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Banks and financial institutions have Rs 671bn in lending funds, yet loan disbursement remains stagnant, leaving Rs 400bn in excess liquidity, according to the Nepal Rastra Bank (NRB).

“The government can currently borrow from banks at an average rate slightly above four percent,” an NRB official said. “This window is temporary, so the government should consider raising internal loans to boost spending.”

The Public Debt Management Office’s 2023-24 report shows the average internal loan interest rate is 5.27 percent, recently dropping below five percent. Funds raised should prioritize development and infrastructure, the NRB official emphasized.

“The government’s spending patterns are flawed,” he added, citing the establishment of Public Service Commissions in all provinces and new Planning Commissions as unnecessary burdens.

Public debt has risen to 44.14 percent of GDP from 42.67 percent last year. As of Oct-Nov,
Rs 2.51trn in public debt comprises Rs 1.26trn in external and Rs 1.25trn in internal debt, split nearly evenly. Some loans are used to repay older debts, with the ratio expected to drop to 42 percent by the fiscal year’s end.

Economists criticize the focus on debt repayment over capital expenditures. “Public debt is high but manageable,” said Finance Ministry spokesperson Mahesh Bhattarai. “During economic stagnation and bank liquidity surplus, borrowing for development can ease bottlenecks.”

Contractors report delayed payments, with Rs 18bn owed for completed projects and over Rs 40bn in claims pending, which could invigorate the economy if settled. However, the government’s capacity to increase internal borrowing is constrained. Internal loans should remain five percent to 5.5 percent of GDP, aligning with this year’s budget target.

Nepal’s debt-to-GDP ratio has exceeded 60 percent in the past, but while rising, it remains below critical levels. Studies show high ratios slow economic activity. Nepal benefits from concessional external loans under two percent interest but risks exchange rate fluctuations, causing a Rs 59.15bn loss in 2022-23 and a Rs 4.23bn gain in 2023-24.

Internal loans, though costlier, carry no exchange rate risks and generate revenue through taxable interest. Banks, while exempt from direct taxes on treasury bills and bonds, pay 30 percent corporate tax. Current liquidity presents a fleeting opportunity for internal borrowing.

Experts advise directing such funds to impactful and feasible projects, as internal loans lack the project-specific restrictions of external borrowing.

The Nepal Stock Exchange (NEPSE) gained 45.88 points to close at 2,715.71 points on Wednesday.

Similarly, the sensitive index surged by 9.75 points to close at 464. 66 points.

A total of 11,386,854-unit shares of 308 companies were traded for Rs 5. 05 billion.

Meanwhile, Nyadi Hydropower Limited (NYADI) was the top gainer today, with its price surging by 9. 97 percent. Likewise, Khanikhola Hydropower Co. Ltd. (KKHC) was the top loser as its price fell by 9.99 percent.

At the end of the day, total market capitalization stood at Rs 4. 50 trillion.

A beautiful fountain of cascading water. Large white rocks lie scattered in the water, resembling serpents racing. Lush green forests surround the area. The ‘Naagchhaga’ waterfall enchants anyone who lays eyes on it. Located at the boundary between Ram Prasad Rai Rural Municipality-6 and 2, Bhojpur, this waterfall holds great historical and religious significance.

Situated about 12.6 km south of the district headquarters, this waterfall has immense potential for religious tourism. Every year, hundreds of religious pilgrims and domestic tourists from within and outside the district visit to enjoy the waterfall. However, due to a lack of systematic conservation, promotion, and development, the waterfall is slowly fading away.

The lack of proper infrastructure for tourists and pilgrims to eat, stay, and visit the waterfall has contributed to its lack of popularity. Local resident Uttam Rai believes that by enhancing the waterfall’s beauty and constructing proper infrastructure, thousands of tourists could be attracted. He complains that the waterfall’s reputation is being tarnished due to the government’s lack of interest in promoting and protecting the site. He adds that the waterfall’s existence is at risk because of the insufficient resources needed for its development.

A beautiful scene, resembling a serpent slithering on the rocks of the waterfall, can be seen. Local priest Jaiprasad Niraula highlights that the waterfall is not only visually captivating but also holds significant religious and historical importance. Every year, a large number of devotees gather to celebrate festivals and perform pujas, including on Nag Panchami, Maha Shivaratri, Ram Navami, and Balachartudashi. 

Ramprasad Rai Rural Municipality, along with the then District Development Committee of Bhojpur, has constructed a paved road and some physical structures to facilitate internal tourist traffic up to the waterfall. Local Mahesh Gelal believes that with proper protection and enhancement, the waterfall could become a religious pilgrimage site, attracting external tourism and contributing to the economic development of the rural municipality.

The rural municipality has expressed its readiness to prepare a development plan, including a Detailed Project Report (DPR), to enhance the waterfall. Tham Bahadur Rai, the chairperson of the rural municipality, emphasized that since the waterfall is a historical site of significance to the entire district, the rural municipality is determined to protect and promote it. He described the Naagchhaga waterfall as a jewel for all of Bhojpur, connecting religious pilgrimage, external tourism, and economic development. Rai stated, “We have started budgeting for its enhancement as part of the new plan for this financial year.”

The rural municipality has announced plans to investigate further aspects of the waterfall’s development. Birendra Rai, the Vice-cahir of the rural municipality, said that as a place of religious faith for the locals, the goal is to develop Naagchhaga into a religious tourist destination. He added that the rural municipality is working on constructing the necessary infrastructure, and development will proceed according to the DPR.

Chairperson Rai also noted that the municipality is focusing on the development of other tourist sites, including the Behereshwar Temple, Papmakham Bhanjyang, Chulachuli Cave, and others. He emphasized that the municipality is working in a planned manner to develop and expand local resources. “Naagchhaga is a gift from nature,” said Chairperson Rai. “This waterfall is the property of our village, and we are committed to its protection. It has not been adequately publicized, but we plan to highlight its significance, establish it as a religious tourism destination, and connect the rural municipality to the economic sector.”

The price of gold has increased by Rs 2, 000 per tola in the domestic market on Wednesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 154, 200 per tola today. It was traded at Rs 152, 200 per tola on Tuesday.

Similarly, the silver is being traded at Rs 1,925 per tola today.