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The Supreme Court has ordered the local governments of Kaski to remove all structures that have encroached upon the major lakes in the district. Over a dozen laws authorize local governments to protect and preserve the lakes in their respective areas. Since the construction of a check dam in Fewa Lake in 1999, various laws and policies relating to lake protection, environmental conservation, land reformation, irrigation, agriculture, biodiversity, climate change, and wetland conservation have been drafted. Additionally, all eight lakes in the Pokhara Valley have received Ramsar site status. However, encroachment around the lakes has continued unabated. Since the political change in 2006, the Supreme Court has issued over a dozen orders to the government to remove illegal structures built on lake areas. Similarly, the Constitution of Nepal, 2015 empowers local governments to preserve lakes and other natural resources in their respective areas. However, despite more than half a decade since the promulgation of the constitution, encroachments in Fewa Lake remain unabated. Disappointed by the indifference of the people’s representatives to the preservation of Fewa Lake, civil society in Pokhara has begun to join forces to voice their concerns against the encroachment of lakes in the Pokhara Valley. Recently, they have been putting pressure on the government almost daily. “We have approached the local government many times before, drawing their attention to the encroachment of lakes, but they seem unresponsive,” said Ram Bahadur Poudel, founder coordinator of Civil Society Kaski. “There are strong laws and policies to preserve the lake, but dozens of hotels and restaurants continue to spring up on the lake shores, encroaching upon the lake area.” The Pokhara Valley is home to several large and small lakes, including Khaste, Gudey, Neureni, Maidi, and Dipang, along with Fewa, Begnas, and Rupa, which are popular among visitors. Civil society and other stakeholders have launched numerous campaigns to save these lakes. They have published more than two dozen press releases, held meetings with mayors and ward chairs dozens of times, and run joint campaigns to clean up the lakes in collaboration with social organizations such as youth clubs, women’s groups, and cooperatives. “We will not give up our campaign until illegal structures built on the lake area are removed,” said Bishnu Hari Adhikari, a leader of Civil Society Kaski. Local residents say that encroachment on Fewa Lake has increased further after the metropolis introduced a new rule allowing people to use land near the lake shores for agricultural purposes. Under the guise of starting agricultural ventures, unscrupulous individuals have developed land plots on over 300 ropani of Fewa Lake’s land in just three months, according to Liladhar Poudel, chairperson of the District Coordination Committee, Kaski, and coordinator of the Fewa Watershed Area Monitoring Committee. Under mounting pressure, Pokhara Mayor Dhana Raj Acharya has stated that the metropolis will not compromise on the preservation of Fewa Lake. “We are preparing strong guidelines to prevent encroachment on the lake,” he added. However, civil society leaders say they do not believe in mere lip service. “We have been hearing commitments like this for many years. What we want now is implementation,” said Shashi Tulachan, another leader of Civil Society Kaski. Both the constitution and the Local Government Operation Act, 2018 empower local governments to make policies regarding the protection of local resources. “However, the rules under the constitution and policies have overlapped in many ways, resulting in delays in implementing strong policies,” said Kalpana Devkota, CEO of the Gandaki Province Office of Lake Conservation and Development Authority.  

Tourist arrivals hit a three-year high in 2022, with 614,148 foreign visitors coming into the country, but their spending as well as average stay in Nepal has plummeted to a three-year low. According to the ‘Nepal Tourism Statistics-2022’ published by the Ministry of Culture, Tourism, and Civil Aviation, the average stay of tourists has dropped to 13.1 days in 2022. The average length of stay in 2021 was 15.5 days, a ten-year high. With tourists shortening their stay in Nepal, their spending too declined in 2022. The average daily spending of tourists declined to $40 per day, down from $48 per day in 2021. The Tourism Ministry’s data shows that tourist arrivals and tourism earnings both surged significantly in 2022. Nepal welcomed over 600,000 tourists last year while tourism income rose to a three-year high of $326.28m. The surge in the number of tourists has not resulted in a significant increment in their spending during their stay in Nepal. With mainly budget travelers coming to Nepal, tourism entrepreneurs say the decline in the length of stay, and their average daily spending is natural. “A large number of tourists visiting Nepal are average spenders. We do not get affluent tourists who could spend handsomely during their stay in Nepal,” said Vinayak Shah, president of the Hotel Association of Nepal. According to travel trade entrepreneurs, the fear of the Covid-19 pandemic was still there in 2022, forcing travelers not to stay for a long time. “As international travel was opened across the globe fully in 2022, it takes some time to return to normalcy,” said Shah. Hoteliers and tour operators said tourists from European countries spend more than other countries. “But tourist arrivals from European countries in 2022 surged compared to 2021, but have not reached the level of 2019,” said Bishwesh Shrestha, owner of C&K Travels. Tourism entrepreneurs emphasized the need to create an environment to lengthen the stay of foreign visitors. According to them, there is a dire need to upgrade the tourism infrastructures. While the country has seen more five-star, four-star hotels, there are still issues related to product and service diversification. “There is a bottleneck in tourism infrastructures. The Tribhuvan International Airport cannot cater to more tourist flow than what it is catering now,” said Shah, “While the two international airports are yet to be operated fully.” The number of foreign visitors entering Nepal grew by 306.82 percent in 2022, putting an end to a two-year downward spiral that started in early 2020 when the coronavirus outbreak wreaked havoc across the world. While the number of foreign visitors entering Nepal grew significantly, it is still 48.70 percent lower than in 2019 when 1.19m arrivals were recorded. In the first half of 2023, the tourist arrivals surged by 97.79 percent to reach 476,507. With healthy growth in tourist arrivals from the start of this year, tourism entrepreneurs are expecting 1m international visitors in the country by the end of 2023. While tourist arrivals have improved significantly compared to the last three years, the number is yet to touch the pre-Covid level. Nepal had received 573,658 tourists in the first six months of 2019. The arrival of foreigners in the first six months of 2023 is 83.06  percent compared to the same period in 2019. With the easing of travel restrictions and China reponing outbound travel for its citizens, Nepali tourism entrepreneurs are pinning high hopes for 2023. In 2022, tourist arrivals reached over 600,000 without any significant contribution from China. Only 9,595 Chinese tourists visited Nepal in 2022. Tourists’ length of stay Year Days 2022 13.1 2021 15.5 2020 15.1 Average expense per visitor Year Expense 2022 $40.5 2021 $48 2020 $65 Tourism earnings Year Expense 2022 $326.28m 2021 $112.50m 2020 $217m

With only one week left to end the current fiscal year, there has been a dramatic surge in government budget spending. The government’s average daily spending has reached Rs 11.5bn in the last nine days, which during normal days, used to stand at Rs 5-6bn per day. The data of the Financial Comptroller General Office which keeps track of the government’s income and expenditure, shows both recurrent and capital expenditure has surged in recent weeks. On Saturday (July 8), despite being the weekend, the government paid out Rs 16.23bn. As the new fiscal year starts on July 16 (Shrawan 1), the annual budget of the government should be spent by mid-July (Ashad-end). However, the budget implementation and payment remain slow in the initial months, only to pick up in the last quarter. As expected, there has been an improvement in capital spending in Ashad. In the first 23 days of Ashad, the capital expenditure has increased by Rs 36.96bn. The government’s average daily spending has reached Rs 2.74bn in the last nine days. The government’s capital expenditure as of July 8 reached Rs 190.04bn, which is 60.55 percent of the revised capital budget for the current fiscal year 2022/23. The government had initially set a capital expenditure target of Rs 380.38 billion which was slashed to Rs 313.85 percent in the half-yearly review of the federal budget. The last-minute increment in fund utilization has raised the question of the quality of capital spending in the country. The majority of capital spending takes place in the last month of the fiscal year i.e., Asar (mid-June to mid-July). The report of the Office of the Auditor General (OAG) also shows that 40 percent of the total capital expenditure takes place in Asar. In Nepal, government spending is carried out under three headings—recurrent expenditure, capital expenditure, and expense on financial management. Recurrent expenditure is mainly associated with administrative costs, including operation grants, capital grants, and costs for ongoing projects. Capital expenditure involves expenses made in infrastructure development, construction, and other sectors that help generate real capital in the country. According to government officials, it is natural to see a surge in government payments due to the obligation to spend the current year’s budget within the fiscal year (mid-July). But economists say that the trend of expediting spending only in the last month of the fiscal year shows the government’s fiscal indiscipline. This pattern of spending increases the possibility of sub-standard quality of capital projects and an increase in recurrent spending, in operations and maintenance costs, for the coming years, they said.  “This also shows that the government is not adhering to fiscal discipline,” said economist Chandra Mani Adhikari. In order to resolve this perennial problem, Adhikari suggested that the budget spending system should be made scientific.

While the government is struggling with revenue collection, it is also not able to get foreign assistance as expected. The commitments of foreign loans and grants to the government have declined by 24.09 percent in the first 11 months of the current fiscal year. With only two weeks left to end the fiscal year, the government has been able to receive foreign assistance commitments of Rs 170.51bn in this fiscal year. Bilateral and multilateral donors had given aid commitments of Rs 224.64bn during the first 11 months of the last fiscal year. The government in the current fiscal year budget has initially targeted to receive Rs 297.71bn in foreign grants and loans for this fiscal. However, it reduced the target to Rs 209bn during the mid-term review of the budget. According to the Finance Ministry, it has entered into an agreement with foreign donor agencies to take loans and grants for different 22 projects and programs till mid-June. Of the total assistance, Rs 129.84bn is the loan while Rs 40.67bn is grant. The statistics of the Finance Ministry show commitment to both loans and grants has declined in this fiscal. However, grant commitments have declined by 55 percent in this fiscal compared to the last fiscal. Of the total aid commitment received in this fiscal, the largest commitment is from the World Bank (43 percent), followed by ADB (25.3 percent, the United Kingdom (13 percent), and Japan (10 percent). The government has prioritized receiving foreign aid in the form of budget support which Nepal can utilize in its priority areas. The government’s International Development Cooperation Policy (DPC)-2019 has highlighted that budget support is the country’s most preferred official development assistance modality. According to the ministry, development policy credit (DPC) worth Rs 12bn has been received from the World Bank for Green, Resilient, and Inclusive Development (GRID). In August last year, the two sides signed a  concessional financing agreement of $100m (equivalent to Rs. 12.7bn) for the GRID. The proposed budgetary support aims to support improvements in the enabling environment in Nepal toward green, climate-resilient, and inclusive development. This is the first in a programmatic series of three concessional loans on GRID, according to the World Bank. Likewise, the ministry said that the government also received Rs 3bn from the Asian Development Bank under its policy-based lending heading which is also budgetary support. The government and the World Bank in the last week of May signed a financing agreement for a $120m concessional loan from the International Development Association and a grant agreement for $19.7m from the Global Partnership for Education for the School Sector Transformation Program (SSTP) Operation, which support the implementation of the government's flagship School Education Sector Plan. The government also signed a $140m agreement with the World Bank for the Digital Nepal Acceleration (DNA) Project. The other multilateral lender, Asian Development Bank (ADB) in the last week of June approved a $50m loan to support the implementation of policy reforms by the government of Nepal to help improve its domestic and international trade. The ADB on May 17 approved a $300m loan to improve transport connectivity of the Kakarbhitta–Laukahi road in Nepal to international trade routes, particularly to India and Bangladesh. Amid declining revenue collection, the government has sought $200m from the Asian Development Bank in budgetary support to finance the resource gap. With the government struggling to maintain a balance on fiscal management, Finance Minister Prakash Saran Mahat on May 11 requested development partners for loans and substantial grants to Nepal. Mahat had made such a request during a discussion with the international development partners, saying that as Nepal has been affected by global climate change despite the country's negligible carbon emission, the aid should also be mobilized in the form of grants.