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While officials at the Ministry of Finance (MoF) are busy formulating the next fiscal year federal budget, the finance minister is absent in this process. Due to the changes in the government, the post of finance minister has remained vacant for the past one month. The Finance Ministry was left without proper leadership after Bishnu Paudel resigned as finance minister on February 28. The ruling alliance is taking a long time to agree on the ministerial portfolio due to disagreements over power-sharing. Since then, Prime Minister Pushpa Kamal Dahal has been holding the Ministry of Finance. The MoF officials say they are facing difficulty in the process of budget formulation due to the absence of a finance minister. As the end of the fiscal year is approaching, the MoF has given priority to the preparation of the budget for the next fiscal year 2022/23. The constitution of Nepal requires the government to bring the budget on May 15 before the fiscal year starts on July 17. MoF has formed nine sub-committees for the formulation of necessary revenue policies that will be included in the budget. A senior official of the ministry said that the work related to the writing of the budget has intensified based on the suggestions received through the sub-committees. A sub-committee formed under the coordination of Dirgharaj Mainali, Director General of the Inland Revenue Department, is working to formulate policies on inland revenue. A sub-committee has been formed under the coordination of Chakra Bahadur Budha, Director General of the Department of Customs to formulate a policy on customs revenue. Similarly, a sub-committee formed under the coordination of Baburam Gautam, Joint Secretary of the Ministry of Industry, Commerce, and Supplies, is working for formulating revenue policy related to industry, trade, and investment. Likewise, a sub-committee under the coordination of Rajendra Poudel, Joint Secretary of the National Planning Commission (NPC), is working to formulate policies on agriculture, energy, and tourism revenue. Also, a sub-committee has been formed under the coordination of Jhak Prasad Acharya, Joint Secretary of MoF, to take suggestions from the stakeholders about the revenue policy of banks and financial institutions, insurance, cooperatives, and capital market. Meanwhile, a sub-committee formed under the coordination of Anand Kafle, Joint Secretary of MoF, is working to take suggestions on non-tax revenue policies of the government. In addition, a sub-committee has been formed under the coordination of Ishwari Prasad Aryal, Joint Secretary of MoF, for formulating policies related to intergovernmental revenue. Also, a sub-committee has been formed under the coordination of Arjun Khadka, Joint Secretary of MoF, to improve the laws related to revenue. According to the ministry officials, the revenue policy will be formulated based on the suggestions received through the sub-committees that are currently working on collecting suggestions from stakeholders. The Revenue Advisory Development Committee, which earlier used to be tasked with the formulation of revenue policies and programs, has been replaced with the Revenue Advisory Committee established under the chairmanship of the Revenue Secretary. Issuing a public notice, MoF has called for suggestions related to revenue policy to be submitted by April 3. According to the ministry sources, the budget is being prepared within the ceiling of Rs 1688 billion set by NPC for the next fiscal year. The ceiling is Rs 105.43 billion less than that of the current fiscal year. The government had earlier brought the budget of Rs 1793 billion for the current fiscal year which was trimmed by Rs 244 billion to Rs 1599 billion through the mid-term review of the budget. NPC reduced the size of the budget ceiling analyzing the contraction in government revenue, the decreasing trend of foreign grants, the possibility of pressure on loan and interest payments to international lenders due to volatility in the foreign exchange rates, and the growing burden of internal debt payments. MoF officials say that the budget for the upcoming fiscal year is being prepared considering these factors. NPC has estimated that a total of Rs 1430 billion will be collected in revenue in the next fiscal year. Similarly, the commission estimates that Rs 201 billion will be raised from foreign aid (loans and grants) and Rs 230 billion from internal loans.

The Ministry of Physical Infrastructure and Transport (MoPIT) has started the process to use the Devanagari script on the embossed number plates of vehicles. Currently, Latin script is used on embossed number plates. The Department of Transport Management (DoTM) has installed embossed number plates on around 40,000 vehicles. DoTM is also facing criticism for costly fees for the installation of embossed number plates. Given the criticism and linguistic experts questioning the use of Latin script, the ministry has now said it would make the necessary policy decision to use the Devanagari script on the embossed plates. An embossed number plate is a camera-readable plate that contains a microchip connected to the vehicle’s GPS system. This makes it efficient in terms of maintaining digital records of the vehicles, collecting revenue on time, monitoring vehicles, and controlling vehicle thefts. MoPIT Spokesperson Bhimarjun Adhikari said that a process has been initiated to keep the name of the country and province in Devanagari script on the embossed plate. He further said that the cost of installing plates will also be reduced. "We are making a policy decision to keep the name of the country and province in Devanagari script," said Adhikari. "The ministry is also in discussion with the contractor which has been given the contract of installing embossed number plates." According to Adhikari, the ministry has advanced the discussion to reduce the fee for embossed number plates. Currently, the DoTM charges two-wheelers Rs 2,500; three-wheelers (tempos) Rs 2,900; light four-wheelers including cars, jeeps, vans, and tractors Rs 3,200; and heavy vehicles Rs 3,600 for installing embossed number plates. MoPIT is also preparing to issue the driver's license within three days of the trial. At present, there are almost 800,000 people waiting for their licenses. The ministry plans to issue them a license within eight months. After that, the ministry plans to give a smart license within three days of the trial. For that, it is said that smart card printing machines will be installed in the transport management offices of all provinces. Currently, there is a daily demand for 6,000 licenses across the country, but DoTM has been printing only 4,000 licenses on a daily basis.

The price of gold has dropped by Rs 300 per tola in the domestic market on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 108, 200 per tola today. The yellow metal was traded at Rs 108, 500 per tola on Wednesday. Meanwhile, tejabi gold is being traded at Rs 107, 700 per tola. It was traded at Rs 108, 000. The price of silver, however, increased by Rs 10 on Thursday. It is being traded at Rs 1, 375.

In yet another twist in the long-delayed development of the Budhi Gandaki Hydropower Project, the government has started discussions to allow the Nepal Electricity Authority (NEA) to develop the multi-billion project. The government in the last fiscal year decided to build the reservoir project on its own and also established Budhi Gandaki Jalbidhyut Public Limited to develop the 12,00MW project. However, the company is yet to come into operation as the government has not provided the budget to get approval for commencement from the Office of the Company Registrar (OCR). The company was supposed to explore the resources after getting approval from OCR to carry on with its business. “Recently, there has been a discussion on developing the project under the leadership of NEA,” said a senior official of the Ministry of Energy, Water Resources and Irrigation (MoEWRI). “NEA has the technical expertise on developing big projects. So, we have asked NEA to take the lead role to develop this project,” the official said, adding, "For this, NEA could have a majority stake in the newly established company." An NEA official also confirmed such discussion saying that the government has said that NEA could develop the project by having a majority stake in the company. As developing storage-type projects is quite expensive compared to the run of the river-type project, a viability gap funding could be required from the government to develop this project. Budhigandaki is a ready-to-go project as its detailed project report (DPR) has already been prepared. Compensation distribution for the land acquisition and houses has also been in the final stage, according to MoEWRI officials. The project, which has been touted as important to ensuring Nepal's energy security as it is expected to help the country to be self-reliant even during the dry season, has been in limbo for a long due to uncertainty over the modality of its development. Nepal is currently importing electricity from India as domestic production has dropped sharply along with the reduction in water levels in the rivers where the hydropower projects are based. Even though the Budhigandaki Hydropower Project has been highly prioritized on paper, the company established to execute the project is yet to function seven months after its establishment. Earlier, Budhigandaki fell victim to policy inconsistency despite facing hardly any problem in land acquisition and completion of DPR. In 2017, the then government led by Pushpa Kamal Dahal awarded a contract to build the project without competitive bidding to China Gezhouba Group Corporation under the engineering, procurement, construction, and financing (EPCF) modality. The Sher Bahadur Deuba-led administration in November 2017 overturned the earlier government’s decision. A high-level team led by Swarnim Wagle, former Vice-chairperson of the National Planning Commission, was then established. The committee suggested that the project could also be developed using domestic resources. Again in September 2018, the government led by KP Sharma Oli decided in favor of the Chinese company, reversing the decision of the Deuba-led government. In April of last year, the Sher Bahadur Deuba-led government once more decided to terminate the license granted to the Chinese company since it was not making any progress on the project. Budhigandaki, which will be Nepal's largest reservoir-type project with an estimated cost of USD 2.6 billion, is situated at the boundary between the districts of Gorkha and Dhading. For the government, generating resources and closing the project's budget gap will be a difficult undertaking. The report prepared by the committee headed by Wagle in 2017 suggested that the government should develop the project on its own by providing viability gap funding, covering around one-third of the project development cost. As per its report, the government could cover the cost of land acquisition and resettlement of displaced families which could total as high as Rs 94 billion. A significant chunk of resources can be generated from government institutions. An infrastructure tax being imposed on imported fuel could be an important source of revenue that can be used to develop the project. “Based on an average increase in petroleum consumption by 10 percent a year, as much as Rs 164 billion can be collected from taxes imposed on fuel alone by the fiscal year 2026/27” reads the report submitted by the committee led by Wagle. The NEA official said that discussions are underway on how to generate resources for the project. “One option could be issuing an initial public offering for the development of the project,” said the official. According to the report, Nepal Electricity Authority, Employees Provident Fund, Nepal Telecom, Rastriya Beema Sansthan, Hydroelectric Investment and Development Company, Upper Tamakoshi Hydropower Company, Chilime Hydropower Company, Nepal Army, Nepal Police, and the General Public could be tapped for the project. The Wagle report also stated the resources could also be generated from international donor agencies or by the issuance of project-specific bonds and credits from the project’s suppliers.