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The price of gold has dropped by Rs 300 per tola in the domestic market on Sunday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 112, 200 per tola today. It was traded at Rs 112, 500 per tola on Friday.

Meanwhile, tejabi gold is being traded at Rs 111, 650 per tola. It was traded at Rs 111, 950 per tola.

Similarly, the silver is being traded at Rs 1,480 per tola today.

The price of gold has increased by Rs 100 per tola in the domestic market on Friday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 112, 500 per tola today. It was traded at Rs 112, 400 per tola on Thursday.

Meanwhile, tejabi gold is being traded at Rs 111, 950 per tola. It was traded at Rs 111, 850 per tola.

Similarly, the price of silver has increased by Rs 40 and is being traded at Rs 1,480 per tola today.

The Cooperative Sector Reform Suggestion Task Force has recommended that the registration of savings and credit cooperatives be suspended for a one-year period in metropolitan cities, sub-metropolitan cities, and municipalities.

While there are more than 31,000 cooperatives in the country, the majority of those who’ve turned problematic are savings and credit cooperatives.  Hence, the task force suggested the suspension of registration and extension of their work area.

“Through the amendment of some Nepal Acts, by amending the Cooperative Law, the registration of savings and credit cooperatives in metropolitan cities, sub-metropolitan cities, and municipalities, and permission to expand their scope of work should be stopped for one year,” reads the recommendation of the task force. The task force submitted the report to Prime Minister Pushpa Kamal Dahal on Monday.

Amid rising incidents of cooperatives turning problematic and misusing the depositors’ money, the government in the second week of May formed the task force headed by National Planning Commission member Jayakant Raut.

According to Raut, the task force has suggested freezing the bank accounts, immovable property, and passports of the directors of cooperatives that have turned problematic.

The task force has also suggested fixing the loan limit to be given to directors of cooperatives as well as members of the audit committee. It has also recommended that directors who've taken loans from their organizations should pay such loans within six months. 

Depositors have lost billions of rupees due to the lack of effective regulation of savings and credit cooperatives by the government. In the absence of effective regulation, deposits worth billions of rupees are at risk as several cooperative operators indulged in reckless investments. 

According to the Department of Cooperatives, problems have been observed in about 100 cooperatives. Although the department does not have a definite data, billions of rupees of depositors have sunk in those cooperatives.

Depositors have not got back Rs 14bn from Shiva Shikhar Multi-purpose Cooperative. Kedar Nath Sharma, the former president of the cooperative has been recently arrested by the police from India. 

Similarly, Dev Kumar, director of Image Savings and Credit Cooperative, is absconding after defrauding depositors’ money worth Rs 2.5bn.

According to government data, there are 30,879 cooperative institutions across the country. These cooperatives’ total share capital is  Rs 94bn while their savings stand at Rs 477bn. Their loan disbursement is estimated at Rs 426bn.

With the government struggling to strike a balance between income and expenditure, the budget has widened further. The statistics of the Financial Comptroller General Office (FCGO) show the government’s federal budget is in deficit by Rs 422bn. 

The budget deficit has increased as revenue could not be collected as targeted while liabilities increased in areas of salary, pension, social security allowances, and domestic & external debts among others. 

According to the latest statistics of the Financial Comptroller General Office (FCGO), the government’s expenditure reached Rs 1383.55bn by July 11 while the income totaled Rs 960.83bn.

The government has been able to meet only 64.5 percent of the revenue target with only four days left to end the current fiscal year while the total expenditure has reached 77.13 percent of the annual target. 

According to Finance Ministry officials, the budget deficit may exceed Rs 5bn by the end of the fiscal year, and there is a possibility that the government treasury account will be negative by Rs 1.5bn. The government’s treasury account has already become negative by nearly Rs 1bn. According to Nepal Rastra Bank, the government's treasury account has become negative by Rs 98.85bn. 

Since the beginning of Ashad, the last month of the fiscal year, the government has stopped all large payments including Rs 80bn meant for public works. 

Such is the state that the government has used the resources allocated for capital expenditure to pay the interest on the loans. Rs 36bn was earmarked for development projects such as Budhigandaki Hydropower Project, Nijgadh International Airport, and Kathmandu-Tarai Expressway.

After the money collected from its revenue collection was not enough to pay for the salaries of the government employees and to cover the administrative expenses, the government has for the first time taken the money from the development budget and spent it to pay the interest on the loan. Rs 36bn earmarked for development projects including Budhigandaki, Nijgadh Airport, and Kathmandu-Nijgadh Fast has been transferred to pay the principal and interest of the loans.

Finance Ministry officials admitted that the amount was transferred from other titles to pay the principal and interest of the internal loans since the amount allocated for paying loans remained insufficient due to the surge in the interest rates this year. 

The dramatic decline in revenue forced the government to trim the federal budget of Rs 1.793trn by 14 percent to Rs 1.549trn through the mid-term review of the budget. 

The non-improvement in revenue collection has been a worrying factor for the government which is struggling to meet the expenses. As of July 11, revenue collection totaled Rs 940.90bn, of which Rs 818.52bn is tax revenue and Rs 86.46 is non-tax revenue.

The decline in imports has hit the revenue collection hard. According to the Department of Customs (DoC), revenue from imports has declined by 23 percent in the first 11 months of the current fiscal year compared to the same period of the last fiscal year. DoC collected revenue worth Rs 344.03bn till mid-June, which was Rs 446.79bn a year ago. 

The country’s total imports have declined by 16 percent in the review period. Nepal has imported goods worth Rs 1,480.98bn in the first 11 months of FY 2022/23 compared to Rs 1,763.22bn during the same period of FY 2021/22. 

Dhaniram Sharma, spokesperson of the Finance Ministry accepted that the budget deficit in this fiscal will be a bit bigger than in earlier years. It is seen that there will be a budget deficit this year.