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The top leaders of the ruling coalition have agreed to revise the budget for the next fiscal year 2023/24. With growing discontent within the ruling coalition over the allocation of resources in the new budget, the meeting of ruling parties on Tuesday evening took the decision. The revision of the budget, if done, even before it is endorsed by the parliament, will be the first such amendment in the country's budget history. The demand for the revision of the budget came from the coalition partner CPN (Unified Socialist). The party’s chairman Madhav Kumar Nepal has been openly asking for the budget to be revised. The FY 2023/24 federal budget presented by Finance Minister Prakash Sharan Mahat is being discussed at the parliament currently. According to Prime Minister’s Chief Political Adviser Haribol Gajurel, since the budget has not been passed by the parliament, resource allocation in some of the budget headings can be revised. The Rs 1751.31bn federal budget is currently at the receiving end from the lawmakers of both the ruling and opposition parties for the tax changes in electric vehicles, retrospective tax on mergers as well as the concentration of resource allocation of some of the ruling parties' districts. More than 50 percent of the budget for the Alternative Subsidiary Highway Development Program has been allocated to the districts of Prime Minister Pushpa Kamal Dahal, Finance Minister Mahat, Physical Infrastructure and Transport Minister Prakash Jwala, and former Prime Minister Sher Bahadur Deuba. Of the total Rs 5.17bn allocated for the program, Rs 1.1bn has been allocated for Dadheldura, the home district of former Prime Minister Deuba. Similarly, Rs 665m has been allocated to Finance Minister Mahat’s home district Nuwakot while Rs 541m to Gorkha district, from where Prime Minister Dahal was elected in the parliament. Salyan, the home district of Minister Jwala has received Rs 300m. More than 50 percent i.e. Rs 2.61bn has been allocated to the districts of the Prime Minister, Finance Minister, Physical Infrastructure Minister, and former Prime Minister while the remaining 73 districts have got a 49 percent budget. Since the budget is the prerogative of the government in a parliamentary democracy, the budget presented by the government is passed by the parliament without major changes. If the budget is not passed, the government is considered to have lost confidence. Economists express worry over the ruling parties’ decision saying that it may set a wrong precedent for the future whereby a trend could be established to amend the budget to fulfill the interests of certain parties, leaders, parliamentarians, and individuals. Economist Chandra Mani Adhikari said the decision of the ruling parties to revise the budget even before it gets parliamentary endorsement shows the weakness of the government. “This also indicates the government is not serious about the budget-making process,” he said. Economists say the resource allocation in the budget should be made based on the availability of resources, needs, and capacity while drafting the country’s main fiscal document. “These factors should be paid attention to while preparing the budget. Since there is a coalition government, it should be more serious about it,” said Adhikari. However, some economists said that the budget revision should not be taken negatively. “Budget revision in Nepal is understood as a failure of the government. It may be true to some extent. However, the budget can also be amended to balance it for the right purpose,” said economist Keshav Acharya, “However, it does not bode well if the budget is amended to serve the interests of certain groups.” The revision of the budget, according to Acharya, should be based on necessity. “The issue of unbalanced budget allocation has come into the limelight in the new budget with certain districts getting higher resource allocation,” he said. “The randomly allocated amount should be reduced and added to the districts where allocation is insufficient.”

Police have arrested a person in possession of 561. 30 grams of undeclared gold. A team deployed from the District Police Office, Makwanpur arrested Kisan Sah (22) of Birgunj Metropolitan City-16 with gold worth Rs 5.4 million. He was made public by organizing a press conference on Wednesday. Sah was nabbed with the yellow metal while checking a vehicle (Pradesh 2-03-001 Kha 0159) at the Ratmate Check Post in Hetauda Sub-Metropolitan City-15. Sah had concealed the gold inside his shoes.    

The Nepal Stock Exchange (NEPSE) gained 16.42 points to close at 2,037.06 points on Wednesday. Similarly, the sensitive index surged by 3.82 points to close at 383. 69 points. A total of 12,561,440-unit shares of 275 companies were traded for Rs 5. 01 billion. Meanwhile, Khaptad Laghubitta Bittiya Sanstha Limited was the top gainer today, with its price surging by 9. 99 percent. Similarly, Rastriya Beema Company Limited was the top loser as its price fell by 5.62 percent. At the end of the day, total market capitalization stood at Rs 2. 97 trillion.

Commercial banks have decided to keep the deposit interest rate unchanged for the month of Ashad (mid-June to mid-July). A meeting of the Nepal Bankers’ Association (NBA) on Tuesday morning decided to keep the deposit interest rate as it is for the last month of the current fiscal year. After reducing the deposit interest rate in Baisakh (mid-April to mid-May), the NBA, the association of CEOs of commercial banks, decided to keep it unchanged for the month of Jestha (mid-May to mid-June). In Baisakh, under huge pressure from the private sector, NBA lowered the deposit interest rate to 9.99 percent for individual depositors. Similarly, the interest rate for institutional deposits was lowered to 7.99 percent from nine percent. The same will continue in Asadh also. Similarly, interest rates on savings account deposits have been set at a minimum of 5.40 percent to a maximum of 7.40 percent. Likewise, the interest rate on call deposits will be 2.7 percent. The deposit interest rate had increased to 10.12 percent in June 2022. The interest rate on deposits kept on increasing until January this year. Since January, banks have been lowering deposit interest rates for each month except for March. With the liquidity situation easing in the past 5-6 months, banks are in a better position in terms of liquidity management. NBA CEO Anil Sharma said, “We have reduced the interest rate by one percent point in Baisakh. It is not good to reduce or change it frequently.” While deposit interest rates remain unchanged, the loan interest rate is expected to decrease. As the banks started reducing the interest rates on deposits, their expenses will also decrease. As a result, the base rate is also decreasing. On top of that, the basic rate has to be calculated every month. The banks are under pressure to reduce the spread rate to four percent by the end of Ashad (mid-July) which is currently 4.4 percent. The Nepal Rastra Bank has instructed the banks to lower the spread rate to 4.2 percent by the end of Chaitra (mid-April) and four percent by the end of Ashad. As a result, bankers say that the lending rate will decrease. “Due to the pressure to bring down the spread rate to four percent by the end of the fiscal year, there is pressure to reduce the loan interest rate. Therefore, there is no room to reduce the deposit interest rate,” Sharma further said.