinations heightened the risk of continued outbreaks of infectious diseases like measles and cholera. In addition to these, the health sector battled an increasing number of noncommunicable diseases caused due to a sedentary and unhealthy lifestyle. The government has conducted and planned various vaccination and awareness-raising campaigns to combat the existing health risks. Further, it has also made significant plans to increase the accessibility of quality healthcare facilities regardless of location and socio-economic status.

COVID-19 UPDATES AND HEALTH RISKS

Nepal Records

New COVID-19 Variant

The Ministry of Health and Population (MoHP) identified Omicron XBB.1.16. spreading in Nepal, which was the leading cause behind the surge in COVID-19 infections in midApril, 2023.276 While the severity of the variant was said to be low compared to its counterparts, elderlies and those with low immunity were considered highrisk and had been prioritized for vaccinations.277 A sudden surge of infections was mainly observed in people returning from India. This raised concerns about the uninterrupted cross-border movement. These concerns were further exacerbated due to

the absence of health desks in many Terai districts. Moreover, a majority of the polymerase chain reaction (PCR) laboratories set up in the districts had been closed for months due to which they were short on human resources to carry out testing efficiently.278

COVID Mandates Revised

The MoHP revised its COVID-19 mandates in early-June 2023 due to the steadily declining rate of the infection. According to the revisions made, it became no longer necessary to use face masks in public. Further, requirements for testing for infection and proof of vaccination were removed for international and national travelers. However, the monitoring and screening of traveler’s who are vulnerable to infection will be continued.279 The

lifting of the restrictions follows both the government and the public becoming less cautious of the virus due to low infection rates.

Low Uptakes for Vaccines Risk Outbreak of Different Diseases

According to the MoHP, Nepal suffers from low vaccine coverage with at least 4% of children aged 12–13 months having never been vaccinated—a rapid increase from the 1% in 2016. It has put the country at risk of massive outbreaks of vaccine-preventable diseases.280 In fact, Nepal recorded over a thousand cases of measles this year, even though it is a vaccinepreventable disease. As a result, MoHP launched a month-long vaccination program in midMay 2023 targeting infants

less than nine months in nine districts considered to be at high risk of measles. The districts are Bajura, Kanchanpur, Kailali, Surkhet, Bardiya, Dang, Mahottari, Morang, and Sunsari.281 A similar vaccination drive was launched against cholera in wards 11, 12 and 13 of the Kathmandu Metropolitan City after multiple cases were reported.282 However, of the 37,000-plus who were administered the first dose of the cholera vaccine, 14,000 missed the second dose. According to officials, low uptake of vaccines, including routine vaccines, has been a longstanding issue, especially in big and emerging cities where implementing health programs is more challenging.283

Timely Medical Intervention a Persistent Issue for Maternal Mortality

According to the National Census of 2021, Nepal’s maternal mortality rate is 151 per 100,000.284 In remote provinces like Karnali, a majority of maternal deaths are caused by a lack of access to health facilities and delayed medical intervention.285 To combat such issues, the President Women Upliftment Programme was implemented since 2017, under which pregnant women in remote areas receive free-of-cost emergency airlift services. However, the programme has faced issues regarding accessibility, timeliness, and a shortage of skilled human resources. Lumbini, a relatively more developed province, had the highest maternal mortality rate among all provinces at 207 per 100,000. Officials have stated that there is still an absence of well-equipped hospitals in

remote areas, as quality health services are concentrated in urban areas. To combat this, the Lumbini provincial government has allocated budgets to local units and district-level hospitals to make health facilities more accessible to pregnant women, but still faces issues regarding timely intervention and infrastructure.286

PLANS AND PROGRAMS

Government Prioritizes Making Healthcare Accessible

The government has allocated NPR 83.99 billion (USD 640.06 million) to the Ministry of Health for FY 2023/24 AD (FY 2080/81 BS). Out of this, NPR 1.28 billion (USD 9.75 million) has been assigned to mobilizing health centers at all local levels to provide free health facilities. The program will cover 98 different types of vaccines and medicine and will prioritize the purchase of medicines produced in Nepal. Similarly, the government has decided to continue the National Health Insurance Program and the monthly stipend of NPR 5000 (USD 38.10) given to patients with cancer, dialysis, spinal injury, head injury, sickles, and anemia. Further, the budget has also outlined the expansion of free services of early detection and treatment of cervical and breast cancer.287

Campaigns to Control Infectious and Vector-Borne Diseases

The government has planned a “search and destroy campaign” for mosquito larvae and nests during the pre-monsoon,

monsoon, and post-monsoon seasons in a bid to control dengue, Kala-azar, elephantiasis, and other vector-borne diseases. The budget also made similar allocations for the control and prevention of infectious diseases like COVID-19. Along with vaccination campaigns to help prevent the diseases from spreading, the programs also include spreading awareness at local levels. Further, the budget allocated NPR 460 million (USD 3.51 million) to the construction and operation of provincial infectious disease hospitals.288

Campaign to Ensure Medical Professionals in Rural Areas Continued

According to the Economic Survey for FY 2022/23 AD (FY 2080/81 BS), Nepal has 1.15 doctors per 1,000 people, which is higher than the benchmark of 1 doctor per 1,000 people set by the World Health Organization. However, Nepal has been persistently struggling due to attrition and unequal distribution of skilled medical professionals.289 In an attempt to retain healthcare workers and ensure quality service in public hospitals, the government has decided to continue its “One Doctor, One Health Institution” program in FY 2023/24 AD (2080/81 BS).290 However, medical professionals are reluctant to serve in remote areas of Nepal as the earning opportunities and facilities are not enough, especially compared to urban areas. This has led to over 70% of posts for specialist doctors in remote areas remaining vacant.291 Healthcare professionals have lamented that the government has failed to

consider their investments and efforts and has also been unable to provide sufficient incentives and protection. This has led to many healthcare professionals seeking employment opportunities in foreign countries as well, especially if they cannot see a career progression into a better environment.292

National Vitamin A and Deworming Pill Campaign Conducted

The government conducted a nationwide campaign to administer Vitamin A and deworming tablets to children on April 19 and 20, 2023. This is a government campaign that is generally conducted twice a year in April and October.293

The Vitamin A tablets were administered to children between six months and five years of age, while the deworming tablets were given to those aged one to five years. The campaign targeted a reach of 2.7 million children for Vitamin A, and 2.4 million children for the deworming tablet.294 The campaign aimed to tackle the issue of nutritional deficiency and malnutrition in children in the country, which has been more severe in rural areas due to natural disasters.295 Health officials have also stated that the coverage rate of the campaigns had been declining in the last few years, especially in big cities as families are reluctant to give health volunteers access to the children.296

HEALTH INFRASTRUCTURE Health Ministry Requests Assistance for Open-Air Fitness

Centre

The Department of Ayurveda and Alternative Medicine has requested the World Health Organization (WHO) for assistance in setting up free-of-cost open-air gyms in urban areas across Nepal. The outdoor gyms are a part of the department’s efforts to address the growing cases of noncommunicable diseases in the country. A 2019 report by the Nepal Health Research Council and the MoHP showed that 71.1% of deaths in Nepal were caused by non-communicable diseases. Cardiovascular diseases were ranked as the major cost of death, causing 24% of all deaths, closely followed by chronic respiratory diseases.297 The situation has not gotten better in recent years. Healthcare professionals have raised concerns about the growing cases of noncommunicable diseases, warning that obesity and other conditions caused by a sedentary lifestyle could lead to a public health crisis.298

Japan Hands Over Equipment to Bhaktapur Health Centre

The Government of Japan has distributed medical equipment to the Valley Health Centre run by the Laborer Women and Child Welfare Council in Suryabinayak Municipality, Bhaktapur. The project to install medical equipment for breast cancer, thyroid, and diabetes testing at the center was supported with USD 74,860 (NPR 9.82 million) under the Grant Assistance for Grassroots Human Security Projects (GGP). The center, which provides free diagnosis,

birth assistance, and basic medicines to the community, was previously unable to test for the aforementioned due to a lack of equipment.299

Super-speciality Cancer Diagnostic Tests Under Development

The National Public Health Laboratory (NPHL) has been working towards starting a superspeciality cancer diagnostic testing service. Currently, due to the lack of the service in Nepal, hospitals in the country need to send the samples to India for testing, which is time-consuming and expensive. Once the service is available in Nepal, patients will be able to receive the report faster and start the treatment process earlier as well. Further, Nepal will also be able to maintain a genomic database, which would facilitate more research on genetics and epidemiological studies.300

Government to Expand Capacity and Facilities in Public Hospitals

In the budget for the upcoming fiscal year, the government has emphasized capacity-building and expansion of services in public hospitals. Under this, the capacity of Sukraraj Tropical and Infectious Disease Hospital will be expanded to 300 beds. Further, the provincial infectious disease hospitals under construction in Pokhara, Surkhet, Doti, and Bharatpur are to be completed and put into operation in the upcoming year, for which NPR 460 million (USD 3.51 million) has been allocated. NPR 820 million (USD 6.25 million) has also

been allocated for the purchase of equipment for the hundred hospitals set to complete construction next year. The Burn Unit in Bir Hospital will also be upgraded to a fully-equipped burn center. Similarly, the Civil Service Hospital will be upgraded and developed as a specialized hospital.

68 Hospitals in Kathmandu Metropolitan City Warned of Closure

As per the Health Facility

Outlook

Operation Standards, 2077 BS, hospitals are required to allocate 10% of the total beds for free treatment of the poor, helpless and marginalized patients who seek treatment.301 Kathmandu Metropolitan City (KMC) had asked all hospitals in the metropolis to provide the details of the discount facilities they have provided. As a result of this, KMC submitted a list of 68 hospitals that failed to provide the details to the health minister, and urged for action to be taken against them.302 KMC Mayor

Balen Shah further stated that they would need to close the administration of the respective hospitals if the Health Ministry does not take action against them.303

The easing of COVID-19 restrictions by the government signifies a positive step towards national recovery and the return to normalcy. However, the decline in vaccination rates, especially in urban areas with a more educated and aware population, is alarming. Nepal has experienced outbreaks of various infectious diseases in the past and present quarters, highlighting the potential risk of such outbreaks becoming a recurring issue if the population remains passive towards vaccination. To combat this, the budget for the fiscal year 2023/24 AD (2080/81 BS) allocates substantial funds for vaccination campaigns and outbreak prevention programs. For it to be effective, however, the government should be able to establish health as a priority in the general population.

Currently, there is a seemingly general unawareness regarding healthy lifestyle and habits among the population which puts them at risk of both communicable and non-communicable diseases. Promoting the establishment of outdoor gyms and improving access to public healthcare facilities can play a significant role in spreading awareness about the issue. The government has made commendable strides in strengthening the public health sector by establishing new infrastructure in rural areas and enhancing existing facilities. This commitment extends to the upcoming quarter with investments in advanced cancer diagnostic tests and upgraded equipment for hospitals. However, addressing the shortage of medical professionals is crucial for building a resilient healthcare system. Incentives should be provided to encourage professionals to serve in rural areas and within the country rather than seeking opportunities abroad.

Information and Communication Technology

The landscape of Nepal's digital and telecommunications sectors is experiencing notable changes and developments. These ongoing developments reflect the country’s commitment to advancing its digital infrastructure and connectivity. As a pivotal driver of economic development and enhanced connectivity, the ICT industry is witnessing remarkable progress in terms of digital infrastructure expansion, increased internet penetration, and a thriving environment for technological entrepreneurship. Additionally, the Government of Nepal

FACTSHEET

Tele density 125.77%304

Internet data subscribers 38.86 million305

Number of smartphone users 36.71 million306

Internet penetration 133.14%307

ICT goods import as a % of total import 1.026 billion308

Total digital payment transaction NPR 4.145 trillion309

has implemented new taxation measures with a focus on increasing revenue and fostering the ICT sector of Nepal. With the government's focus on promoting digital literacy, entrepreneurship, and innovation, the ICT sector in Nepal is poised for further expansion, attracting investments, and playing a crucial role in shaping the country's future.

Figure 19. Market Share of Telephone Operators

Figure 20. Market Share of Internet Service Providers in Nepal

Source: NTA MIS Report Falgun 2079 (Mid-Feb to Mid-Mar 2023)

Foreign Digital Service Providers to be Taxed at 2%

According to the Fiscal Bill 2023/24 AD (2080/81 BS) proposed by the Ministry of Finance, individuals or entities involved in offering digital services will need to register and pay taxes on the income they generate in Nepal. The Inland Revenue Department (IRD) had previously announced the implementation of the Digital Service Tax (DST) starting from the fiscal year 2022/23 AD (2080/81 BS). This

required digital service providers like YouTube, Meta, Twitter, Netflix, and similar platforms to register and pay a 2% DST on their total transaction value in Nepal.310 However, it is important to note that transactions related to digital services amounting to NPR 2 million (USD 15,421) or less annually will be exempt from taxation under this provision.

Government to Raise Tax on Fiber Cable

From the fiscal year 2023/24

AD (2080/81 BS) onwards, the government intends to impose a 15% tax on imported fiber optic cables, which is a 5% increase compared to the existing tax rate of 10%. This tax increase came into effect on July 17, 2023. During a joint meeting at the federal parliament on May 29, the finance minister confirmed the decision to raise the tax on fiber cables in accordance with the new fiscal bill. Fiber cables are extensively utilized for fiber-tothe-home (FTTH) technology and have replaced copper wires as

Source: NTA MIS Report Falgun 2079 (Mid-Feb to MidMar 2023)

Figure 21. Growth Trend of Voice and Data Services

the primary means of providing internet services in Nepal.311

MDMS Implemented in Nepal

On May 15, Nepal introduced the Mobile Device Management System (MDMS) to regulate the usage of mobile phones. The MDMS requires the registration of IMEI numbers for phones imported from abroad, although there are certain exemptions for certain individuals. Recently, the Nepal Mobile Distributors Association (NMDA) asked for the immediate implementation of the MDMS to address the illegal mobile phone trade, which deprives the government of revenue and puts consumers at risk. The MDMS system currently shows over 8.61 million unregistered IMEI numbers, indicating that there are more than five million phones that entered the country without going through the necessary customs procedures. The government is currently undecided regarding the fate of these phones that are listed in the grey area.312 Meanwhile, unregistered phones will be deactivated after a period of 15 days. The government's indecisiveness has created confusion among users who are eagerly awaiting a final decision on the status of these phones.313

Government Wins Against Axiata Group

The Government of Nepal has won a case against Axiata Group, the parent company of Ncell, regarding the settlement of the capital gains tax. Axiata had filed a case in the International Centre for Settlement Disputes (ICSID) seeking damages of USD

500 million (NPR 65.6 billion) alleging that the government had breached a bilateral agreement and imposed unfair taxes. However, the ICSID, which was established by the World Bank, ruled in favor of the government, absolving Nepal from potential liability amounting to NPR 66 billion (USD 502 million).314 Although the government emerged as the overall winner, it might still be required to pay compensatory damages to Axiata for breaching agreement and imposing unfair taxes, the specific amount of which has yet to be determined. The dispute originated from the capital gains tax imposed by the government when Axiata acquired an 80% stake in Ncell. Axiata argued that the government violated a bilateral investment promotion and protection agreement between Nepal and the United Kingdom. Axiata had previously challenged the government's tax assessment in the Supreme Court, but the court ruled in favor of the government.

OTT Regulation Framework Draft Unveiled

The Nepal Telecommunication Authority (NTA) has developed a preliminary draft of a regulatory framework for over-the-top (OTT) platforms. The proposed regulation defines OTT as online services accessed and delivered over the internet that may be a direct technical or functional substitute for voice, video, and text messages. The scope of the regulation also covers video and audio content services.315 The draft proposes that registration should be mandatory for providing OTT services in Nepal,

including the establishment of a branch office or appointment of an intermediary. The proposed regulations also state that OTT providers must maintain security and privacy, including network security and data protection issues, and establish a Content Delivery Network (CDN) inside Nepal. The move to regulate OTT providers comes amidst concerns about regulatory imbalance, government tax, security threats, and revenue loss for telecommunications operators.

Government Prepares Bill to Amend Telecommunications Act

The proposed revisions to the Telecommunications Act of 1997 in Nepal have the potential to greatly impact both the telecommunications industry and privacy of consumers. The draft bill contains clauses that grant the government access to a service provider's systems in order to gather information about their customers and intercept individual conversations for investigative purposes. These provisions have faced criticism for their potential infringement on the right to privacy.316 The draft bill suggests reducing charges, royalties, and fees paid by telecom companies to the government. While this may offer relief to struggling telecom companies in meeting their tax obligations, it could result in a substantial loss of revenue for the government. These amendments could also facilitate the entry of new companies into the telecom industry, promoting competition and ultimately benefiting consumers.

ISPs to Maintain Internet Service Quality

Commencing in mid-April 2023, telecommunications and internet service providers in Nepal were required to adhere to a minimum standard of mobile and internet services, as stipulated by the Nepal Telecommunication Authority (NTA). Failure to maintain the promised quality of services may result in the authority revoking the service providers' license. Providers must conduct tests and measurements to assess service quality at various locations and submit reports to the authority on a quarterly basis.317 Additionally, the NTA has the authority to monitor and inspect these quality measurement reports and take appropriate actions if the service

providers fail to comply with the regulations regarding service quality.

Broadband Internet Reaches

6,743 Wards in Nepal

Broadband Internet service has effectively expanded to locallevel offices, ward offices, health centers, and community schools, facilitating connectivity in important community hubs. The density of Internet subscribers has reached 133.14%, indicating widespread availability of online services. Moreover, 72% of households now have access to digital television. Additionally, free Wi-Fi hotspots are accessible at religious and tourist sites. These developments underscore Nepal's dedication to improving digital infrastructure and

connectivity for its population.318

Government Achieves Internet Access Target

The Auditor General's 60th annual report, released on April 19, 2023, showed positive improvements in several indicators, including internet access. One of the major targets of the third year of the 15th five-year plan was to achieve 85% internet service access by 2022/23 AD, which was initially 65.9% in the base year 2016/17. As per the report, the 85% internet access target has been met. Nevertheless, the government still needs to work on the affordability of broadband (both fixed and mobile) in order to improve meaningful broadband access across the country.

Nepal's digital landscape is witnessing significant developments and progress. The government's implementation of the Digital Service Tax (DST) and its efforts to regulate the usage of mobile phones through the Mobile Device Management System (MDMS) demonstrate its commitment to fostering a fair and transparent digital ecosystem. Furthermore, the recent victory in the case against Axiata Group showcases Nepal's commitment to upholding tax regulations and protecting its interests. The unveiling of the OTT regulation framework and proposed amendments to the Telecommunications Act reflect the government's proactive approach to address regulatory concerns and promote healthy competition in the industry but might possibly cause privacy infringement. Additionally, the focus on maintaining internet service quality and the expansion of broadband connectivity to various community hubs highlights Nepal's dedication to providing reliable and accessible digital services to its citizens. With the achievement of the internet access target and ongoing efforts to improve affordability, Nepal can be self-assured to continue its positive trajectory towards a more inclusive and connected digital future.

Infrastructure and Real Estate

The 2080/81 BS (2023/24 AD) budget, which includes a sizeable allocation of funding for infrastructure projects, has had a considerable impact on Nepal's infrastructure and real estate sector in the current quarter. During the review period, significant accomplishments were noted, such as the start of a cable car service and highway upgradation. Other initiatives included the construction of a tunnel and substations. Additionally, the distribution of power via underground pipes has raised living conditions and stimulated economic development. However, there may be uncertainties regarding the government's target attainment for certain initiatives.

Budget Unveiled for Infrastructure Development

The budget for the upcoming fiscal year 2080/81 BS (2023/24 AD) allocated NPR 131.59 billion (USD 1 billion) to the Ministry of Infrastructure and Transport.320 The infrastructure budget features projects like the expansion of Mahendra highway (NPR 31.2 billion / USD 237 million) and the improvement of Puspalal (Mid Hill) highway (NPR 3.97 billion / USD 30 million).321 Funding has also been allocated for other national highways and roads such as and allocation of NPR 22.50 billion (USD 171 million) for the completion of the Fast Track road between Kathmandu and Terai by 2083 BS (2024/25 AD).322

Siddhababa Tunnel Project Preparation Begins

The Siddhababa tunnel project, with an estimated cost of NPR

7.34 billion (USD 55.93 million), has started its preliminary construction which includes making a portal and slope stabilization.323 Under the Engineering, Procurement, and Construction (EPC) approach, the project will be conducted by the China State Construction Engineering Corporation within a five-year completion window. The 1.12-kilometer-long tunnel is intended to reduce the significant danger of landslides in the region.324

Palpa-Butwal Cable Car Travel Commences

The Lumbini Cable Car, connecting Butwal in Rupandehi and Basantpur in Palpa has officially commenced its operations. The cable car project spans 3km and features 24 gondolas built with the project cost of NPR 3 billion (USD 22.8 million).325 With a capacity of transporting 6000 passengers a

FACTSHEET319

FY 2022/23 BS (FY 2079/80 AD) up to mid-March 2023

Total Length of Road 34100 km

New Road Constructed 104 km

Total Number of Bridges Constructed (in Numbers) 75

Construction of Railway 56 km

day, the cable car aims to attract Indian tourists from cities like Gorakhpur and Lucknow. The project also includes a zipline, swimming pool, children’s park, picnic area, and restaurants at the top station among other amenities. Additionally, the project is getting expanded with the construction of another cable car line from Butwal to Nuwakot Hill in Palpa.326

Dodhara-Chandani Dry Port Gets Environmental Approval

The Government of Nepal has approved the Environmental Impact Assessment (EIA) report for the proposed DodharaChandani dry port in Nepal’s far western region. The project, situated in Kanchanpur district’s Dodhara-Chandani Municipality, has been designated as a national priority project. Its construction cost will be funded by the Government of India. The dry port will provide Nepal

access to India’s largest seaport, Mumbai and will consist of parking, administrative offices, customs, banks, warehouses, and a long-term capability to hold 3,000 freight trucks. 327 The project's first phase is estimated to finish in three years and cost NPR 8 billion (USD 60.96 million). 328 The dry port would lower costs for Nepal's international trade; facilitate trade with Indian states including Rajasthan, Uttarakhand, Punjab, and Haryana; and support industrial growth in western Nepal.329

NEA to Build 20 Substations in Kathmandu Valley

The peak demand of electricity in the Kathmandu Valley is anticipated to be 3,100 MW in the upcoming winter, whereas the current transmission system can only deliver 500 MW. 330 Thus, to meet the anticipated power demand by 2050, substations with capabilities ranging from 400kV to 132kV will be constructed gradually. 331 Out of a total of 20, the Nepal Electricity Authority (NEA) is currently building eight high-capacity transmission line substations in the Kathmandu Valley. The plan also includes the construction of a 220kV transmission ring around the slopes of the valley and 132kV lines along river routes for electricity distribution332. However, there is considerable local opposition due to the fears of land encroachment as such projects require massive amounts of land. To quell such anxieties, NEA plans to use as little private land as possible. Furthermore, it has also started to build subterranean power lines

in the inner-city regions. 333

Karnali (Surkhet-Jumla) Highway in Dire Condition

The Surkhet-Jumla segment of the Karnali Highway, which is essential for the growth of the region, is in disrepair. The road was most recently resurfaced in 2012. But since then, it has gotten worse, developing cracks, potholes, and peeling asphalt. Due to the authorities' disregard, two bridges that were being built are now 12 years behind schedule. 334 The small, congested route that connects the districts of Surkhet, Dailekh, Kalikot, Jumla, and Mugu is merely a one-lane road in terms of width. The highway has not been extended or improved despite pledges made by political parties during elections. Unseasonal rains last year caused additional damage to the road, and locals have criticized the government for its negligence. Since its construction in 2007, the Karnali Highway has gained a reputation as a "death trap" over the years due to multiple incidents that have resulted in 209 fatalities. 335 Limited budgetary allocation will prevent road widening this year, although repair work is underway in flood and landslide-damaged sections.336

Lower Arun Hydropower Contracted by SJVN

The Lower Arun Hydroelectric Project, being developed by Satluj Jal Vidyut Nigam (SJVN), an Indian company, has been approved by the Investment Board of Nepal (IBN). The project has the capacity of 669 MW. 337

This is the third hydroelectric project offered to India after the Arun III and Arun IV projects. The lower Arun project is a tailrace type of hydropower and won’t feature a dam. All the projects on the Arun River combined will produce 2300 MW of energy. 338 According to the agreement with SJVN, Nepal will gain financially through sale of electricity and get a share of the energy produced. The act of giving the Lower Arun project to an Indian company is part of Nepal’s hydro diplomacy with India to sustain positive ties.339

Power Distribution Through Underground Line

The Nepal Electricity Authority (NEA) expects to distribute electricity using the underground transmission line system within two months in Kathmandu Valley. It seeks to transfer electricity through the Maharajgunj and Ratnapark distribution centers to areas in Ratnapark, Maharajgunj and Lazimpat. The Kirtipur region will also see an extension of the power supply. The current electric poles will remain for a few months as NEA plans to complete the underground system project in most places by winter.340

Mugling-Malekhu Road Being Upgraded

The 39-kilometer MuglingMalekhu road stretch in Nepal is being expanded and upgraded as part of the Nagdhunga-NaubiseMugling (NNM) Road Project (West Section). Sharma - ZICG JV has been given the construction contract, with the first phase concentrating on a five-

kilometer section. The project entails repaving 22 kilometers in Dhading and 17 kilometers in the Chitwan district. 341 In market areas, the road will include four to six lanes as well as sidewalks, road dividers, and electric poles.

Ten overhead bridges will also be built at various sites, and six river bridges will be built alongside the route. 342 The project, which is financially supported by the World Bank, has an estimated cost of NPR 4.8 billion (USD 36.58

Projects

Mahendra (East-West) Highway Expansion and Upgrade

Puspalal (Mid Hill) Highway Construction and Upgrade

Table 11. Budget Allocation for Infrastructure Projects 2080/81 BS (2023/24 AD)

Source: Budget of Nepal 2080/81

Outlook

million). 343 It prioritizes building barriers on riverbanks rather than digging hills in order to limit tree cutting.344

Budget Allocated

NPR 31.2 billion (USD 237 million)

NPR 3.96 billion (USD 30 million)

Postal Highway Construction and Upgrade NPR 3.49 billion (USD 26.6 million)

Kathmandu-Terai Fast Track Construction

NPR 22.50 billion (USD 171 million)

Kaligandaki Corridor Road Construction

Basantpur, Khurkot Smart City Upgrade

NPR 1.58 billion (USD 12.04 million)

NPR 2.19 billion (USD 16.7 million)

The infrastructure development of Nepal has a positive outlook with the initiation of new projects and the improvement of existing infrastructure. Projects like the development of the MuglingMalekhu road will create ease for the public who have been facing critical commute times due to the condition of the road. The inception of the Siddhababa tunnel project will also provide options for faster routes connecting to different places using the Siddhartha highway such as Palpa, Gulmi, Arghakhanchi, Syangja and Kaski. Given that the road from Dovan to Siddhababa is perilous with year-round landslides, the construction of the tunnel will provide a safer alternative for the 10,000 vehicles passing through. 345 Along with the two highway projects, the commencement of the cable car from Butwal to Palpa will boost tourism decrease commute costs and boost other projects and trade-related activities. Besides this, the construction of substations in Kathmandu valley and the distribution of electricity through underground lines will help cover the demand of electricity and make roads and footpaths more walkable. However, while we see significant progress being made, there are some stagnant projects stopping the country from reaching its full potential in infrastructure development. For example, the stagnation in mega projects like West-Seti and Tila-Karnali hydropower has huge monetary implications. The new budget has provided some support for infrastructure development and fully utilizing it will help as the overall performance and attainment of infrastructure objectives are closely interconnected.

Tourism

The tourism industry continues to experience increased activity, with March of FY 2079/80 BS (2022/23 AD) experiencing the highest tourist influx since Covid-19.346 However, the average tourist stay has decreased. The government is making efforts to boost tourism through strategies such as the 'Clean Mountain Campaign 2023' which aims to clean garbage from popular mountains. Hotels in Nepal are also recovering from the pandemic, with increased profits and market capitalization while the tourism industry is seeing a rise in loans. Overall, Nepal's tourism sector is experiencing growth and positive developments, providing opportunities for economic recovery and sustainability.

TOURIST ARRIVALS

Growing Influx of Tourists

Following the trend of previous review periods, the tourism sector has continued to see a growth in the number of tourist arrivals. March of this review period witnessed the highest number of tourist influx in a month since Covid-19, with 99,426 tourists entering the country.357 Out of the 98,773 tourists that entered the country in April, India ranked first with 31,437 Indian tourists entering Nepal. America ranked second with 8,413 tourists, the UK

came third with 5,409 tourists, and China came fourth with 4,770 tourists.358 In FY 2022/23 AD (2079/80 BS), the government collected NPR 46.7 billion (USD 356 million) in foreign currency from foreign tourists, an increase of 190% compared to the previous fiscal year.359 However, while the number of tourists has increased, the average stay per tourist has decreased. In FY 2022/23 AD (2079/80 BS), tourists stayed 13.1 days on average, a decrease from the average stay of tourists in 2020 and 2021 which was 15.1 days and 15.5 days respectively.360

FACTSHEET

No. of tourist arrivals (as of April 2023)

98,773347

Outstanding Credit to the tourism industry NPR 24.3 billion (USD 185.1 million)348

Number of hotels listed in NEPSE 4349

Consumer Price Inflation (Restaurant and Hotel) 14.68% (as of mid-April 2023)350

FDI commitment in tourism sector(as % of total FDI) 33%351

The average stay of tourist352 13.1 days

Average spending per tourist per day353 USD 40.5

Number of hotels registered (with star rating)354

16,335

Number of casinos registered355 24

Number of travel agencies registered356 3,501

Figure 22: Tourist Influx in April from FY 2008/09 AD (2059/60 BS) to FY 2022/2023 AD (2079/80 BS)

TOURIST ARRIVALS (AS OF APRIL)

Nepal Added to China’s List of Approved Outbound Tourist Destinations

In March of 2023, Nepal was added as one of the 40 countries in China’s list of countries approved for outbound travel. For the past three years, China had halted all international travel and upheld strict Covid restrictions despite the global community’s efforts to return to normal. Prepandemic, an average of around 170,000 Chinese tourists arrived in Nepal annually, making China one of Nepal’s largest source of tourists alongside India.361 According to the notice issued by the Chinese Ministry of Culture and Tourism, travel agencies could resume providing airline and hotel packages to tourists from March 15, 2023 (Chaitra 1, 2079).362

MOUNTAINEERING UPDATE

Campaign Conducted by the

Nepal Army to Collect Garbage from Four Mountains

In June of 2023, the Nepal Army conducted the ‘Clean Mountain Campaign 2023’, collecting 35,000 kgs of degradable and non-degradable waste from four mountains. With the support of locals and volunteers, they successfully removed 13,621 kgs of waste and plastic from Mount Everest and Lhotse. Similarly, they were able to remove 3,567 kgs of waste from Annapurna and 18,520 kgs from Baruntse363 While efforts have been made to reduce pollution on Everest and other mountains, they have been ineffective due to a lack of proper monitoring.

FINANCIAL SITUATION

Hotels in Nepal Recuperate Since Covid-19

The Nepal Stock Exchange (NEPSE) is a platform for

Nepal’s stock exchange and secondary market that allows listed companies to raise capital. Currently, a total of four hotels are listed under NEPSE – Chandragiri Hills Ltd., Soaltee Hotel Ltd., Taragaon Regency Hotels Ltd., and Orients Hotel Ltd.364 The total market capitalization of hotels has increased by almost 9% comparing numbers from midApril of FY 2022/23 AD (2079/80 BS) to the same period FY 2021/22 AD (2078/79 BS). The total market capitalization reached NPR 58.8 billion (USD 448.2 million) and accounts for 2.1% of the total market capitalization of NEPSE.365 Such an increase in market capitalization highlights the gain in confidence among investors in the tourism sector.

Table 12. Profits made by hotels listed in NEPSE in the second quarter of FY 2022/23 AD (2079/80 BS) and FY 2021/22 AD (2078/79 BS)

Source: The Annapurna Express366

Hotels listed in NEPSE

Second Quarter of FY 2022/23 (Nepali FY 2079/80)

Second Quarter of FY 2021/22 (Nepali FY 2078/79)

Chandragiri Hills Ltd. NPR 51.48 million (USD 392,318) NPR 5.8 million (USD44,200) Soaltee Hotel Ltd.

million (USD 1.9 million)

40 million (USD 304,831)

Taragaon Regency Hotels Ltd

million (USD 808,718

1.25 million (USD 9525 ) loss Oriens Hotel Ltd. (Radisson Hotel)

million (USD 278, 692

80 million (USD 609, 663) loss

Increase in Loans in the Tourism Industry

The tourism industry is a laborintensive industry, as seen by the strong emphasis on the value of human capital. As of mid-April 2023, the total outstanding credit to tourism activities (trekking, mountaineering, resort, rafting, and camping) increased by 3.7% to reach NPR 24.3 billion (USD 185.1 million).367 Similarly, total outstanding credit by banks to hotels increased from NPR 156.4 billion (USD 1.1 billion) to NPR 170.1 billion (USD 1.3 billion) from last fiscal year to this fiscal year, an increase of 9.2%.368

NEW DEVELOPMENT

Nepal-China Friendship Dragon Boat Race Festival

In collaboration with the Chinese embassy in Nepal, the Nepal Tourism Board and Pokhara Metropolitan City, organized the first Nepal-China Friendship Dragon Boat Race Festival in Pokhara.369 The event hosted 260 participants and a significant number of Chinese tourists to Nepal, helping boost tourism in Nepal.370 As tourist inflows start lessening during the monsoon season (June - August), these types of events can help sustain the flow of tourists into the country. Pokhara has been one of the most popular destinations for Chinese tourists. With the operation of Pokhara International Airport, the event helped set a new milestone for Pokhara as a destination. Charter flights were organized specifically for the event, which is expected to pave the way for regular flights between China and

Pokhara. Additionally, Buddha Air integrated WeChat into its services for flight bookings and tour packages, thus catering to Chinese tourists. Overall, these developments signify positive prospects for Nepal's tourism sector and demonstrate the country's efforts to strengthen ties with China while attracting more visitors.

POLICIES AND REGULATION

E-wallets for Indian Tourists

Nepal and India signed a Memorandum of Understanding (MoU) on June 1st , 2023 (Jestha 18, 2080), paving the way for cross-border digital payment via e-wallets.371 According the COO, Nepal Clearing House is working to collaborate with unified payment interface (UPI) of the National Payment Corporation of India to establish e-payment services. The collaboration aims to make digital transactions more convenient for travelers. The ease of transactions will be beneficial not only for trade and tourism but also to students and businesspeople. This agreement allows Indian tourists to utilize popular e-wallet services like BharatPe, PhonePe, Google Pay and Paytm to make payments in Nepal.372 This service is especially significant because a previous ban on Indian banknotes higher than INR 100 (NPR 160) has created a major hassle for Indian tourists. Since India has been the number one source of tourists in Nepal the country’s largest trade partner and a major source of foreign investment, this service presents a valuable opportunity to boost tourism, e-commerce

and fintech sectors between India and Nepal.

Dispute Surrounding Trekking Guidelines

A dispute between Nepal Tourism Board (NTB) and the Everest region has emerged following NTB’s decision to halt the issuance of Free Individual Trekker (FIT) cards for foreign solo trekking.373 The rural municipality in Everest region made the decision to waive the regulation which created tensions between the two entities. While Nepali trekkers are unaffected by the rule, foreign tourists are required to hire a trekking guide and pay additional trekking fees due to the ban. The ban was imposed considering safety measures to prevent risk of injuries or deaths of solo trekkers. Additionally, it aimed to create jobs for local porters. However, tour operators have expressed concerns regarding repercussions of the decision. Foreign travelers could potentially turn towards international tour services and hire guides before their arrival to Nepal, which would decline cash flow to private travel businesses and small-scale operators in trekking areas that rely solely on travelers for income. The dispute has highlighted the need to find a delicate balance between safety measures ensuring the safety of trekkers and maintaining the economic sustainability of local businesses.

PROGRAMS, EVENTS, AND CAMPAIGNS

4th Himalayan Travel Mart

The 4th Himalayan Travel Mart

(HTM 2023), Nepal’s largest tourism trade show, took place in Kathmandu between the 6th and 10th June. The fourday event welcomed over 700 delegates representing 25 different countries this year. HTM 2023 hosted national and international speakers who spoke about different topics under the theme ‘Reconnecting, Rebuilding and Reinvigorating’. Some of the topics discussed were Nepal's aviation sector and the development of new international airports; sustainable tourism practices; emerging European tourism trends, and opportunities; and the role of education in advancing the tourism sector. The event was supported by partners including Buddha Air, Air Arabia, Hotel Yak & Yeti, and Sri

Outlook

Lankan Airlines. The HTM served as a catalyst to set priorities for tourism development and foster connections with global travel entrepreneurs.

Campaign to Attract Tourists Through Influencers

The USAID Trade and Competitiveness, Steller (a storytelling app for travelers), and Nepal Tourism Board (NTB) joined hands to launch an international tourism campaign. This collaboration, supported by a grant, is to be carried out in two phases throughout 2023 and 2024, with the primary goal of attracting global tourists to Nepal.374 Steller has committed to utilize its technological services and promote the campaign with

the help of media influencers in Nepal. As per their plan, 10 influencers will travel around Nepal to capture stories and share them on social media platforms to promote tourism and highlight investment opportunities in Nepal. Local stakeholders will benefit from the promotional campaign which is set to target high-value tourists. The overarching goal of the campaign is to present Nepal's rich history, breathtaking natural landscapes, vibrant culture, and thrilling adventures. By showcasing these unique aspects, the campaign aspires to attract a larger number of tourists throughout all seasons and encourage them to extend their stays in the country.

The authorization of outbound travel for Chinese nationals to Nepal by the Ministry of Culture and Tourism in China can be deemed beneficial for Nepal’s tourism industry and bilateral relations with China. As tour service providers have been issued a notice to resume air ticket and hotel business services by the ministry, tourist numbers are expected to boost as China was the second largest source of tourists in Nepal before the Covid-19 pandemic. Despite barriers faced in the past, like the 2015 earthquake, Nepal-India border blockade, Covid-19 pandemic, and Russia-Ukraine conflict, the authorization from Beijing to allow Chinese citizens to travel to Nepal has sparked hope among local stakeholders in the tourism sector which could play a significant role in the country’s economic recovery. Additionally, Nepal has also resumed Chinese language training courses with China’s support to train 200 Nepali tourism professionals within the next five years.375 This development highlights Nepal's enthusiasm to uplift tourism efforts with China and strengthen bilateral relationships and create a more skilled workforce for the tourism industry, that are better equipped to provide services for the incoming tourists.

4 Market Review

Financial Market

During the review period, the Balance of Payment (BoP) transitioned into a surplus from last quarter’s deficit. Banks and Financial Institutions (BFIs) have been seen lowering interest rates recently in an effort to boost economic growth and promote borrowing. However, despite the availability of liquidity, these measures have not caused the banks' lending activity to significantly increase. Moreover, the non-performing loans (NPLs) of BFIs have reached a concerning level, almost a three-fold increase in the last nine months of the fiscal year 2022/23 AD (2079/80 BS). Recognizing the need for flexibility, the Nepal Rastra Bank (NRB) has permitted BFIs to alter their base interest rates on a monthly basis, providing them with more flexibility to respond to changing market dynamics. The former rule of quarterly interest rate modifications has been replaced by this regulation.

Third Quarter Performance Analysis of Commercial Banks

As per the unaudited third quarterly results of commercial banks of FY 2022/23 AD (2079/80 BS), the operating profit of commercial banks increased by 9.14%, while the net profit grew by 6.93%.

At the end of third quarter of FY 2022/23 AD (2079/80 BS), Nabil Bank bagged the highest net profit of NPR 5.11 billion (USD 38.98 million), followed by Global IME Bank and NIC Asia Bank with a net profit of NPR 4.35 billion (USD 33.14 million) and NPR 4.01 billion (USD 30.55 million) respectively. Everest Bank and Standard Chartered Bank had a whopping increase of 62.63% and 60.25% in their net profits. On the other hand, the Agriculture Development Bank registered the lowest net profit of NPR 1.04

billion (USD 7.92 million).

In terms of reserves and surplus, Nabil Bank held the highest amount of reserves of NPR 25.57 billion (USD 194.86 million) followed by Nepal Investment Mega Bank (NIMB) and Nepal Bank with NPR 23.89 billion (USD 182.05 million) and NPR 20.67 billion (USD 157.51 million) respectively. Seven banks fared better than the reserves and surplus industry average of NPR 12.06 billion (USD 91.90 million).

The deposits from customers saw a 28.49% rise compared to the corresponding period last year with the highest deposits being mobilized by Nabil Bank, NIMB and NIC Asia Bank with NPR 363.48 billion (USD 2.77 billion), NPR 350.19 billion (USD 2.66 billion) and NPR 314.80 billion (USD 2.39 billion), respectively. Whereas Standard Chartered Bank

Consumer Price Index (mid- April)

7.76 %

Gross foreign exchange reserves (mid-April)

NPR 1433.73 billion

Buying Exchange Rate per USD (mid-April)

NPR 131.03

Weighted Average 91-day Treasury Bills Rate (mid-April)

9.74%

Weighted average inter-bank transaction rate (mid-April)

7%

Weighted average deposit rate (mid-April)

8.26%

Weighted average lending rate (mid-April)

12.84%

Average base rate of commercial banks (mid-April)

10.48%

recorded the lowest deposits from customers of only NPR 107.41 billion (USD 818.53 million). As opposed to this, NIMB had the highest increase in deposits of 89.51%. Additionally, Global IME Bank holds the highest loan and advances portfolio of NPR 362.08 billion (USD 2.75 billion) followed by Nabil Bank and NIMB at NPR 323.51 billion (USD 2.46 billion) and NPR 311.24 billion (USD 2.37 billion) respectively. Meanwhile Standard Chartered Bank had the lowest credit disbursement of NPR 80.07 billion (USD 610.18 million).

During the review period, average Non-Performing Loans (NPL) stood at 3.03% as compared to 1.22% in the same period in the previous year. Furthermore, the average cost of funds was 8.25% against the 6.85% in the corresponding period last year. Similarly, the average base rate stood at 10.52% during the review period, the highest being 11.34% of Sunrise Bank followed by Citizens Bank at 11.14%. Rastriya Banijya Bank Limited had the lowest base rate at 8.47%.

KEY INDICATORS

Some of the key macroeconomic

indicators as per the macroeconomic and financial situation report based on nine months’ data ending in midApril of FY 2022/23 AD (2079/80 BS) published by the NRB are highlighted below.377

Deposit and Credit Mobilization

In the period under review, deposits at Banks and Financial Institutions (BFIs) witnessed a growth of 7%, surpassing the increase of 5.1% recorded in the same period last year. Furthermore, on a year-onyear basis, deposits at BFIs experienced a substantial

expansion of 11% in mid-April 2023. As of mid-April this year, the distribution of total deposits indicates that demand deposits, saving deposits, and fixed deposits accounted for 8%, 25.7%, and 60.1% respectively. These proportions have experienced a slight change compared to a year ago when the respective shares were 8.7%, 28.7%, and 56.1%.

Similarly, in the review period, credit provided to the private sector by BFIs witnessed a rise of 3.5%. This increase contrasts

with the previous year's corresponding period, where credit grew by 13.5%. Looking at the year-on-year basis, the

credit extended to the private sector from BFIs experienced a 3.2% increase in mid-April 2023.

Figure 23. Deposit mix at Banks and Financial Institutions (Percentage Share)

Source: Current Macroeconomic and Financial Situation based on 9 months, Nepal Rastra Bank, 2022/23

2022(Mid-July) 2022(Mid-April) 2023(Mid-April)

BFIs witnessed an increase in outstanding loans to various sectors. The agricultural sector experienced a growth of 6.4%, the industrial production sector saw an increase of 8.4%, the construction sector witnessed a significant rise of 12.6%, while the transportation, communication, and public sector observed a substantial growth of 14.6%. Additionally, the wholesale and retail trade sector experienced a modest increase of 4.2%, the service industry sector grew by 3.8%, and the consumable sector saw a rise of 3.4% in outstanding loans from BFIs.

BFIs also experienced changes in the extension of various types of loans. Term loans witnessed a significant increase of 19.1%, while real estate loans, including residential personal home loans, saw a more modest growth of 3.9%. Trust receipt loans for imports also experienced a slight increase of 3.1%. However, overdraft loans decreased by 65.8%, primarily due to the reclassification of loans from

the previous year. Margin nature loans decreased by 6.7% and hire purchase loans decreased by 14.6%.

Liquidity Management

During the review period, the NRB injected a total liquidity of NPR 4449.09 billion (USD 33.90 billion) based on turnover. This liquidity injection consisted of NPR 413.94 billion (USD 3.15 billion) through repo, NPR 89.70 billion (USD 0.68 billion) through outright purchase auction, NPR 2726.81 billion (USD 20.78 billion) through the standing liquidity facility (SLF), and NPR 1218.63 billion (USD 9.28 billion) through the Overnight Liquidity Facility (OLF). Additionally, the NRB absorbed NPR 5 billion (USD 38 million) of liquidity through a reverse repo auction. In the corresponding period of the previous year, a net amount of NPR 5182.72 billion (USD 39.49 billion) liquidity was injected through various instruments.

Moreover, NRB injected liquidity

amounting to NPR 557.81 billion (USD 4.25 billion) through the net purchase of USD 4.27 billion (NPR 560.31 billion) from the foreign exchange market. In the corresponding period of the previous year, liquidity injection of NPR 203.09 billion (USD 1.54 billion) occurred through the net purchase of USD 1.68 million (NPR 220.45 million).

The NRB also purchased INR equivalent to NPR 462.14 billion through the sale of USD 3.54 billion in the review period. INR equivalent to NPR 419.18 billion was purchased through the sale of USD 3.50 billion in the corresponding period of previous year.

Foreign Exchange Reserves and Adequacy

In mid-April 2023, the total value of foreign exchange reserves rose by 17.9% to NPR 1433.73 billion (USD 10.92 billion), compared to NPR 1215.80 billion (USD 9.26 billion) in mid-July 2022. The foreign exchange reserves

Figure 24. Sectorwise Outstanding Credit of Banks and Financial Institutions

Source: Current Macroeconomic and Financial Situation based on 9 months, Nepal Rastra Bank, 2022/23

AGRICULTURE INDUSTRIAL PRODUCTION TRANSPORTATION WHOLESALE AND RETAIL… SERVICE INDUSTRIES

held by the NRB experienced a 20.6 % increase, reaching NPR 1273.99 billion (USD 9.70 billion), compared to NPR 1056.39 billion (USD 8.05 billion) in mid-July

2022. On the other hand, reserves held by BFIs, excluding NRB, saw a marginal 0.2 % increase to NPR 159.74 billion (USD 1.21 billion) in mid-April 2023 from NPR 159.41

billion (USD 1.21 billion) in midJuly 2022. The proportion of Indian currency in the total reserves amounted to 23.1 % as of mid-April 2023.

Table

Federal Government Expenditure and Revenue

During the review period, the

provincial governments recorded a total expenditure of NPR 92.13 billion (USD 702.09 million). In the same period, they achieved a total resource mobilization of NPR 130.81 billion (USD 996.86 million). Out of this amount, the federal government contributed NPR 101.64 billion (USD 774.56 million) in the form of grants and revenue from the federal divisible fund, while the provincial governments independently mobilized NPR 29.17 billion (USD 222.23 million) through revenue and other receipts.

Interest Rates

In the ninth month of FY 2022/23 AD (2079/80 BS), the weighted average rate for the 91-day

treasury bills remained steady at 9.74%, compared to 7.58% in the corresponding month of the previous year. Meanwhile, the weighted average interbank transaction rate among commercial banks increased slightly from 6.99% a year ago to 7% in the current review month. The average inter-bank rate of BFIs, which serves as the operating target of monetary policy, stood at 7.01% in the review month, just slightly higher than the 7% rate recorded a year ago.

The average base rate of commercial banks experienced an increase, rising from 9.17% a year ago to 10.48%. Furthermore, the weighted average deposit rate and lending rate of commercial banks stood at 8.26% and 12.84%,

13. Foreign Exchange Adequacy Indicators

Source: Current Macroeconomic and Financial Situation based on 9 months, Nepal Rastra Bank, 2022/23

FY 2022/23 AD (2079/80 BS) (Mid-April)

Based on nine months' worth of imports in FY 2022/23 AD (2079/80 BS), the foreign exchange reserves of the banking sector are deemed sufficient to cover approximately 11 months of prospective merchandise imports and 9.4 months of both merchandise and services imports. As of mid-April 2023, the ratio of reserves-to-GDP, reserves-to-imports, and reserves-to-M2 stood at 26.6%, 78.9%, and 24.4%, respectively. These ratios were slightly lower at 24.6%, 57.8%, and 22.1%, respectively, in mid-July 2022.

respectively, in the review month. Comparatively, these rates were 7.11% and 10.78%, respectively, one year ago.

Balance of Payment

During the review period, the Balance of Payments (BoP) maintained a surplus of NPR 180.17 billion (USD 1.37 billion), a significant improvement compared to the deficit of NPR 268.26 billion (USD 2.04 billion) recorded in the corresponding period of the previous year.

KEY DEVELOPMENTS

BFIs Lower Interest Rates

BFIs have made significant changes to their interest rates. Commercial banks have announced a reduction in interest rates on loans and deposits. The premium rate on deposits will drop to 0.4% while loans will have a 1% reduction. Similarly, the Development Banks have reduced the interest rate for term loans by 0.25%. In addition to this, the Nepal Financial Institutions Association (NFIA) has lowered the interest rate on fixed deposits above three months by 0.20%, with one-year term deposits now earning interest at 11.90% instead of the previous 12.10%.

Banks Fail to Increase Lending Despite Excess Liquidity

Although BFIs have a surplus of loanable cash, they are unable to grow investment due to low credit demand brought on by excessive interest rates. The NRB records show that the BFIs have collected

deposits of NPR 5.437 trillion (USD 41.43 billion), while their lending stood at NPR 4.824 trillion (USD 36.75 billion). In the third quarter of the last FY 2022/23 AD (2079/80 BS), the BFIs collected additional deposits of over NPR 270 billion (USD 2.05 billion), whereas they provided loans of NPR 108 billion (USD 823 million). This gives the BFIs a buffer of additional liquid assets totaling more than NPR 163 billion (USD 1.24 billion).

Currently, the credit-deposit ratio of the BFIs has reached 85.45% against the threshold of 90% fixed by the NRB. The remaining margin and excess deposit collections have enabled the BFIs to lend more than NPR 200 billion (USD 1.52 billion). However, BFIs haven’t been able to increase lending due to high interest rates and increasing non-performing loans. Demand for loans has also plunged due to slower economic activities. Additionally, banks have also been hesitating to issue more loans due to the growing cases of bad debts.378

NPLs of Banks Reached 3.02%

In the first nine months of FY 2022/23 AD (2079/80 BS), the commercial banks of Nepal saw a noticeable ratio growth in bad debts. The average amount of non-performing loans (NPLs) held by 21 commercial banks, as reported in their third quarterly financial reports, was NPR 130 billion (USD 990.68 million), or 3.02% of their total loan amounts. Midway through January, the percentage was 2.63%. Among all banks, Himalayan Bank is reeling under the highest NPLs. The bank’s ratio of bad debts

surged to 4.56% in FY 2023/24 AD (2079/80 BS) from 0.99% in the previous fiscal year.379

NRB Permits BFIs to Alter Interest Rates on a Monthly Basis

According to the NRB regulations published in the second week of May 2023, BFIs can modify the interest rates on their loans on a monthly basis. Thus, the former rule of quarterly interest rate modifications has been replaced. The government has been under increasing pressure to adopt expansionary monetary policies and lower interest rates, which is why the NRB made this decision. Additionally, another reason for this policy is that BFIs are currently dealing with a liquidity surplus but are finding it difficult to attract borrowers due to the high interest rates. According to the new regulation, BFIs must base their new interest rates on the three-month rolling average of base rates. Also, BFIs are not permitted to establish interest rates that are lower than the average base rates for the time period in question.380

Finance Ministry Forms Task Force to Merge Nepal Bank and Rastriya Banijya Bank

The Ministry of Finance has formed a task force to study and implement the merger of Nepal Bank and Rastriya Banijya Bank. The head of the Financial Sector Management and Corporation Coordination Division has been assigned as the coordinator of this task force. This decision was supported by the fact that the paid-up capital of the private

sector has reached to the maximum of NPR 35 billion (USD 266.72 million).381

Commercial Banks Pay Less Income Tax

The decrease in commercial banks' profitability has affected the government's capacity to collect taxes from the banking sector. In the first nine months of the FY 2022/23 AD (2079/80 BS), the banking sector's income tax payment to the government

decreased by 5.59%. As of the third quarter of the fiscal year, the banks paid the government a total of NPR 19.99 billion (USD 152.33 million) in income taxes, down from NPR 21.16 billion (USD 161.25 million) during the same time of the previous fiscal year 2021/22 AD (2078/79 BS).382

Third-Quarter Monetary Policy Review Highlights

The NRB has published a third-

quarter review of the monetary policy of FY 2022/23 AD (2079/80 BS).383 The review exhibits the main macroeconomic indicators that have shown a steady improvement as a result of the relatively expansionary policy measures implemented by the central bank. The major highlights from the third quarter review of the monetary policy by NRB are discussed henceforth:

The average Consumer Price Inflation (CPI) up to mid-April is at 7.76%.

has improved with the resumption of savings due to which the base rate and interest rate have started to decrease. The average base rate of commercial banks stands at 10.48%.

The bank rate was reduced from 8.5% to 7.5%.

BFIs have used overnight liquidity facility totaling NPR 1.21 trillion (USD 9.22 billion).

In FY 2079/80 (2022/23), it is projected that comprehensive money supply will increase by 12%, while credit to the private sector will rise by 8%.

In March 2023, the weighted average inter-bank rate remained relatively stable at 7.01% compared to 6.99% in March 2022.

Budget of NPR 1.751 trillion (USD 13.34 billion) Announced for FY 2023/24 AD (2080/81 BS)

For the fiscal year 2023/2024 AD (2080/81 BS), a budget of NPR

Source: NRB, Third Quarterly Monetary Policy Review FY 2079-80

1.751 trillion (USD 13.34 billion) has been announced. A total of NPR 1.141 trillion (USD 8.69 billion) and NPR 302 billion (USD 2.30 billion) will be used for recurrent and capital expenses, respectively.

Additionally, the budget for financial management is NPR 307 billion (USD 2.34 billion).384

Table 14. Highlights from the Third Quarter Review of the Monetary Policy

Highlights from the third quarter review of the monetary policy

The liquidity position of the banking sector

Table 15. Major Highlights of Fiscal Budget Regarding the Financial Market for FY 2023/24 (2080/81)

Major highlights of Fiscal Budget regarding Financial Market for FY 2023/24 AD (2080/81 BS)

Economic growth rate of 6% to be achieved in the next fiscal year. The government expects to tame inflation rate at 6.5%.

In order to make the financial sector modern and dynamic and to strengthen the regulatory system, the laws related to the financial sector including the NRB Act and BFIs Act will be reformed / amended. The financial sector development strategy will be implemented.

NPR 1.25 billion (USD 9.52 million) to be allocated to develop the startup ecosystem including venture capital and startup businesses.

The interest subsidy program for subsidized loans will be restructured based on the study of the effectiveness of subsidized loans with the objective of increasing production, promoting internal employment and developing entrepreneurship. Under this program, NPR 11.59 billion (USD 88.32 million) has been allocated.

The regulation and supervision of the insurance sector will be strengthened and made effective. In addition to expanding quality insurance services, the insurance claim process will be simplified and expedited in the payment system.

Effective measures will be taken to control unprofessional and disorderly conduct that affects the stability of the financial sector.

Government-owned BFIs to be restructured.

Remittance bonds will be issued to encourage Nepali individuals who hold work permits and are employed abroad to use formal channels for inward remittance. The funds received through this process will be utilized for infrastructure development. Furthermore, for opening a bank account and sending remittance, the facility of giving at least 1% interest will be continued. Workers who send remittance through formal channels will also be linked to Social Security Fund (SSF).385

Outlook

During the review period, as per the commercial banks' unaudited financial statements for the third quarter, the percentage of non-performing loans (NPLs) has increased to 3.02% from 1.22% during the same period last year. This increment is expected to have an impact on the performance of commercial banks. However, despite the increasing liquidity, the demand for loanable funds has not shown an increase due to the persistently higher interest rates.

At a time when the country’s economy has been undergoing economic slowdown, which is largely blamed for the high interest rates being charged by the banks, NRB has taken different initiatives to address the ongoing economic turmoil. NRB has lowered the bank rate to 7.5% from 8.5% enabling increased lending and economic growth. It has also revised rules to provide refinance facilities at subsidized rates to the poorly performing production, construction and wholesale and retail businesses, addressing sector-specific challenges and contributing to their recovery. The government, through the fiscal policy, has declared to amend and reform the Bank and Financial

Institution Act, 2073 and Nepal Rastra Bank Act, 2058. The amendments are expected to strengthen the regulatory structure, making the financial industry more modern and dynamic, and have been announced along with the implementation of a financial sector development strategy.

As interest rates are gradually descending, it is likely to provide the much needed respite to bank borrowers. Further, it is expected to stimulate demand for loanable funds from the private sector. This may result in increased aggregate demand of the economy, having a positive impact in the income of business and acerbating economic recovery. Despite the challenges observed in the financial market, the combination of lower interest rates, increased flexibility in interest rate adjustments, regulatory reforms, restructuring of government-owned BFIs, remittance bond issuance, supportive monetary measures, and fiscal policy commitments reflect a favorable environment to stimulate investment, encourage economic growth, and enhance financial stability in the region.

Capital Market

The Nepali capital market has been evolving since its inception. The primary market appears vibrant, with a notable increase in the number of Initial Public Offerings (IPOs) each year, attracting investors continuously. The country currently holds over five million demat accounts, further indicating the growing interest in the market. Meanwhile, the benchmark index, the Nepal Stock Exchange (NEPSE), saw a 3.01% gain during the

Factsheet386

NEPSE Index (mid-April, in points) 1934.48

Stock market capitalization (end of the review period) NPR 2813.55 billion

Number of companies listed at NEPSE (mid-April) 248

period from 1st March to 22nd June 2023, closing at 2055.53 level. The market reached a low of 1,818.31 points on 15th May 2023. However, the market has since rebounded as investors' confidence was primarily bolstered by declining interest rates and improving liquidity in the banking system. In addition, the much-anticipated issuance of new stock brokering licenses, as well as the entry of commercial bank subsidiaries into the stock brokering business, is anticipated to further strengthen the secondary market.

Primary Market

During the review period, the Initial Public Offerings (IPOs) of multiple companies were issued and approved. IPOs of Rawa Energy Development Limited, City Hotel Ltd, Three Star Hydropower Ltd, Ghorahi Cement Industry Ltd, Nepal Republic Media Limited, Upper Syange Hydropower Ltd, Kutheli Bukhari Small Hydropower Ltd, Upper Lohore Khola Hydropower Company Ltd, IME Life Insurance Company Ltd Manakamana

Table 16. Key Indicators

Source: Share Sansar

(NEPSE)

Engineering Hydropower Ltd, and Bhagwati Hydropower Development Company Ltd were approved.

Likewise, the list of companies that issued IPOs for the general public are: BPW Laghubitta Bittiya

Sanstha Limited, Sanima Middle Tamor Hydropower Limited, Makar Jitumaya Suri Hydropower Company Limited, Sagarmatha Jalbidhyut Company Limited, Menchhiyam Hydropower Limited, Bhugol Energy Development Company Limited,

Dolti Power Company Ltd, City Hotel Limited, Modi Energy Limited, Ingwa Hydropower Ltd, Mai Khola Hydropower Limited and Rawa Energy Development Limited. The list of approved IPOs are as follows:387

Source: SEBON, Initial Public Offerings Approved

Table 17. Public Issue Size of IPO-Approved Companies

Figure 25. NEPSE Movement Index Source: Nepal Stock Exchange

KEY DEVELOPMENTS

Nepal Government Halts New Stock License Process

The Government of Nepal has halted the licensing procedure for a new stock exchange. The move came after significant opposition in the parliament as many Members of Parliament (MPs) raised allegations against the government trying to provide license to certain business houses through policy corruption. Currently, there is only one stock exchange, the Nepal Stock Exchange (NEPSE), operating in Nepal, which is coowned by the government. Three aspiring exchanges, namely, Himalayan Stock Exchange, the National Stock Exchange, and the Annapurna Stock Exchange, had submitted applications to open the new stock exchange.388

SEBON Awards Stock Brokerage License to 18 New Companies

The Securities Board of Nepal (SEBON) began the process of awarding new stock brokerage licenses. Out of 46 companies that submitted applications the license, 43 have received preliminary stockbroker licenses i.e letter of intent (LOI). Of the 43 companies, 18 have received the final approval for the brokerage license. Among these, Nabil Securities Limited, Mega Stock Market Limited, Himalayan Brokerage Company Limited, CBIL Securities Limited, NMB Securities Limited, RBB Securities Company Limited, Sanima Securities Limited, Sunrise Securities Limited, JBNL Securities Limited, Machhapuchhre Securities

Limited, Prabhu Stock Market Capital Limited, and Himalayan Securities Limited are owned by commercial banks, and the rest are owned by individuals. Currently, there are 50 stockbroker licensed by SEBON. Thus, with the entry of new stockbrokers, the total number of stockbrokers operating in NEPSE will be 93.389

Fiscal Policy Provisions Woe the Stock Market

The government’s decision to levy tax on bargain purchase price on mergers & acquisitions and Further Public Offerings (FPOs) has invited severe backlash and criticism from Nepal Bankers Association of Nepal. The new Economic Bill, 2080, introduces provisions to collect income tax on bonus shares given during Further Public Offerings (FPOs) and on the gains made during merger and acquisition transactions. Previously, public companies like banks, insurance firms, and hydroelectricity companies were not required to pay taxes on such profits. However, this new tax will now create an additional financial burden for these companies and their shareholders. In accordance, the stock market reacted negatively to the news, as the index plunged by 53.16 points on the next trading day that was on May 30th 2023.390

Fiscal Policy for FY 2023/24 AD (2080/81 BS) Announced

As per the provisions in the fiscal policy for the FY 2023/24 AD (2080/81 BS), the government intends to make the capital market transparent and competitive by

amending the existing policies so that more investors are attracted, and institutional investors are encouraged in the capital market. Likewise, arrangements will be made to allow Non Resident Nepalis (NRNs) to invest in the securities market especially in the hydropower and real sectors. Further, the government intends to expand and diversify securities instruments in the market by introducing the commodities exchange market as well as a Small and Medium Enterprises (SME) platform.391

IMF Asks NRB to Audit Asset Quality of Top Commercial Banks

The International Monetary Fund (IMF) has instructed Nepal Rastra Bank (NRB) to conduct an audit of the asset quality of the leading commercial banks of Nepal. This is as per International Monetary Fund (IMF) Article IV report under which IMF exercises surveillance over the economic, financial and exchange rate policy of its members to ensure effective operation of the international monetary system. The aim of this instruction is to assess the health and reliability of the banks' assets, particularly in light of the current economic challenges as well as the suspicious ever greening practice in the banking system. By conducting a comprehensive audit, the IMF intends to evaluate the level of risk exposure and potential vulnerabilities within the banking sector. This will provide crucial insights into the financial stability and resilience of the top commercial banks, enabling appropriate measures to be taken to address any identified concerns or weaknesses.392

Amidst improving macroeconomic indicators, the market has witnessed remarkable upward surge from 1,818.31 points on May 15th to close at 2,055 points on June 24th, a rebound of 13.03%. The upward momentum of the market was influenced by a number of factors such as including the reduction of interest rate by 1% through the third quarter monetary policy review, the improvement of liquidity in the banking sector, and impressive third quarter results of listed companies particularly banks and financial institutions (BFIs). Nonetheless, the imposition of taxes on Followon/Further Public Offerings (FPOs), gains derived from mergers and acquisitions, and capital gains income through the fiscal policy is likely to have an impact on both shareholders return and ongoing merger and acquisition drive. In spite of this, investors' confidence has been bolstered by the regulators' subsequent clarifications on the matter. As the seasonal capital expenditure observed with the closing of FY 2079/80 BS (2022/23 AD) drives an increase in market volume and liquidity, it is probable that the market will sustain its current upward trend in the upcoming period.

5 Special Section Data for Good

INTRODUCTION

The digital revolution has led to ascending increase in the generation, collection, and storage of vast amounts of data from different sources. It can potentially drive insights, inform decision-making processes and input innovation in all sectors of society.393 In Nepal’s case, the 2015 federal constitution significantly impacts data collection and utilization across government levels, moving from a centralized to a decentralized approach for sharing administrative data responsibilities.394

The Constitution of Nepal decentralized power through a federalized governance system with 7 provinces and 753 local governments. A significant challenge for these new governments lies in meeting the demands of Nepal's rural majority, representing 80% of the population (around 23 million people), as well as effectively addressing the needs of the newly empowered local government structures. Ensuring coherent and comparable federal statistics is essential for planning, managing, and monitoring national development plans and SDGs.395 However, the existing information systems used by local governments generate diverse and incomplete data and unclear data governance frameworks presents a challenge for the Central Bureau of Statistics (CBS).

The COVID-19 pandemic emphasized the crucial role of data in decision-making for policymakers and business leaders and yet, often, essential data on health, society, and the economy was lacking.396 Nonetheless, national statistical offices and partners rose to the challenge, establishing new collaborations and utilizing alternative data solutions while safeguarding data privacy. High-quality data is now seen as a strategic asset for rebuilding better the nation in a better way.

The Government of Nepal has been actively involved to promote data-driven governance and policies like Open Government Data (OGD). Encouraging open data practices is leading to increased transparency, innovation and collaboration.397 Various government agencies and research institutions have been collecting and managing data to improve data infrastructures. Despite some progress, there are still many challenges to address such as data literacy, data quality issues, data privacy and security issues, and coordination amongst various stakeholders.398

In the context of Nefport 53's special section, "Data For Good", the two articles by guest authors delve into exploring the space of data governance, strategy, access and sharing. It further explains how it is becoming an increasingly critical segment to foster data-driven innovations across different sectors like education, health and tourism. Thus, the following sections aim to explore the strengths, weaknesses, opportunities, and interconnection of these aspects, presenting insights, case studies, and valuable lessons from data practitioners and experts to provide a comprehensive understanding on the subject.

Journey of the Digital New World

By Amit Shrestha CFO, Microsoft Mexico

I had the privilege to be part of the evolution of the technology industry for over 25 years, spanning from the dot com saga to the roller coaster ride of Microsoft for the last 20 years. During my tenure at Microsoft, I held financial leadership roles in developed markets such as the United States to emerging markets such as Latin America, China, Hong Kong, Taiwan and Africa. As I write this, I serve as CFO of Microsoft Mexico. It has been a humbling experience to be part of Microsoft’s digital transformation journey and hopefully this synopsis of my experience provides some perspective.

Today’s Challenges

When I talk to finance colleagues across industries, many of them still face obstacles in embracing digital transformation. Many of them are still living with legacy systems that were created decades ago. They are stuck with static reports and are not able to drill down to find insights.

What is important to realize is that data is the new strategic asset for companies. The amount of data is doubling every year in the world and many of us have not yet created our “single source of the truth”. Business is becoming more complex every day, which is why having old tools that were built for old business models is not helpful. For example, finance processes are still manual which are subject to human errors. Finally, as the world grows, there are new business risks and threats, due to which there is a need for more regulations.

What is Digital Transformation?

Digital transformation is

the incorporation of digital technology into various aspects of business, essentially changing how it operates and delivers value. It is the move from the physical to digital, disrupting existing business models and creating new ones. Simply put, this is about looking at all the processes and seeing how we can do things better, efficiently, and effectively. The journey is about taking data and turning it into action while adding value to the business in the fastest and most relevant way. This is also seen as the “Fourth Industrial Revolution” that will transform many facets of our lives, including how we work and socialize with one another.

The Journey

As Microsoft has evolved over the last 48 years, so has the finance function. Early on in our journey of digital transformation in the early 2000s, we realized it is essential to have One Source, One Version and One location. Thereby, we launched initiatives to have those fundamentals in place.

First came a project dubbed One Finance to centralize processes into regional operating centers and outsource transactional work in Accounts Payable, Procurement, Accounting and specifically tackle the statistics and tax area. Second, we embarked on a journey called CORE Finance summarized as “discipline at the core and flexibility on the edges” with the key objective of having data governance. This allowed one version of truth enabling flexible reporting at all levels of business while still explicitly adhering to corporate standards.

With these foundations in place, it helped us with Business Intelligence (BI). We started with static reports that could only tell “what happened”. Manual processes were still very pronounced. Then Power BI came along, allowing interactive reporting, making meetings much more dynamic, and helping us understand “why it happened”. But we still didn’t have tools to help predict the future. With Machine Learning, we could learn

from the past to predict the future. We could tell “what will happen”. The distance between data and action is shorter now. Finally with Machine Learning with bots, we get to the position that we can say “what to do”, automating the decision-making process and moving really fast from data to decision.

Economics

In terms of economics, first comes Cloud Economics. When you shift from physical to cloud, various studies as well as our own experience suggest that there are savings around 30% to 40% relative to on-premises estates. These savings do not come overnight. The cashflow breakeven point could take between one and a half to two years as you need to continue to run both systems in parallel. Many times, cloud providers provide the incentives to mitigate initial cost spikes. Full cashflow savings take between four to five years. Profit and loss could take a bit longer depending on the nature of depreciation.

Second is Microsoft’s experience with the finance headcount. Historically, the finance headcount grew in lockstep with our business growth. However, post the financial crisis, the overall

finance headcount remained relatively flat, while our business continued to accelerate growth. In the past year, the headcount has grown by only approximately 30% while revenue has grown by 230%. This is primarily due to an increase in the usage of standard tools and technology that helped drive productivity gains.

Third, technology drives GDP growth. Before the invention of the printing press, GDP growth was stagnant. Then, the printing press changed the trajectory whereby the GDP doubled every century. The invention of the steam engine further ramped up GDP growth by two to three times. In the last century, technology accelerated this growth by 20 times. With the proliferation of Artificial Intelligence (AI), time will tell how GDP will accelerate in this current century.

The Future

AI has been evolving for nearly 70 years but accelerating rapidly in the past five years, especially since February of 2023. Most solutions to date have been narrow and mostly purpose built. For example, a Machine Learning model to calculate a risk score for an invoice. The new era of AI propels us forward to generalized intelligence, ingesting more

information to solve a broad set of challenges in a comprehensive way. For example, an algorithm that can bring together risk scores with insights. I am particularly curious and excited about the impact that AI will have in reducing inequalities, particularly in Healthcare and Education sectors.

Final Thoughts

Successful digital transformation requires a solid data estate. There are no data short cuts as those are foundation to transformation. Having One Source, One Version and One Location with data governance provides One Truth.

For this, the culture of “Growth Mindset” is key. This is the mindset of “learn it all” where the leadership is seeking to understand how to bring out the best in people. In growth mindset, you believe that potential is not predetermined. Rather, you can develop and learn. And, it is the mindset that considers failure as only failure if one fails to learn from it.

Finally, we are in the very early phase of the AI journey. Industry, academia, civil society, and the government need to collaborate to advance principles, regulations and learn from one another.

Nepal – A Happy, Healthy and Wealthy Data Driven Nation by 2030

By Prasanna Dhungel Co-Founder and Managing Partner, GrowByData

Individuals, corporations, and societies that utilize insights from data are happy, healthy and wealthy. Examples are many as we look around the world and in Nepal.

Imagine you are happy with the public services you are getting.

Locally in Kathmandu, imagine driving from Maharajgunj to Jawalakhel. You drive through the lush green parkway that connects the northern part of the Ring Road to the southern part. The 15-kilometer drive takes you a maximum of 20 minutes and is enjoyable. The traffic signals are synchronized with flowing traffic and minimized red lights. No potholes. No smoke. Gone are the days of crazy traffic with public services and meetings all handed remotely and electronically. Traffic is light.

You find the best parking spot close to Jhamel for a great price and park without wasting time. You go for a leisurely walk around Patan in brightly-lit safe streets with music and end your day. You get a call from your colleague. Your firm’s annual tax filing was done electronically and immediately submitted. He asks you to check

the receipt by email.

Tomorrow is a big day for the country – it is the general election day. However, no national day off. No big banners. You receive an SMS message about your nearest voting center, but you aren’t worried. You plan to electronically verify yourself and vote online. Why waste time in line? And by 10 pm, you will know the winning candidate and party. So easy and a complete change from days when results took two weeks.

You plan to spend the day relaxing with family and friends. You’ve ordered food and help online and you know delicious healthy food will be at your venue with friendly staff. Interestingly, it is no longer as expensive. As it is easier to do business, lots of new agrobusinesses have sprouted up around Nepal. And intelligent supply chain systems have reduced the cost of bringing food to Kathmandu. Moreover, electronic tracking and reporting has made food healthy. You know who to trust as food price and quality has become transparent, so the best vendors are winning.

You are happy and chilling at home. You had ordered your

parents’ annual check-up online. Your clinic-at-home service’s physician and diagnostic system arrive and do a thorough checkup at home. You will get the full report electronically. You can video call the doctor and order medicine to be delivered at home.

Moving on, you are spending time with your family hiking in a hill near Kathmandu. You are recharging after a busy week at work. The coming week is vital. You are pitching to a global prospect this week. You have increasingly moved your business to Kathmandu as the cost of doing business has gone down. Nepal has become a data-driven society and the positive impact is seen everywhere. Data insights are used everywhere to increase transparency, reduce cost, and provide delightful products and services at a lower cost.

Isn’t this an amazing experience and one that we feel like should continue? In essence, a data driven society is happy, healthy, free, and relaxed. And with all these cumulatively, a data society is wealthy, and the virtuous cycle continues.

While it may sound aspirational,

it really is not. Many countries around the world are already providing this lifestyle to their citizens. In the United States, you benefit from many of these capabilities and entrepreneurs continue to lead the way by utilizing the newest advances to push the boundaries of an insights-driven society.

It is a journey and we have already seen this in pieces in Nepal. And this evolution of a society to become data insights-driven follows four specific stages.

First, you are data on paper. Second, you digitize, and this is the first step to becoming an insight-driven society. We are already here in many sectors. We see Nepali government agencies, corporations and non-profits primarily using digital techniques and storing data. Third, you derive insights from data to understand what happened and why. And finally, you use these insights to proactively create what you want.

Many Nepali government bodies and corporations have been

progressing in this journey. We see the digital media house and government bodies heavily push digitization. Institutions such as the Institute for Integrated Development Studies (IIDS) and National Planning Commission generate and share knowledge from the data. Corporations such as Pathao, Clinic One and others utilize data to proactively provide better products and services for us consumers.

There are many uses of data. In our Eastern culture, we have always learned the power of knowledge

(knowledge is wealth, the chief of all wealth). This comes from data and insights. And the value is immense for individuals,

companies and societies that continue to harness the power of this benefit.

We know this, and the real opportunity is propagating this power from a few to the society to transforming the Nepali

society as I portray above. And this is exciting.

This starts by increasing awareness of the power of data. Imagine everyone from primary school onwards starting to learn about data tools. Imagine

turning on the TV and radio stations and having the option to learn about data skills and level-up your game. Visualize yourself opening a news portal and learning about innovations and entrepreneurship possible with data across Nepal. Dream of having access to free tools and training to learn anything you want in the world. Wow, the power this will bring.

I have already seen this at my work. At our firm, colleagues who are trained from around Nepal are world-class experts in their field. The reason behind this is that they are motivated and have had access to information on the web. We are already seeing a boom in the IT industry in Nepal due to the availability of this information for anyone in Nepal to learn anything they want.

This boom in technology-driven companies is bound to continue. In the past 30 years, we have seen India transform itself by tapping into the global demand for technology. Nepal can also tap into this trend by growing the number of quality data trained talent by leaps and bounds. As a practicing Technology entrepreneur, I know the demand is massive and the supply is very limited in Nepal. Were the Nepali economy generating more qualified Tech talent, the IT industry could have been ten times larger than what it is today.

At a time when other industries have had challenges in Nepal, imagine the lift to the Nepali economy this would have given. Why just rely on remittance from low paid workers working hard in tough conditions in the Middle East and Asia? Why not enjoy the benefits of higher paid happier Nepalis working locally and turbo-charging the local economy with their spend?

The world economy continues to tap into the power of technology. The last decade was one of Big Data. The next decade is one of Insights accessible through Generative AI technologies. This will create a massive demand for talent. Individuals, companies, and countries that tap into the power of this will be happy, healthy, and wealthy as I portray. Why don’t we aspire to become a Data Driven Nation by 2035 and transform ourselves?

Why shouldn’t the government demand data insights education at every level? Why shouldn’t the government, army, and police invest in this area? Why shouldn’t we make it easy to train every Nepali from arts, social sciences, and all disciplines to train and get certified in Technology and Data Insights training? Why not reduce tax for companies wanting to jump into this bandwagon in Nepal? Why make it so difficult for companies operating in this space to do business here?

A तक्मा should be given to individuals and corporations pursuing this charter. I know we can. There are companies like GrowByData, Deerhold, Daraz, eSewa, Cotiviti, Leapfrog and many others who have pursued this charter.

Today, the government talks about starting companies only. Why only encourage starting companies? Why not give friction to grow these companies? Why not encourage and give wonderful service to those that grow into the hundreds and a red-carpet service to those that grow into the thousands and tens of thousands?

All is possible. And it starts with understanding the power of this: creating the right policies, reducing friction among those on the journey and encouraging those already on the journey. Data is wealth and it is everywhere in Nepal. Like water, it can be harnessed to create a happy, healthy and wealthy Nepal.

And my bold push is – why do we just aspire for Tourism “Visit Nepal Year”? While Nepal possesses tremendous tourism potential – Nepal also has the potential to harness data.

So why not aspire for “Nepal – a Data Driven Nation by 2030”?

Learn more about other work produced by Nepal Economic Forum

NEF has launched its Economic Dashboard - NEFData! It covers three sectors with a vast array of economic data. Additionally, for the first time, get insights into capital and recurrent expenditure for defense.

Click here to start exploring.

Nefmeet 2023, ‘Economic Transformations and Beyond’ concluded on 18 July 2023 on a thought provoking and inspiring note. It focused on the launch of the latest NEF Publication and NEFData dashboard.

Click here to watch the event

The Neftalk titled ‘Digital Services at the Base of the Pyramid’ was co-organized by the World Bank, and Nepal Economic Forum’s Center for Digital Transformation on 27 April, 2023.

Click here to watch the event.

NEF’s most recent publication, ‘Introspecting Change’ probes into Nepal’s socio-economic journey from 2006 to 2021 – of what has been achieved and what is yet to be achieved. The publication presents a wealth of data spanning over a decade, covering diverse sectors such as tourism, agriculture, energy, and more.

Click here to get the report.

July’s Nefsearch on ‘Nepal’s Tourism and Hospitality Sector’ studied the current scenario of those sectors, analyzing the tourist arrivals, revenue generated by the industry, and the regulatory provisions pertaining to the sector.

Click here to read the report.

The 52nd issue of Nefport titled ‘Agriculture –Perspectives from the Ground’ focused on policy gaps and opportunities that cultivate conversations around agriculture in Nepal.

Click here to read the report.

Endnotes

1. “Press Freedom Index”, Reporters Without Borders, accessed on June 9,2023. Retrieved from-https://rsf. org/en/country/nepal

2. “Most Democratic Countries”, Wisevoter, accessed on June 12,2023. Retrieved from- https:// wisevoter.com/country-rankings/most-democraticcountries/#map

3. “Economic Freedom in the world”, heritage.org, accessed on June 19, 2023. Retrieved from-https:// www.heritage.org/index/

4. “Global Data”, Fragilestatesindex.org, accessed on June 19,2023. Retrieved from https:// fragilestatesindex.org/global-data/

5. “Corruptions Perceptions Index”, Transparency International, Accessed June 19, 2023, Retrieved from- https://www.transparency.org/en/cpi/2022

6. “President Ramchandra Paudel authenticates Citizenship amendment bill”, The Kathmandu Post, May 31,2023. https://kathmandupost.com/ national/2023/05/31/president-ramchandra-paudelauthenticates-bill-to-amend-citizenship-act

7. “Here are some specific provisions made by controversial Citizenship Amendment Bill approved by President Paudel”, Republica, May 31,2023. https://myrepublica.nagariknetwork.com/news/ some-specific-provisions-of-controversial-citizenshipamendment-bill/

8. “SC issues interim order not to implement citizenship bill”, Republica, June 05, 2023. https://myrepublica. nagariknetwork.com/news/sc-issues-interim-ordernot-to-implement-the-citizenship-bill/

9. “Top court clears way for implementation of Citizenship Act amendments”, The Kathmandu Post, June 22, 2023. https://kathmandupost.com/ national/2023/06/22/supreme-court-clears-the-wayfor-implementation-of-amendments-to-citizenshipact

10. “Dahal appoints eleven ministers amid disputes cabinet yet to get full shape”, The Kathmandu Post, March 31,2023. https://kathmandupost.com/ national/2023/03/31/prime-minister-dahal-expandscabinet

11. Prasain, Sangam, and Prithvi Man Shrestha, “Nepal unveils Rs1.75 trillion financial plan for fiscal 2023-24”, The Kathmandu Post, May 30, 2024. https://kathmandupost.com/money/2023/05/30/ nepal-unveils-rs1-75-trillion-financial-plan-forfiscal-2023-24

12. “Nepal budget 2023-24 highlights”, Online Khabar, May 29, 2023. https://english.onlinekhabar.com/ nepal-budget-2023-24-highlights.html

13. Ibid

14. “Nepal: Transitional Justice Bill Needs to Protect Victims, not Abusers”, Human Rights Watch, Accessed on June 15,2023. https://www.hrw.org/ news/2023/03/23/nepal-transitional-justice-billneeds-protect-victims-not-abusers#:~:text=The%20 Bill%20for%20the%20Amendment,parliament%20 on%20March%2019%2C%202023

15. Ghimire, Binod, “Disputed bill to revise transitional justice law lands in house”, The Kathmandu Post, March 20, 2023. https://kathmandupost.com/ politics/2023/03/20/disputed-bill-to-revisetransitional-justice-law-lands-in-house

16. “Dhaka Kumar Shrestha loses lawmaker position”, The Kathmandu Post, April 26,2023. https:// kathmandupost.com/national/2023/04/25/dhakakumar-shrestha-loses-lawmaker-position

17. “Don't remove Dhaka Kumar Shrestha SC”, Online Khabar-English, May 08,2023. https://english. onlinekhabar.com/dont-remove-dhaka-kumarshrestha-sc.html

18. “Court issues show cause notice for action against Dhaka Kumar Shrestha”, The Kathmandu Post, May 8,2023. https://kathmandupost.com/ national/2023/05/08/court-issues-show-causenotice-for-action-against-dhaka-kumar-shrestha

19. “Supreme Court clears the decks for Bindabasini Kansakar to replace Dhaka Kumar Shrestha”,Online Khabar, May 25,2023. https://english.onlinekhabar. com/bindabasini-kansakar-can-lawmaker-now.html

20. Ibid

21. “Resham Chaudhary released from prison”, Republica, May 29, 2023. https://myrepublica. nagariknetwork.com/news/resham-chaudhary-

released-from-prison/

22. “Fake Bhutanese refugee scam: 10 more victims contact police about duping- Know about Nepal's scandal”, WION News, May 23, 2023. https://www. wionews.com/world/fake-bhutanese-refugee-scam10-more-victims-contact-police-about-duping-knowabout-nepals-scandal-595462

23. “Fake Bhutanese Refugee Scam cases against 30 individuals filed in district court”, The Kathmandu Post, May 24, 2023. https://kathmandupost.com/ national/2023/05/24/fake-bhutanese-refugee-scamcases-against-30-individuals-filed-in-district-court

24. “Fake Bhutanese Refugee scam crime case”, Online Khabar(English), May 23, 2023. https://english. onlinekhabar.com/fake-bhutanese-refugee-scamcrime-case.html

25. “UML suspends Top Bahadur Rayamajhi”, Republica, May 10, 2023. https://myrepublica.nagariknetwork. com/news/uml-suspends-top-bahadur-rayamajhi/

26. “Police submit investigation report in fake Bhutanese refugees scam”, Setopati, May 22, 2023. https:// en.setopati.com/political/161101

27. “Ram Sahay Prasad Yadav elected Vice President,” The Himalayan Times, Accesses June 11, 2023, https://thehimalayantimes.com/nepal/ram-sahayprasad-yadav-elected-vice-president

28. “Ram Sahay Prasad Yadav elected Vice President,” The Kathmandu Post, Accessed June 11, 2023, https://kathmandupost.com/national/2023/03/17/ ram-sahay-prasad-yadav-elected-vice-president

29. “Rabi Lamichhane reacquires citizenship certificate,” The Kathmandu Post, Accessed June 11, 2023, https://kathmandupost.com/national/2023/01/29/ rabi-lamichhane-reacquires-citizenship-certificate

30. “Economist Wagle quits Congress after constant humiliation by the Deubas,” The Kathmandu Post, Accessed June 11, 2023, https://kathmandupost. com/politics/2023/03/31/economist-wagle-quitscongress-after-constant-humiliation-by-the-deubas

31. “5 months after his Saptari Defeat Bara sends Upendra Yadav to Parliament,” The Kathmandu Post, Accessed June 11, 2023, https://kathmandupost. com/politics/2023/04/27/5-months-after-his-saptaridefeat-bara-sends-upendra-yadav-to-parliament

“Latest Vote Counting Updates of Chitwan Bara Tanahun,” Nepal Live Today, Accessed June 12, 2023, https://www.nepallivetoday.com/2023/04/23/latestvote-counting-updates-of-chitwan-bara-tanahun/

32. “Visit of Prime Minister of Nepal Rt. Hon’ble Mr. Pushpa Kamal Dahal ‘Prachanda’ to India,” Embassy of India, Kathmandu, Accessed June 12, 2023, https://www.indembkathmandu.gov.in/news_letter_ detail/?id=351

33. “Statement by the Rt. Hon. Prime Minister Mr. Pushpa Kamala Dahal at the Joint Press Meet between the Prime Ministers of Nepal and India,” Ministry of Foreign Affairs, Nepal, Accessed June 12, 2023, https://mofa.gov.np/statement-by-the-rt-honprime-minister-at-the-joint-press-meet/

34. Ibid

35. “Visit of Prime Minister of Nepal Rt. Hon’ble Mr. Pushpa Kamal Dahal ‘Prachanda’ to India,” Embassy of India, Kathmandu, Accessed June 12, 2023, https://www.indembkathmandu.gov.in/news_letter_ detail/?id=351

36. “Press Release on consultation meeting on border affairs between Nepal and the Peoples Republic of China,” Ministry of Foreign Affairs, Nepal, Accessed June 12, 2023, https://mofa.gov.np/press-releaseon-consultation-meeting-on-border-affairs-betweennepal-and-the-peoples-republic-of-china/

37. “Kerung and Tatopani border points set to reopen fully for Trade travel,” The Kathmandu Post, Accessed June 13, 2023, https://kathmandupost.com/ national/2023/03/30/kerung-and-tatopani-borderpoints-set-to-reopen-fully-for-trade-travel

38. “Nepal seeks British Investment under BII and BIP,” The Kathmandu Post, Accessed June 12, 2023, https://kathmandupost.com/national/2023/04/27/ nepal-seeks-british-investment-under-bii-and-bip

39. “Constant Tussle for Power has crippled Provincial Governance,” The Kathmandu Post, Accessed June 13, 2023, https://kathmandupost.com/ politics/2023/04/18/constant-tussle-for-power-hascrippled-provincial-governance

40. “Bagmati Province Government complete six ministers take oath,” Nagarik Network, Accessed June 14, 2023, https://myrepublica.nagariknetwork.com/ news/bagmati-province-govt-complete-six-ministerstake-oath/

41. “Madhesh Province Cabinet reshuffled,” Nepal News, Accessed June 14, 2023, https://nepalnews.com/s/ nation/madhes-province-cabinet-reshuffled

42. “Gandaki Chief Minister Surendra Raj Pandey expands Cabinet,” The Kathmandu Post, Accessed June 14, 2023, https://kathmandupost.com/gandakiprovince/2023/05/12/gandaki-chief-minister-

surendra-raj-pandey-expands-cabinet

43. “Lumbini Province cabinet being expanded today,” My Republica, Nagarik Network, Accessed June 14, 2023, https://myrepublica.nagariknetwork.com/ news/lumbini-province-cabinet-being-expandedtoday/

44. “Karnali Province Government gets full shape 3 NC ministers took oath of office and secrecy,” The Annapurna Express, Accessed June 14, 2023, https:// theannapurnaexpress.com/news/karnali-provincegovt-gets-full-shape-3-nc-ministers-took-oath-ofoffice-and-secrecy-41223

45. “Sudurpaschim Cabinet expanded,” Rising Nepal Daily, Accessed June 14, 2023, https:// risingnepaldaily.com/news/27062

46. “Seven Provinces unveil total budget of Rs 279.59 billion for the FY 2023,” My Republica, Nagarik Network, Accessed June 14, 2023, https:// myrepublica.nagariknetwork.com/news/sevenprovinces-unveil-total-budget-of-rs-279-59-billionfor-the-fy-2023-24/#:~:text=KATHMANDU%2C%20 June%2017%3A%20All%20the,for%20the%20 current%20fiscal%20year.

47. “Provincial Budgets focus on reviving economy,” The Kathmandu Post, Accessed June 14, 2023, https:// kathmandupost.com/money/2023/06/16/provincialbudgets-focus-on-reviving-economy

48. “Global inflation will fall in 2023 and 2024 amid subpar economic growth” IMF. https://www.imf.org/ en/Publications/WEO/Issues/2023/01/31/worldeconomicoutlook-update-january-2023

49. “World Economic Outlook: A Rocky Recovery”, IMF. https://www.imf.org/en/Publications/WEO/ Issues/2023/04/11/world-economic-outlookapril-2023.

50. “Global Multidimensional Poverty Index 2022: Unpacking deprivation bundles to reduce multidimensional poverty”, Oxford Poverty & Human Development Initiative, https://ophi.org.uk/globalmpi-2022/

51. World Population”, https://www.worldometers.info/ world-population/

52. “World Food Situation”, FAO, https://www.fao.org/ worldfoodsituation/foodpricesindex/en/

53. “Global Debt Monitor”, Institute of International Finance, https://www.iif.com/Products/Global-DebtMonitor

54. “Pulse of Global Crisis”, United Nations Conference on Trade and Development, https://unctad.org/ global-crisis

55. Ibid

56. ibid

57. “Coronavirus Vaccinations”, Our World in Data, https://ourworldindata.org/covid-vaccinations

58. Smialek, Jeanna. “Fed Chair Sees ‘Long Way to Go’ on Inflation Fight,” The New York Times, June 21, 2023. https://www.nytimes.com/2023/06/21/ business/economy/powell-inflation-federal-reserve. html

59. “World Economic Outlook: Inflation Peaking Amid Low Growth” IMF. https://www.imf.org/ en/Publications/WEO/Issues/2023/01/31/worldeconomic-outlook-update-january-2023

60. Ibid

61. “Trade and Development Report Update: Global Trends and Prospects” UNCTAD. https://unctad.org/ system/files/official-document/gdsinf2023d1_en.pdf

67. “IFC, Goldman Sachs Facility Enabled Over $4.5 Billion for Women Entrepreneurs, Eclipsing Goal”, IFC. https://pressroom.ifc.org/all/pages/PressDetail. aspx?ID=27437

68. Ibid

69. “Making trade greener”, The Economist, October 6, 2021. https://www.economist.com/specialreport/2021/10/06/making-trade-greener

70. “Global Trade Update” UNCTAD. https://unctad.org/ publication/global-trade-update-march-2023

71. Krishnan, Ananth. “India’s Jan.-April imports from China rise 4.6% to $37.86 billion”, The Hindu, May 29, 2023. https://www.thehindu.com/news/ international/indias-jan-april-imports-from-chinarise-46-to-3786-billion/article66908326.ece

72. “India-China Trade Touches All-Time High of $135.98 Billion in 2022” BQ Prime, January 13, 2023. https:// www.bqprime.com/business/india-china-trade-

climbs-to-13598-billion-in-2022-trade-deficit-crosses100-billion-for-first-time

73. ibid

74. “Chief Economists Outlook May 2023,” World Economic Forum, Accessed June 15, 2023, https:// www3.weforum.org/docs/WEF_Chief_Economists_ Outlook_May2023.pdf?_gl=1*glp0jp*_up*M Q..&gclid=Cj0KCQjw1rqkBhCTARIsAAHz7K0 PMd49QZmyKdzpuPRlprmiVg-V76BKGey7zBwm0KpdgpqroPV0o0aAg2sEALw_wcB

75. ibid

76. “Amid multiple global crises, risk of prolonged period of low growth looms large, UN report warns”, UN. https://www.un.org/development/desa/dpad/ wp-content/uploads/sites/45/WESP_2023_MYU_PR_ EN.pdf

77. ibid

78. ibid

79. “Asia Low Carbon Transition,” Asian Development Bank, Accessed June 15, 2023, https://www.adb.org/ sites/default/files/publication/887061/ewp-686-asialow-carbon-transition.pdf

80. “Global Divergence De-routinization Jobs,” Asian Development Bank, Accessed June 16, 2023, https:// www.adb.org/sites/default/files/publication/881486/ ewp-683-global-divergence-de-routinization-jobs.pdf

81. “High-impact trade initiatives for accelerating the Sustainable Development Goals”, UNCTAD, https:// unctad.org/meeting/un-trade-forum-2023

82. “Embracing the future the impact of Chat GPT 4 on everyday life’, TS2 Space, Accessed March 14, 2023, https://ts2.space/en/embracing-the-future-theimpact-of-chat-gpt-4-on-everyday-life/

83. “As conservatives criticize ‘woke AI,’ here are ChatGPT’s rules for answering culture war queries”, The Verge, February 17, 2023, https://www.theverge. com/2023/2/17/23603906/openai-chatgpt-wokecriticism-culture-war-rules

84. Hooker, Lucy, “Banks: Is this a banking crisis- how worried should I be?’, BBC, May 2, 2023, https:// www.bbc.com/news/business-64951630

85. "WHO says Covid-19 is no longer a global health emergency", CNN. May 5, 2023. https://edition.cnn. com/2023/05/05/health/who-ends-covid-healthemergency/index.html

86. “Current Macroeconomic and Financial Situation

(based on nine months’ data ending mid-April 2022/23)”, Nepal Rastra Bank, May 10, 2023, https:// www.nrb.org.np/contents/uploads/2023/05/CurrentMacroeconomic-and-Financial-Situation-EnglishBased-on-Nine-Months-data-of-2022.23.pdf

87. ibid

88. ibid

89. “The World Bank in Nepal”, The World Bank, https:// www.worldbank.org/en/country/nepal/overview

90. ibid

91. “Stubborn inflation haunts Nepali consumers”, The Kathmandu Post, April 19, 2023. https:// kathmandupost.com/money/2023/04/19/stubborninflation-haunts-nepali-consumers

92. “ADB Estimates Nepal’s Economy to Moderate in FY2023”, Asian Development Bank, https://www.adb. org/news/adb-estimates-nepal-economy-moderatefy2023

93.

96. Ministry of Finance. “Budget Speech of Fiscal Year 2023/24,” Government of Nepal, 2023. https://www. mof.gov.np/site/publication-category/87

97. “Private sector skeptical on the NRB’s revised monetary policy to effectively address the current economic problems”, Republica, May 14, 2023. https://myrepublica.nagariknetwork.com/news/ private-sector-skeptical-on-the-nrb-s-revisedmonetary-policy-to-effectively-address-the-currenteconomic-problems/

Pandey, Siddhant Raj. “Alternative investment to attract FDI”, The Nepali Times, June 2, 2023. https:// nepalitimes.com/opinion/comment/alternativeinvestments-to-attract-fdi

106. “Aid management information system for Nepal”, Ministry of Finance, accessed on March 7, 2023, https://amis.mof.gov.np/web/guest/reports

107. “EU Nepal business forum ends, commits to increasing trade and investment”, The Kathmandu Post, May 10, 2023. https://kathmandupost.com/ money/2023/05/10/eu-nepal-business-forum-endscommits-to-increasing-trade-and-investment

108. “EU-Nepal trade project supports training officials on international trade”, The Kathmandu Post, May 22, 2023. https://kathmandupost.com/ money/2023/05/22/eu-nepal-trade-project-supportsupskilling-nepali-officials-on-international-trade

109. “AmCham Nepal and USAID to collaborate,” The Himalayan Times, May 10, 2023. https:// thehimalayantimes.com/business/amcham-nepaland-usaid-to-collaborate

110. “Government of Japan, Government of Nepal and UNDP to Promote Climate Resilience in Jajarkot”, UNDP, May 4, 2023. https://www.undp.org/nepal/ news/government-japan-government-nepal-andundp-promote-climate-resilience-jajarkot

111. “ADB approves $300 million loan to improve road connectivity, trade in Nepal”, Republica, May 17, 2023. https://myrepublica.nagariknetwork.com/ news/adb-approves-300-million-loan-to-improveroad-connectivity-trade-in-nepal-1/

112. ibid

113. Shrestha, Prithvi Man. “More Nepalis in South Korea are sending remittances through formal channels”, The Kathmandu Post, May 2, 2023. https:// kathmandupost.com/money/2023/05/02/morenepalis-in-south-korea-are-sending-remittancesthrough-formal-channels

114. “Nepal plans to reopen war-torn Iraq for Nepali migrant workers”, The Kathmandu Post, June 4, 2023. https://kathmandupost.com/money/2023/06/04/ nepal-plans-to-reopen-war-torn-iraq-for-nepalimigrant-workers

115. Dhungel, Kamal Raj. “Don’t count on remittance”, The Kathmandu Post, December 28, 2022. https:// kathmandupost.com/columns/2022/12/28/don-tcount-on-remittance

116. Pandey, Pawan. “Nepal removes fixed-term labour approvals”, The Kathmandu Post, March 19, 2023. https://kathmandupost.com/money/2023/03/19/ nepal-removes-fixed-term-labour-approvals

117. ibid

118. “News SSF scheme to cover 4m migrant workers”, The Himalayan Times, March 23, 2023. https:// thehimalayantimes.com/business/new-ssf-schemeto-cover-4mn-migrant-workers 119.

122. “Nepal’s external debts swell in rupee terms as dollar surges”, The Kathmandu Post, January 7, 2023. https://kathmandupost.com/money/2023/01/07/ nepal-s-external-debts-swell-in-rupee-terms-asdollar-surges

130. Bhattacherjee, K. (2023, June 1). ‘India to import 10,000 MW of electricity from Nepal: PM modi’, The Hindu, June 1, 2023, https://www.thehindu. com/news/national/india-to-import-10000-mw-ofelectricity-from-nepal-pm-modi/article66920782.ece 131.

139. ‘Rising debt liability adds to the government’s difficulties’, The Annapurna Express, March 13, 2023, https://theannapurnaexpress.com/news/rising-debtliability-adds-to-the-governments-difficulties-39493

140. "Current Macroeconomic and Financial Situation." Nepal Rastra Bank, June 2023. Accessed June 21, 2023. https://www.nrb.org.np/contents/ uploads/2023/06/Current-Macroeconomic-andFinancial-Situation-English-Based-on-Ten-Months-

150. Department of Customs. 2023. Foreign Trade Data. Department of Customs. Accessed June 21, 2023. https://www.customs.gov.np/page/fts-fy-207980.

June 21, 2023. https://kathmandupost.com/ money/2023/04/18/nepal-s-dairy-sector-flagssevere-milk-shortage

165. "Nepal’s dairy sector flags severe milk shortage." The Kathmandu Post, April 18, 2023. Accessed June 21, 2023. https://kathmandupost.com/ money/2023/04/18/nepal-s-dairy-sector-flagssevere-milk-shortage

166. lbid.

167. lbid.

168. "Nepal requests India for 300,000 tons of wheat." The Annapurna Express, Accessed June 21, 2023. https://theannapurnaexpress.com/news/nepalrequests-india-for-300000-tons-of-wheat-40790

169. lbid.

170. "Large cardamom exports hit record Rs6.36 billion in 9 months." The Kathmandu Post, May 21, 2023. Accessed June 21, 2023. https://kathmandupost. com/money/2023/05/21/large-cardamom-exportshit-record-rs6-36-billion-in-9-months

171. "Nepal imports agricultural products worth Rs 250 billion in 10 months." My Republica, Accessed June 21, 2023. https://myrepublica.nagariknetwork.com/ news/nepal-imports-agricultural-products-worth-rs250-billion-within-10-months/

172. lbid.

158. "Drought hits cardamom plantation in Taplejung." Khabarhub, Accessed June 21, 2023. https://english. khabarhub.com/2023/14/303755/

159.

160.

161. "Farmers worry about dwindling market for locally produced seeds." The Kathmandu Post, March 18, 2023. Accessed June 21, 2023. https:// kathmandupost.com/money/2023/03/18/farmersworry-about-dwindling-market-for-domesticallyproduced-seeds.

162. "Farmers suffer as chemical fertilisers get stalled in warehouses." The Kathmandu Post, April 14, 2023. Accessed June 21, 2023. https://kathmandupost. com/money/2023/04/14/farmers-suffer-as-chemicalfertilisers-get-stalled-in-warehouses.

163. lbid.

164. "Nepal’s dairy sector flags severe milk shortage." The Kathmandu Post, April 18, 2023. Accessed

173. "Traders stop potato, onion imports after VAT decision." The Kathmandu Post, June 12, 2023. Accessed June 21, 2023. https://kathmandupost. com/money/2023/06/12/traders-stop-potato-onionimports-after-vat-decision

174. "Current Macroeconomic and Financial Situation." Nepal Rastra Bank, June 2023. Accessed June 21, 2023. https://www.nrb.org.np/contents/ uploads/2023/06/Current-Macroeconomic-andFinancial-Situation-English-Based-on-Ten-Monthsdata-of-2022.23.pdf

175. lbid.

176. lbid.

177. "Lumpy skin epidemic sweeps nation." The Kathmandu Post, June 16, 2023. Accessed June 21, 2023. https://kathmandupost.com/ national/2023/06/16/lumpy-skin-epidemic-sweepsnation.

178. "Bird flu-affected farmers receive compensations." My Republica, Accessed June 21, 2023. https://

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179. "Sahaj Challenge Fund Round 3 launched to promote agribusiness." The Kathmandu Post, May 26, 2023. Accessed June 21, 2023. https://kathmandupost. com/money/2023/05/26/sahaj-challenge-fundround-3-launched-to-promote-agribusiness

180. "PMC distributes agriculture equipment to farmers on subsidy." Khabarhub, Accessed June 21, 2023. https://english.khabarhub.com/2023/22/297574/

181. "Ministry of Agriculture and Livestock Development receives record-high budget allocation." My Republica, Accessed June 21, 2023. https:// myrepublica.nagariknetwork.com/news/ministryof-agriculture-and-livestock-development-receivesrecord-high-budget-allocation/

182. Ministry of Finance. “Economic Survey 2022/23,” Government of Nepal. May 28, 2023. https://www. mof.gov.np/site/publication-detail/3248

183. Ibid

184. Ibid

185. National Statistics Office. “National Population and Housing Census 2021,” Government of Nepal. March 2023. https://censusnepal.cbs.gov.np/results/files/ result-folder/National%20Report_English.pdf

186. Ministry of Finance. “Budget Statement of Fiscal year 2080/81,” Government of Nepal. May, 2023. https://www.mof.gov.np/uploads/ document/file/1686554933_1685371031_Budget_ Sppech_2080-81_Final.pdf

187. “Fridays for fun,” The Kathmandu Post. April 27, 2023. https://kathmandupost.com/ editorial/2023/04/27/fridays-for-fun

188. Rauniyar, Ruby. “KMC’s 'Book Free Friday' program elates students,” myRepublica. April 26, 2023. https://myrepublica.nagariknetwork.com/news/kmcs-book-free-friday-program-elates-students/

189. Ojha, Anup. “‘Textbook-free Friday’ initiative welcomed but also doubted,” The Kathmandu Post. April 27, 2023. https://kathmandupost.com/ kathmandu/2023/04/27/textbook-free-fridayinitiative-welcomed-but-also-doubted

190. Kaini, Sudip. “Over 300 private schools in metropolis yet to submit scholarship list,” The Kathmandu Post. June 6, 2023. https://kathmandupost.com/ kathmandu/2023/06/06/over-300-private-schools-inmetropolis-yet-to-submit-scholarship-list

191. Kathmandu Metropolitan City. “Education Management Regulation 2074,” Government of Nepal. March 2018.

192. “KMC forces private schools to provide scholarship to students,” The Himalayan Times. June 22, 2023. https://thehimalayantimes.com/kathmandu/kmcforces-private-schools-to-provide-scholarship-tostudents

193. Ojha, Anup. “As KMC jumps into action, schools rush to provide scholarship details,” The Kathmandu Post. June 7, 2023. https://kathmandupost.com/ kathmandu/2023/06/07/as-kmc-jumps-into-actionschools-rush-to-provide-scholarship-details

194. “Pokhara metropolis signs performance contract with principals to enhance education quality of community schools,” myRepublica. May 9, 2023. https://myrepublica.nagariknetwork.com/news/ pokhara-metropolis-signs-performance-contractwith-principals-to-enhance-education-quality-ofcommunity-schools/

195. “This year students get textbooks on time, the first case after 1990,” the Rising Nepal. April 17, 2023. https://risingnepaldaily.com/news/25520

196. “Govt tells schools to not give entrance exams for class 1 admission,” OnlineKhabar. January 13, 2023. https://english.onlinekhabar.com/dont-giveentrance-exams-class-1.html

197. Rai, Nunuta. “A new wave: These community schools in Kathmandu outperform private counterparts,” OnlineKhabar. April 30, 2023. https://english. onlinekhabar.com/exemplary-community-schoolskathmandu.html

198. “One can now obtain an NOC from the comfort of one’s home,” myRepublica. May 15, 2023. https:// myrepublica.nagariknetwork.com/news/one-cannow-obtain-a-no-objection-certificate-noc-from-thecomfort-of-their-home/

199. “Students going abroad can now apply and print NOC online,” Online Khabar. May 15, 2023. https:// english.onlinekhabar.com/apply-and-print-noconline.html

200. Ghimire, Binod. “Falling enrolment prompts Tribhuvan University to merge colleges under it,” The Kathmandu Post. June 15, 2023. https:// kathmandupost.com/national/2023/06/15/fallingenrolment-prompts-tribhuvan-university-to-mergecolleges-under-it

201. Ghimire, Binod. “Falling enrollments worry Nepali universities,” The Kathmandu Post. April 12, 2023.

https://kathmandupost.com/national/2023/04/12/ falling-enrollments-worry-nepali-universities

202. Rai, Nunuta. “Why is the number of students decreasing in all Nepali universities?,” OnlineKhabar. April 6, 2023. https://english.onlinekhabar.com/ students-fall-nepali-universities.html

203. Ministry of Finance. “Economic Survey 2022/23,” Government of Nepal. May 28, 2023. https://www. mof.gov.np/site/publication-detail/3248

204. Office of the Auditor General. “60th Annual Report of the Auditor General, 2079,” Government of Nepal. April 2023. https://oag.gov.np/menu-category/926/ en

205. Bhatta, Tika Prasad. “Many students in dilemma after local unit decides to close or downgrade schools,” The Kathmandu Post. April 20, 2023. https:// kathmandupost.com/province-no-3/2023/04/20/ many-students-in-dilemma-after-local-unit-decidesto-close-or-downgrade-schools

206. GC, Samsher Bikram. “Community schools in Pyuthan Municipality blame downgrades and mergers for low enrolment,” The Kathmandu Post. May 31, 2023. https://kathmandupost.com/provinceno-5/2023/05/31/community-schools-in-pyuthanmunicipality-blame-downgrades-and-mergers-forlow-enrolment

207. “Rich school, poor school,” The Kathmandu Post. April 20, 2023. https://kathmandupost.com/ editorial/2023/04/20/rich-school-poor-school

208. Rai, Nunuta. “Schools in rural Nepal look deserted. Who is responsible for the failure?,” OnlineKhabar. May 30, 2023. https://english.onlinekhabar.com/ schools-in-rural-nepal-deserted.html

209. Jha, Abdhesh Kumar. “Musahar children in Saptari village are still deprived of education,” The Kathmandu Post. March 2, 2023. https:// kathmandupost.com/province-no-2/2023/03/02/ musahar-children-in-saptari-village-are-still-deprivedof-education

210. Rauniyar, Ruby. “71.5 percent candidates fail in Nepal Engineering Council’s license examination,” my Republica. March 29, 2023. https://myrepublica. nagariknetwork.com/news/71-5-percent-candidatesfail-in-nepal-engineering-council-s-licenseexamination/

211. “Only 28.5 percent of examinees pass engineer’s license exam,” myRepublica. Match 28, 2023. https:// myrepublica.nagariknetwork.com/news/only-28-5percent-of-examinees-pass-engineer-s-license-exam/

212. Basnet, Bibhav, and Pooja Koirala. “Low enrolment in pre-primary education: Study report on reasons and possible solutions for low enrolment in early childhood education and development centers in Nepal,” UNICEF Nepal. May, 2023. https://www. unicef.org/nepal/reports/low-enrolment-preprimary-education#:~:text=Highlights,four%20 was%2068.16%20per%20cent

213. Ministry of Finance. “Budget Statement of Fiscal year 2080/81,” Government of Nepal. May, 2023. https://www.mof.gov.np/uploads/ document/file/1686554933_1685371031_Budget_ Sppech_2080-81_Final.pdf

214. Ministry of Finance. “Budget Statement of Fiscal year 2080/81,” Government of Nepal. May, 2023. https://www.mof.gov.np/uploads/ document/file/1686554933_1685371031_Budget_ Sppech_2080-81_Final.pdf

215. Ministry of Finance. “Budget Statement of Fiscal year 2080/81,” Government of Nepal. May, 2023. https://www.mof.gov.np/uploads/ document/file/1686554933_1685371031_Budget_ Sppech_2080-81_Final.pdf

216. “Mid-day meal becoming effective in Dang schools,” Khabarhub. May 13, 2023. https://english.khabarhub. com/2023/13/303695/

217. “WB providing concessional loan of $120 million and grant of $19.7 million to strengthen Nepal’s school sector,” myRepublica. June 1, 2023. https:// myrepublica.nagariknetwork.com/news/wbproviding-concessional-loan-of-120-million-andgrant-of-19-7-million-to-strengthen-nepal-s-schoolsector/

218. “Government to accept grant worth 50 million Euros,” myRepublica. March 21, 2023. https:// myrepublica.nagariknetwork.com/news/governmentto-accept-grant-worth-50-million-euros/

219. Economic Survey 2079/80, Ministry of Finance, May 29, 2023. Last updated June 12, 2023. https://www. mof.gov.np/site/publication-detail/3248 pg 142 (172)

220. Economic Survey 2079/80, Ministry of Finance, May 29, 2023. Last updated June 12, 2023. https://www. mof.gov.np/site/publication-detail/3248 pg 142 (172)

221. Ibid

222. “Monthly Operational Report for the Month of Baisakh 2080”, Nepal Electricity Authority, May 15, 2023. https://www.nea.org.np/admin/assets/ uploads/ldc/NMOR%202080_01.pdf

223. Ibid

224. Ibid

225. Ibid

226. “Tax rate on entry-level electric vehicles increased," Online Khabar, May 10, 2023. https://english. onlinekhabar.com/tax-entry-level-electric-vehicles. html

227. Nepal Customs Department. "Foreign Trade Statistics (FTS) FY 2079/80," Nepal Customs Department, accessed on June 20, 2023. https://www.customs. gov.np/page/fts-fy-207980.

228. "Changing policy is hurting Nepal's plan to switch to EVs, experts say," The Kathmandu Post, accessed on June 20, 2023. https://kathmandupost.com/ money/2023/05/15/changing-policy-is-hurting-nepals-plan-to-switch-to-evs-experts-say.

229. “Kathmandu one of world's most polluted city," The Himalayan Times. March 17, 2023. https:// thehimalayantimes.com/environment/kathmanduone-of-worlds-most-polluted-city

230. “More pre-monsoon forest fires in Nepal," Nepali Times. May 13, 2023. https://www.nepalitimes.com/ here-now/more-pre-monsoon-forest-fires-in-nepal

231. “Forest fires in surrounding districts make Nepal capital Kathmandu world’s most polluted city,” The Straits Times. April 18, 2023. https://www. straitstimes.com/asia/south-asia/forest-fires-insurrounding-districts-make-nepal-capital-kathmanduworld-s-most-polluted-city

232. Economic Survey 2079/80, Ministry of Finance, pg. 143, May 29, 2023. Last updated June 12, 2023. https://www.mof.gov.np/site/publication-detail/3248

233. BRBIP https://www.brbip.gov.np/outputs.php

234. Economic Survey 2079/80, Ministry of Finance, May 29, 2023. Last updated June 12, 2023. https://www. mof.gov.np/site/publication-detail/3248

235. Bhuwan Sharma, “Ministry of Urban Development blames KMC for neglecting waste management duty,” MyRepublica, April 23, 2023. https://myrepublica. nagariknetwork.com/news/ministry-of-urbandevelopment-blames-kmc-for-neglecting-wastemanagement-duty/

236. Anup Ojha, “Locals in Nuwakot and Dhading stop garbage trucks over ‘broken promises’,” The Kathmandu Post, July 18, 2023. https:// kathmandupost.com/valley/2023/07/18/locals-innuwakot-and-dhading-stop-garbage-trucks-over-

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237. “Negotiations between locals and govt over landfill site end inconclusively, thanks to KMC representative,” My Repiublica, July 19, 2023. https:// myrepublica.nagariknetwork.com/news/negotiationsbetween-locals-and-govt-over-landfill-site-endinconclusively-thanks-to-kmc-representative/

238. “Budget Speech 2023/24," Ministry of Finance. May 2023. Last updated 12 June, 2023. https://www.mof. gov.np/site/publication-detail/3249

239. “Major highlights of budget for fiscal year 2023/24,” MyRepublica. May 29, 2023. https://myrepublica. nagariknetwork.com/news/major-highlights-ofbudget-for-fiscal-year-2023-24-with-full-text/

240. Clean Cooking Alliance. “Nepal Project," accessed on June 12, 2023. https://cleancooking.org/industrydevelopment/nepal-project/

241. “Govt to provide free electricity of up to 50 units,” Nepal Live Today. May 19, 2023. https://www. nepallivetoday.com/2023/05/19/govt-to-providefree-electricity-of-up-to-50-units/

242. “Government to distribute free electric stoves to students,” Nepal News, June 8, 2022, accessed on June 19, 2022. https://nepalnews.com/s/nation/ government-to-distribute-free-electric-stoves-tostudents

243. Climate and Clean Air Coalition. “Call for Proposals: Nepal – Develop a National SLCP Plan and National Methane Roadmap [NP-23-002]," April 12, 2023, accessed on June 18, 2023. https://www.ccacoalition. org/en/content/nepal-%E2%80%93-developnational-slcp-plan-and-national-methane-roadmapnp-23-002

244. “Press release on departure of Prime Minister Pushpa Kamal Dahal for the official visit to India,” Government of Nepal, May 31, 2023. https://mofa. gov.np/press-release-on-departure-of-rt-hon-primeminister-pushpa-kamal-dahal-prachanda-for-theofficial-visit-to-india/

245. “Nepal and India signed seven agreements including lower Arun and petroleum pipeline,” Spotlight Nepal, June 1, 2023. https://www.spotlightnepal. com/2023/06/01/nepal-and-india-signed-sevenagreements-including-lower-arun-and-petroleumpipeline/

246. “Petroleum pipeline to be uilt with an investment of INR 17 billion,” MyRepublica, May 26, 2023. https:// myrepublica.nagariknetwork.com/news/petroleumpipeline-to-be-built-with-an-investment-of-inr-17-

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247. “How India is helping Nepal to host a strategic petroluem reserve after Prachanda’s visit,” India Narrative, June 13, 2023. https://www.indianarrative. com/economy-news/how-india-is-helping-nepal-tohost-a-strategic-petroleum-reserve-after-prachandasvisit-145272.html

248. “Pipeline plan slammed for violating eco commitments,” The Kathmandu Post, May 26, 2023. https://kathmandupost.com/money/2023/05/26/ pipeline-plan-slammed-for-violating-ecocommitments

249. “Trade deficit at Rs 1.2 trillion in 10 months,” The Himalayan Times, May 22, 2023. https:// thehimalayantimes.com/business/trade-deficit-at-rs12-trillion-in-10-months

250. Nepal commits extra funds to MCC-funded transmission line projects,” The Kathmandu Post, May 29, 2023. https://kathmandupost.com/ national/2023/05/29/nepal-commits-extra-funds-tomcc-funded-transmission-line-projects

251. “Market for power export getting assured: NEA Managing Director Ghishin,” Khabarhub, May 22, 2023. https://english.khabarhub. com/2023/22/304728/

252. “Nepal’s electricity production reaches 2,689.83 MW; capacity to cross 2,800 MW by this FY end,” MyRepublica. April 15, 2023. https://myrepublica. nagariknetwork.com/news/nepal-s-electricityproduction-becomes-2-689-83-mw-capacity-to-cross2-800-mw-by-this-fy-end/

253. “Budget Speech 2023/24," Ministry of Finance. May 2023. Last updated June 12, 2023. https://www.mof. gov.np/site/publication-detail/3249

254. “SJVN bags yet another Arun River-based hydro project,” The Farsight Nepal, April 20, 2023. https:// farsightnepal.com/news/144

255. “Landslide in Arun III dam highlights threats to Nepal’s hydropower projects,” The Kathmandu Post, May 1, 2023. https://kathmandupost.com/climateenvironment/2023/05/01/landslide-in-arun-iii-damhighlights-threats-to-nepal-s-hydropower-projects

256. Prithvi Man Shrestha, “Nepal, Bangladesh agree to pursue India deal to start power trade from this wet season,” The Kathmandu Post, May 17, 2023. https:// kathmandupost.com/national/2023/05/17/nepalbangladesh-agree-to-pursue-india-deal-to-startpower-trade-from-this-wet-season

257. Prithvi Man Shrestha, “Nepal to change projects whose power will be sold to Bangladesh,” The Kathmandu Post, July 30, 2023. https:// kathmandupost.com/national/2023/07/30/nepalto-change-projects-whose-power-will-be-sold-tobangladesh

258. International Hydropower Association, “Nepal to become a centre of excellence in sustainable hydropower with new partnership,” March 2, 2023. https://www.hydropower.org/news/nepalto-become-a-centre-of-excellence-in-sustainablehydropower

259. The Kathmandu Post, "Nepal Oil Corp slashes fuel prices," April 3, 2023. https://kathmandupost.com/ national/2023/04/03/nepal-oil-corp-slashes-fuelprices.

260. My Republica, "Nepal's electricity production becomes 2,689.83 MW, capacity to cross 2,800 MW by this FY-end," April 15, 2023. https://myrepublica. nagariknetwork.com/news/nepal-s-electricityproduction-becomes-2-689-83-mw-capacity-to-cross2-800-mw-by-this-fy-end/.

261. NREP Nepal, "Municipal officials gain insights into renewable energy." https://www.nrepnepal. com/2023/02/municipal-officials-gain-insights-intorenewable-energy/.

262. Alternative Energy Promotion Centre (AEPC), "Information Package to Apply for SECF Support," June 2021. https://www.aepc.gov.np/uploads/docs/ information-package-to-apply-for-secf-supportjune-1622704715.pdf.

263. Sangam Prasain,"Nepal pins hopes on PM's visit as airports languish," The Kathmandu Post, May 31 2023. https://kathmandupost.com/ money/2023/05/31/nepal-pins-hopes-on-pm-s-visitas-airports-languish.

264. Al Jazeera, "Nepal leader to seek energy, new air route deals on India visit," May 31, 2023. https:// www.aljazeera.com/news/2023/5/31/nepal-leaderto-seek-energy-new-air-route-deals-on-india-visit.

265. My Republica, "PM addresses Power Summit 2023, highlights role of green energy for Nepal's transition to a strong economy," April 18, 2023. https://myrepublica.nagariknetwork.com/news/ pm-addresses-power-summit-2023-highlights-roleof-green-energy-for-nepal-s-transition-to-strongeconomy/.

266. Ramesh Kumar, "Nepal-India power play," Nepali Times, June 6, 2023. https://www.nepalitimes.com/

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267. Mukesh Pokhrel, “Nepal hydropower drive puts India over China, but what's the risk?” The Japan Times, May 25, 2023. https://www.japantimes.co.jp/ news/2023/05/25/asia-pacific/india-china-tussle-fornepal-influence/

268. Rajesh Khanal, “Nepal within an inch of transforming into electricity self-reliant economy,” MyRepublica, May 16, 2023. https://myrepublica.nagariknetwork. com/news/nepal-within-an-inch-of-transforminginto-energy-self-reliant-economy/

269. Ministry of Finance. “Economic Survey 2022/23,” Government of Nepal. May 28, 2023. https://www. mof.gov.np/site/publication-detail/3248

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281. Poudel, Arjun. “Cholera vaccination drive launched in select Kathmandu localities,” The Kathmandu Post. May 25, 2023. https://kathmandupost.com/ health/2023/05/25/cholera-vaccination-drivelaunched-in-select-kathmandu-localities

282. Poudel, Arjun. “Around 14,000 Kathmandu residents skipped cholera vaccine,” The Kathmandu Post. June 8, 2023. https://kathmandupost.com/ health/2023/06/08/around-14-000-kathmanduresidents-skipped-cholera-vaccine;

283. Poudel, Arjun. “Unvaxxed children could trigger major disease outbreaks,” The Kathmandu Post. June 14, 2023. https://kathmandupost.com/ health/2023/06/14/unvaxxed-children-could-triggermajor-disease-outbreaks

284. National Statistics Office. “National Population and Housing Census,” Government of Nepal. May 2023. https://censusnepal.cbs.gov.np/results/downloads/ national

275. Pun, Sher Bahadur. “Nepal’s experience with XBB.1.16,” The Kathmandu Post. April 18, 2023. https://kathmandupost.com/columns/2023/04/18/ nepal-s-experience-with-xbb-1-16

276. Poudel, Arjun. “Covid cases rise again, new virus variant suspected,” The Kathmandu Post. March 29, 2023. https://kathmandupost.com/ health/2023/03/29/covid-cases-rise-again-new-virusvariant-suspected

277. Poudel, Arjun. “Most polymerase chain reaction test labs shut for months,” The Kathmandu Post. March 26, 2023. https://kathmandupost.com/ health/2023/03/26/most-polymerase-chain-reactiontest-labs-shut-for-months

278. “Nepal COVID-19 protocol revised: masks now voluntary,” myRepublica. June 3, 2023. https:// myrepublica.nagariknetwork.com/news/nepal-covid19-protocol-revised-masks-now-voluntary/

279. Poudel, Arjun. “Unvaxxed children could trigger major disease outbreaks,” The Kathmandu Post. June 14, 2023. https://kathmandupost.com/ health/2023/06/14/unvaxxed-children-could-triggermajor-disease-outbreaks

280. Poudel, Arjun. “Infants aged less than nine months to be jabbed against measles,” The Kathmandu Post. May 19, 2023. https://kathmandupost.com/ health/2023/05/19/infants-aged-less-than-nine-

285. Gautam, Krishna P., and Tripti Shahi. “Health centre in Baglung’s Ramuwa village launches birthing services,” The Kathmandu Post. May 4, 2023. https://kathmandupost.com/health/2023/04/28/ health-centre-in-baglung-s-ramuwa-village-launchesbirthing-services

286. Anmol, Amrita. “Lumbini fails to curb maternal mortality despite good infrastructure,” The Kathmandu Post. April 6, 2023. https:// kathmandupost.com/health/2023/04/06/lumbinifails-to-curb-maternal-mortality-despite-goodinfrastructure

287. Ministry of Finance. “Budget Statement of Fiscal year 2080/81,” Government of Nepal. May, 2023. https://www.mof.gov.np/uploads/ document/file/1686554933_1685371031_Budget_ Sppech_2080-81_Final.pdf

288. Ibid.

289. Ministry of Finance. “Economic Survey 2023/24,” Government of Nepal. May 2023. https://www.mof. gov.np/site/publication-detail/3248

290. Ministry of Finance. “Budget Statement of Fiscal year 2080/81,” Government of Nepal. May, 2023. https://www.mof.gov.np/uploads/ document/file/1686554933_1685371031_Budget_ Sppech_2080-81_Final.pdf

291. Chaulagain, Pusparaj. “Doctors’ reluctance to serve remote Nepal amid low pay aggravates public health

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292. Chaulagain,Pusparaj. “Deprived of respect and remuneration, nurses in Nepal leave in droves,” OnlineKhabar. June 8, 2023. https://english. onlinekhabar.com/nurses-in-nepal-leave-moneyrespect.html

293. “National Vitamin 'A' campaign begins from today,” myRepublica. April 19, 2023. https://myrepublica. nagariknetwork.com/news/national-vitamin-acampaign-begins-from-today/

294. “Nationwide Vitamin ‘A’ campaign from today,” Radio Nepal. April 19, 2023. https://onlineradionepal. gov.np/en/2023/04/19/352001.html

295. “Disasters in Nepal result in severe malnutrition in villages,” OnlineKhabar. April 13, 2023. https:// english.onlinekhabar.com/malnutrition-disasters-innepal.html

296. “3.2 million children under five to get Vitamin A, deworming pill,” the Kathmandu Post. April 18, 2023. https://kathmandupost.com/health/2023/04/18/32-million-children-under-five-to-get-vitamin-adeworming-pill

297. Nepal Health Research Council, Ministry of Health and Population, Institute for Health Metrics and Evaluation, Monitoring Evaluation and Operational Research. “Nepal Burden of Disease 2019: A Country Report based on the 2019 Global Burden of Disease Study,” Government of Nepal. 2021. https://nhrc.gov. np/wp-content/uploads/2022/02/BoD-Report-Bookinclud-Cover-mail-6_compressed.pdf

298. Poudel, Arjun. “Obesity, chronic diseases are catching Nepalis young as lifestyles change,” the Kathmandu Post. March 9, 2023. https:// kathmandupost.com/health/2023/03/09/obesitychronic-diseases-are-catching-nepalis-young-aslifestyles-change

299. “Japan hands over medical equipment to Health Center in Bhaktapur,” The Himalayan Times. April 11, 2023. https://thehimalayantimes.com/kathmandu/ japan-hands-over-medical-equipment-to-healthcenter-in-bhaktapur

300. Poudel, Arjun. “Superspeciality cancer diagnostic tests to start soon,” The Kathmandu Post. May 24, 2023. https://kathmandupost.com/ health/2023/05/24/superspeciality-cancerdiagnostic-tests-to-start-soon

301. Ministry of Health and Population. “Health

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302. “KMC Mayor Balen warns of “closing” administrative services of 68 health institutions not complying with necessary obligations,” Khabarhub. May 31, 2023. https://english.khabarhub.com/2023/31/305734/

303. “Mayor Balen submits list of 68 hospitals that do not provide target beneficiaries free medical treatment to health minister,” myRepublica. May 31, 2023. https://myrepublica.nagariknetwork.com/news/ mayor-balen-submits-list-of-68-hospitals-that-do-notprovide-target-beneficiaries-free-medical-treatmentto-health-minister/

304. Nepal Telecommunications Authority. February 2023–March 2023. MIS Report. Nepal Telecommunications Authority. Accessed June 21, 2023. https://nta.gov. np/wp-content/uploads/2023/03/MIS-Mangsir-2079. pdf

305. lbid.

306. lbid.

307. lbid.

308. Nepal Rastra Bank. 2023. Current Macroeconomic and Financial Situation of Nepal. Nepal Rastra Bank. Accessed June 21, 2023. https://www.nrb.org.np/ contents/uploads/2023/02/Current-Macroeconomicand-Financial-Situation-English-Based-on-TenMonths-data-of-2022.23.pdf.

309. Nepal Rastra Bank. 2023. Payment Oversight Report. Nepal Rastra Bank. Accessed June 21, 2023. https://www.nrb.org.np/contents/ uploads/2023/02/2079_09_P-S-Indicators-of-Poush-. pdf.

310. "Digital services provided by foreign firms to be taxed from tomorrow." The Kathmandu Post, July 16, 2022. Accessed June 22, 2023. Full link: https:// kathmandupost.com/money/2022/07/16/digitalservices-provided-by-foreign-firms-to-be-taxed-fromtomorrow.

311. "Tax on fiber cable import to go up, could increase internet price." NepaliTelecom, Accessed June 22, 2023. https://www.nepalitelecom.com/tax-on-fibercable-import-to-go-up-could-increase-internet-price

312. "NTA Mobile Device Management (MDMS)." Nepal Telecommunication Authority (NTA). Accessed June 22, 2023. https://www.nepalitelecom.com/ntamobile-device-management-mdms

313. "Mobile Device Management System Nepal." GadgetByte Nepal, Accessed June 22, 2023. https://www.gadgetbytenepal.com/mobile-devicemanagement-system-nepal/

314. "Govt wins case against Ncell's parent company Axiata that has claimed compensation of Rs 66 billion." My Republica, Accessed June 22, 2023. https://myrepublica.nagariknetwork.com/news/govtwins-case-against-ncell-s-parent-company-axiatathat-has-claimed-compensation-of-rs-66-billion/

315. Nepal Telecommunication Authority. "OTT Regulatory Framework (Draft)." Accessed June 22,2023. https://nta.gov.np/uploads/contents/ OTT%20Regulatory%20Framework%20(Draft).pdf

316. "Nepal Telecommunication Authority (NTA)." Accessed June 22, 2023. https://www.nta.gov.np/

317. "NTA warns service provider companies not to increase internet tariff." My Republica, Accessed June 22, 2023. https://myrepublica.nagariknetwork.com/ news/nta-warns-service-provider-companies-not-toincrease-internet-tariff/

318. "Broadband internet service in 6,743 wards." NepalNews, Accessed June 22, 2023. https:// www.nepalnews.com/s/science-and-technology/ broadband-internet-service-in-6-743-wards

319. Economic Survey of Nepal 2079/80. Ministry of Finance, Government of Nepal. Kathmandu, 2023. PDF.

320. https://www.mof.gov.np/site/publicationdetail/3249

321. Ibid

322. Ibid

323. Preparatory work for Rs7.34 billion Siddhababa tunnel project begins. Kathmandu Post. 27 May 2023. https://kathmandupost.com/money/2023/05/27/ preparatory-work-for-rs7-34-billion-siddhababatunnel-project-begins-1685194294

324. Ibid

325. Newly opened cable car in Butwal draws hordes of tourists. Kathmandu Post. 31 May 2023. https:// kathmandupost.com/money/2023/05/31/newlyopened-cable-car-in-butwal-draws-hordes-of-tourists

326. Ibid

327. Dodhara-Chandani dry port gets environmental approval. Kathmandu Post. 22 May 2023. https:// kathmandupost.com/money/2023/05/22/dodhara-

chandani-dry-port-gets-environmental-approval

328. Ibid

329. Ibid

330. NEA plans 20 substations in Kathmandu Valley, but concerns over land acquisition remain. Kathmandu Post. 24 May 2023. https://kathmandupost.com/ valley/2023/05/24/nea-plans-20-substationsin-kathmandu-valley-but-concerns-over-landacquisition-remain

331. Ibid

332. Ibid

333. Ibid

334. Karnali highway death trap for travellers. English Onlinekhabar. 2023. https://english.onlinekhabar. com/karnali-highway-death-trap-travellers.html

335. Ibid

336. Ibid

337. Nepal gifts 669MW Lower Arun to India's SJVN. Kathmandu Post. 14 April 2023. https:// kathmandupost.com/money/2023/04/14/nepal-gifts669mw-lower-arun-to-india-s-sjvn

338. ibid

339. ibid

340. "Road upgrade work along Muglin-Malekhu section begins." English Khabarhub, 28 Mar. 2023, https:// english.khabarhub.com/2023/28/305300/

341. Road upgrade work along Muglin-Malekhu section begins. Kathmandu Post. 30 April 2023. https:// kathmandupost.com/province-no-3/2023/04/30/ road-upgrade-work-along-muglin-malekhu-sectionbegins

342. Ibid

343. Ibid

344. Ibid

345. Preparatory work for Rs7.34 billion Siddhababa tunnel project begins. Kathmandu Post. 27 May 2023. https://kathmandupost.com/money/2023/05/27/ preparatory-work-for-rs7-34-billion-siddhababatunnel-project-begins-1685194294

346. Service, Himalayan News. “Dragon Boat Race Festival Kicks off in Pokhara.” The Himalayan Times, June 24, 2023. https://thehimalayantimes.com/nepal/dragonboat-race-festival-kicks-off-in-pokhara

347. Online Khabar, “99,426 foreign tourists visit Nepal in March 2023, the highest since the Covid years,” 2 April, 2023. https://english.onlinekhabar.com/ foreign-tourists-march-2023.html

348. "Current Macroeconomic and Financial Situation: English Based on Nine Months data of 2022/23." Nepal Rastra Bank. Accessed June 20, 2023. https:// www.nrb.org.np/contents/uploads/2023/05/CurrentMacroeconomic-and-Financial-Situation-EnglishBased-on-Nine-Months-data-of-2022.23.pdf.

349. Ibid

350. The Annapurna Express, “One more hotel going public,” 22 March , 2023. https:// theannapurnaexpress.com/news/one-more-hotelgoing-public-39957.

351. "Current Macroeconomic and Financial Situation: English Based on Nine Months data of 2022/23." Nepal Rastra Bank. Accessed June 20, 2023. https:// www.nrb.org.np/contents/uploads/2023/05/CurrentMacroeconomic-and-Financial-Situation-EnglishBased-on-Nine-Months-data-of-2022.23.pdf.

352.

.” Ministry of Finance, Accessed June 16, 2023, https://www.mof.gov.np/ site/publication-detail/3248.

June 20, 2023. https://myrepublica.nagariknetwork. com/news/nepal-not-included-in-chinese-govt-stourist-destinations-list/.

362. My Republica. "China adds Nepal to list of approved outbound tourist destinations for citizens." My Republica. Accessed June 20, 2023. https:// myrepublica.nagariknetwork.com/news/chinaadds-nepal-to-list-of-approved-outbound-touristdestinations-for-citizens/.

363. The Himalayan Times. "Mountain Clean-Up Campaign 2023 collects over 35 tons of waste from Mt Everest, other peaks." The Himalayan Times. Accessed June 20, 2023. https://thehimalayantimes. com/nepal/mountain-clean-up-campaign-2023collects-over-35-tons-of-waste-from-mt-everestother-peaks/.

364. The Annapurna Express, “One more hotel going public,” 22 March , 2023. https:// theannapurnaexpress.com/news/one-more-hotelgoing-public-39957.

365. Ibid

366. The Annapurna Express, “One more hotel going public,” 22 March , 2023. https:// theannapurnaexpress.com/news/one-more-hotelgoing-public-39957.

367. Economic Survey – 2022/23, Ministry of Finance, Government of Nepal, 2023.

368. Ibid

357. Online Khabar, “99,426 foreign tourists visit Nepal in March 2023, the highest since the Covid years,” 2 April, 2023. https://english.onlinekhabar.com/ foreign-tourists-march-2023.html

358. My Republica. "Nepal receives more than 300,000 foreign visitors in the last four months." My Republica. Accessed June 20, 2023. https:// myrepublica.nagariknetwork.com/news/nepalreceives-more-than-300-000-foreign-visitors-in-lastfour-months/.

359. Ministry of Finance, Nepal. "ES 2080 Final."

Ministry of Finance, Nepal. Accessed June 20, 2023. https://www.mof.gov.np/uploads/document/ file/1686553444_1685270309_ES_2080_Final_PDF. pdf

360. Ibid

361. My Republica. "Nepal not included in Chinese govt's tourist destinations list." My Republica. Accessed

369. ‘Nepal-China Friendship Dragon Boat Race Festival to Start on June 23’,The Kathmandu Post, June 8, 2023, https://kathmandupost.com/money/2023/06/08/ nepal-china-friendship-dragon-boat-race-festival-tostart-on-june-23.

370. 'Nepal-China friendship dragon boat race festival kicks off', The Kathmandu Post, June 23, 2023, https://kathmandupost.com/money/2023/06/23/ nepal-china-friendship-dragon-boat-race-festivalkicks-off.

371. ‘Nepal, India Sign Pact for Cross-Border Digital Payment’, The Kathmandu Post, June 1, 2023, https:// kathmandupost.com/money/2023/06/01/hed-nepalindia-sign-pact-for-cross-border-digital-payment.

372. Ibid

373. ‘Everest Region, Nepal Tourism Board Dispute over Solo Trek Ban Heats Up’, The Kathmandu Post, April 3, 2023, https://kathmandupost.com/ money/2023/04/03/everest-region-nepal-tourism-

board-dispute-over-solo-trek-ban-heats-up.

374. ‘Nepal Int’l Tourism Campaign Begins’, The Himalayan Times, June 2, 2023, https:// thehimalayantimes.com/business/nepal-intl-tourismcampaign-begins.

375. ‘Chinese Language Training Course Resumes for Nepal’s Tourism Professionals’, Xinhua, February 11, 2023,

376. “Nepal Rastra Bank, Current Macroeconomic and Financial Situation of Nepal Based on Nine Months Data Ending Mid-April, 2022/23”, May 10, 2023. Current-Macroeconomic-and-Financial-SituationEnglish-Based-on-Nine-Months-data-of-2022.23.pdf (nrb.org.np)

377. Ibid

378. “Banks fail to increase lending despite excess liquidity”, My Republica, April 11, 2023. Banks fail to increase lending despite excess liquiditymyRepublica - The New York Times Partner, Latest news of Nepal in English, Latest News Articles (nagariknetwork.com)

379. “NPLs of Nepali banks reach 3.02%, almost threefolds in the past nine months of the current FY”, My Republica, April 25,2023. NPLs of Nepali banks reach 3.02 percent, almost three-folds in the past nine months of the current FY - myRepublica - The New York Times Partner, Latest news of Nepal in English, Latest News Articles (nagariknetwork.com)

380. “NRB permits BFIs to alter interest rates on monthly basis”, My Republica, May 10, 2023. NRB permits BFIs to alter interest rates on monthly basis - myRepublica - The New York Times Partner, Latest news of Nepal in English, Latest News Articles (nagariknetwork.com)

381. “Finance Ministry form taskforce to merge Nepal Bank and Banijya Bank”, Nepal Khabar, April 30 2023. https://en.nepalkhabar.com/news/detail/4073/

382. “Banks pays less income tax this fiscal year”, The Annapurna Express, May 24 2023. Banks paid less income tax this fiscal - The Annapurna Express

383. “Monetary Policy third quarter review”, Nepal Rastra Bank, May 12, 2023.3RD_QTR_Review_Final.pdf (nrb. org.np)

384. “Budget of NPR 1.751 trillion (USD 13.34 billion) announced for fiscal year 2023/24”, My Republica, May 29, 2023. Budget of Rs 1.751 trillion announced for fiscal year 2023/24 - myRepublica - The New York Times Partner, Latest news of Nepal in English, Latest News Articles (nagariknetwork.com)

385. “Major highlights of budget for fiscal year 2023/24”, My Republica, May 29, 2023. Major highlights of budget for fiscal year 2023/24 - myRepublica - The New York Times Partner, Latest news of Nepal in English, Latest News Articles (nagariknetwork.com)

386. “Current Macroeconomic and Financial Situation of Nepal of Nepal Based on Nine Months’ Data Ending Mid-April, 2022/23”, Nepal Rastra Bank, May 10, 2023 https://www.nrb.org.np/contents/ uploads/2023/05/Current-Macroeconomic-andFinancial-Situation-English-Based-on-Nine-Monthsdata-of-2022.23.pdf

387. “Initial Public Offering (IPO) Approved”, SEBON.2023, June 25, 2023 https://www. sebon.gov.np/uploads/2023/06/25/ VhhDoeM70kXpdXWSBGQrahVo7NtA1yhIPHBK6AvZ. pdf

388. “PM Dahal directs to halt licensing process of new stock exchange”, myRepública (website), May 12,2023 https://myrepublica.nagariknetwork. com/news/pm-dahal-directs-to-stop-the-licensingprocess-of-the-new-stock-exchange/

389. “SEBON Boss Hamal Hands Over Broker Licenses to Eleven More Companies”, Sharesansar (website), June 8, 2023 https://www.sharesansar.com/ newsdetail/sebon-boss-hamal-hands-over-brokerlicenses-to-eleven-more-companies-2023-06-08

390. “Contention Surrounding New Taxation Provisions for FPO Premium and M&A Gains”, ShareSansar (website), May 31, 2023 https://www.sharesansar. com/newsdetail/what-is-the-contention-surroundingnew-taxation-provisions-for-fpo-premium-and-magains-2023-05-31

391. “Budget Speech 2023/24”, Ministry of Finance, July 9, 2023https://www.mof.gov.np/uploads/ document/file/1686554933_1685371031_Budget_ Sppech_2080-81_Final.pdf

392. “IMF calls for audit of Nepali banks to check quality of loans”, The Kathmandu Post (website), August 2, 2023 https://kathmandupost.com/money/2023/03/16/ imf-calls-for-audit-of-nepali-banks-to-check-qualityof-loans

393. ‘Importance of Data Management in Digital Transformation’, Box Communications, Accessed 30th July, 2023, https://blog.box.com/importance-of-datamanagement-in-digital-transformation

394. ‘Nepal’s Data Landscape’, Data for Development in Nepal, Accessed 28th July, 2023, https://www.

d4dnepal.org/wp-content/uploads/2021/03/2020. pdf

395. ‘Investing in Data to save lives and build back better,’ Statistics Division, Department of Economic and Social Affairs, United Nations, Accessed 28th July, 2023, https://unstats.un.org/sdgs/report/2021/ investing-in-data-to-save-lives-and-build-back-better/

396. ‘Nepal’s Data Landscape,’ Data for Development in Nepal, Accessed 28th July, 2023, https://devinit.org/ documents/965/Nepals_Data_Landscape.pdf

397. ‘Building Open Data Ecosystem Nepal,’ Asia Foundation, Accessed 28th July, 2023, https:// asiafoundation.org/2018/02/28/building-open-dataecosystem-nepal/

398. ‘Nepal’s Data Landscape,’ Data for Development in Nepal, Accessed 28th July, 2023, https://devinit.org/ documents/965/Nepals_Data_Landscape.pdf