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President-elect Ram Chandra Paudel will take the oath of office and secrecy on Monday as the third president of republic Nepal. Like his predecessors—Ram Baran Yadav and Bidya Devi Bhandari—Paudel too comes from a political background. The President is regarded as a constitutional head of the state with limited powers defined by the constitution and federal law. But the executive powers are vested in the council of ministers. Still, electing a politician with executive ambitions could raise the risk Sheetal Niwas emerging as a parallel power center. It was evident in the case of two past presidents that instead of keeping the Office of the President free from politics and controversy, parties view this institution as a tool to advance their political interests. This has eroded the credibility of the president’s office and often become a subject of public criticism. The tussle between the president and the prime minister erupted right from the time Nepal became a republic by electing a political leader to the post. Ram Baran Yadav, the first president, was a senior Nepali Congress politician loyal to the NC leaders, Girija Prasad Koirala and Sushil Koirala. Similarly, outgoing president Bidya Devi Bhandari came from the CPN-UML. She served two terms in Sheetal Niwas. Both Yadav and Bhandari were always grateful and loyal to their political patrons, and they showed this gratitude by siding with their parties on more than one occasion. The two former presidents faced charges of breaching the constitution by interfering in the executive’s jurisdiction and conversely engaging in party politics. Yadav courted several controversies and faced the charges of acting as a parallel power center. The tussle between the Office of the President and the Office of the Prime Minister over the government’s decision to sack the then Chief of Army Staff Rookmangud Katawal culminated into the resignation of Prime Minister Pushpa Kamal Dahal. Yadav took the decision to refuse the government’s move following the whispers of his party. The Maoist party launched a street movement against the president, and the new republic was to get cougars in a power tussle between the president and prime minister from 2011 to 2015. It was expected that the parties would learn lessons from the first presidency and elect a non-partisan figure as the second head of the state. But the second president, Bhandari, was even more controversial. During her eight-year tenure, Bhandari faced charges of favoring her party, UML. She was heavily criticized for endorsing the decisions of the KP Oli government to dissolve the democratically elected parliament twice. Once again, Nepal has got an active politician as its president. Moreover, the president-elect is someone who had made several unsuccessful bids to premiership as a NC leader. And unlike Yadav and Bhandari, Paudel is a dominant force in his party. This begs the question: can Paudel maintain the dignity of his office? There are fears that there could be more confrontation between the president and the prime minister, as a senior leader of a political party has reached Sheetal Niwas. Paudel has previously held the post of House speaker and several ministerial positions. Though he has achieved the highest position in the country, he still regrets not becoming the prime minister. Even after being elected the president, Paudel said that his preference was to become the executive head rather than the constitutional president. This statement betrays his hunger to wield executive power. It also suggests that Paudel could be a more controversial president than his two predecessors. Political analysts predict that his dominant personality may put him on a collision course with the government. One NC leader reckons Paudel will start asserting his power after some months into the office, dictating the works of the prime minister. Even the party leader, Sher Bahadur Deuba, cannot control him, adds the leader. The past presidents have often come to clash with the prime minister on the issue of authenticating bills and ordinances. As per constitution, the president should endorse the ordinances forwarded by the government. But, the problem with the ordinance is that they are designed to serve the petty party and personal interests of the prime minister and his party. The president often faces the pressures to authenticate the decisions of the executive but at the same time, there is a pressure from the public to reject the decisions, particularly if they contain objectionable provisions. Regarding the bill endorsed by Parliament, the constitution has given certain rights to the president. Article 113 of the constitution says: In case the President is of the opinion that any bill, except a Money Bill, presented for authentication needs reconsideration, he or she may, within 50 days from the date of submission, send back the bill along with his or her message to the House in which the bill originated. However, if parliament sends the bill to the Office of the President—with or without consideration of the president’s queries—for the second time, it has to be authenticated. Both Bhandari and Yadav were dragged into controversy due to ordinances. On those issues, the Prime Minister’s Office was equally responsible for bypassing the parliament and trying to steamroll controversial bills or laws through an ordinance. This culture often puts the president at the center of political controversy. A lack of communication between the president and prime minister in the past has also created misunderstandings between the two institutions.  Though Article 81 of the constitution makes it mandatory for the prime minister to inform the president about the bills that are to be introduced in the federal parliament, necessary information, current state of affairs, and matters relating to foreign affairs, the Prime Minister’s Office has consistently failed to do so. So it is important that both the prime minister and the president’s offices learn lessons from the past and keep their line of communication open at all times. That is how the notion of checks and balances is fostered between the two institutions. As a senior political leader, the onus lies on Paudel to take measures to develop the institution in line with the constitutional provisions. He should clean the legacy left behind by his predecessors and lead the Office of the President by example—free from controversy and always within the constitutional limits.

The first seven months of the current fiscal year have been noteworthy for the  Nepali insurance sector. While the drive for the merger in the banking sector seems to be gradually settling down with the conclusion of some big mergers and acquisitions (M&As), the consolidation in the insurance sector is in full swing. Life insurance companies recorded significant growth in their profits in the first half of the current fiscal year. The unaudited financial reports of the life insurance companies for the second quarter of the current fiscal year, the profits of the insurers increased by 72.51 percent in the first six months of FY 2022/23. The 18 life insurance companies posted profits totaling Rs3.37bn during the review period, an increase of Rs1.41bn from the same period of the last fiscal year. The companies earned a net profit of Rs 1.95bn in the first half of FY 2021/22. Nepal Life Insurance Company has topped the chart in terms of net profit earnings. The company posted a net profit of Rs440m in the first half of the current fiscal. Sun Nepal Life Insurance came second with a net profit of Rs353m followed by Surya Jyoti Life Insurance with Rs284.1bn. According to insurers, high deposit interest rates of banks and financial institutions have driven their profits as insurance companies keep most of their investable capital in fixed deposits of commercial banks. The fixed deposit interest rate for institutional investors climbed as high as 12 percent when the financial system was hit by a severe shortage of investible funds. Compared to life insurance companies, the profit of non-life insurance companies grew by 20 percent in the first half of the current fiscal. Marginal growth in premium collection While the profits have grown, the overall business of life insurance companies grew marginally in the first seven months of this fiscal year. According to Nepal Insurance Authority (NIA), life insurance companies collected premiums amounting to Rs83.32bn in the first seven months of the current fiscal year. The premium collection of life insurance companies during the same period of the last fiscal stood at Rs81.30bn. The business of non-life insurance companies grew by almost six percent in the first seven months of the current fiscal year. The 18 non-life insurance companies that are in operation in Nepal, have collected Rs23.06bn as insurance premiums till mid-February, 2023. Non-life insurance companies' insurance premium has increased by Rs1.25bn in the first seven months of FY 2022/23. Such insurance premium stood at Rs21.81bn during the same period of the last fiscal year. Insurance sector experts have termed the growth rate of the non-life insurance business as not encouraging. The growth rate of the non-life insurance business was high in the last few years. "The non-life insurance business has been affected this year due to the economic downturn and high inflation rate,"  said Raju Raman Paudel, Executive Director of NIA. Merger drive In the last one year, a series of merger agreements have been signed among both, life insurance and non-life insurance companies. The merger momentum in the Nepali insurance sector intensified after NIA increased the minimum paid-up capital requirements for insurers of both categories. The authority has increased the paid-up capital of non-life insurance companies to Rs2bn while it is Rs5bn for life insurance companies. The authority has been pushing for consolidation in the Nepali insurance sector since the new Chairman Surya Silwal took charge of NIA. Of the 19 insurance companies involved in the merger process, six companies have merged to become three and have started their integrated business while 13 others are still in the process of completing their merger process. According to NIA, 10 non-life insurance companies have signed merger MoUs to become five, while nine life insurance companies have also signed merger deals to become four entities. So far, two life insurance companies and six non-life insurance companies have completed the merger process and have started integrated business. Life Insurance Companies’ Profit (First Six Months)

With the Nepali rupee continuous weakening against the US dollar, Nepal’s debt liability to external creditors has increased substantially in domestic currency terms. The fluctuation in the foreign exchange rate has resulted in an exchange loss of Rs 43.72 billion during the second quarter of the current fiscal year, according to the Public Debt Management Office (PDMO). This calculation is based on the exchange rate difference at the beginning of the second quarter on October 17 and the end of the quarter on January 14. PDMO data shows that during the review period, the domestic currency plunged by Rs 1.64 per US dollar. By the end of the second quarter of the current fiscal year, Nepal’s total external debt reached an equivalent of Rs 1.1 trillion. ‘The exchange losses of nearly Rs 44 billion does not mean that Nepal is losing an equivalent amount this fiscal year,” said a senior PDMO official. “We are not paying the entire debt in a year but we had to pay more  for the debt repaid during the second quarter in proportion to the weakening of the exchange rate during the quarter.” During the second quarter, the government spent Rs 10.36 billion in repaying external debt including both principal and interest.   The country will have to spend more to cover the exchange rate losses in the domestic currency provided that the exchange rate of the domestic currency remains weak. During the first quarter of the current fiscal year, fluctuations in the rate of exchange resulted in an exchange loss of Rs 5.52 billion, according to PDMO. At the beginning of the fiscal year on July 16, 2022, the exchange rate was Rs 128.11 to the dollar. By October 17, 2022 (the end of the first quarter), the greenback had risen to Rs 132.07. As the country’s debt size is on the rise, the weakening of the domestic currency contributes to increasing the liability of the country further. Nepal’s total debt hit the Rs 2 trillion rupee mark for the first time last fiscal year, 2021/22. According to PDMO,  Nepal’s total debt had reached Rs 2.01 trillion, which is equivalent to 41.47 percent of Nepal’s gross domestic product (GDP). Though Nepal’s current debt level is not alarming, the country’s total debt doubled to Rs 2 trillion from just Rs 1 trillion in FY 2018/19, suggesting a staggering rise in a short period of time. The country’s total debt reached as high as Rs 2.07 trillion at the end of the second quarter of the current fiscal year. Of the total debt by the end of the second quarter of this fiscal, the share of the external debt stands at 53.24 percent of total debt. The government’s debt liability has increased at a time when the government has been struggling to collect enough revenue. The government collected revenue amounting to Rs 567.60 billion as of March 11  of the current fiscal which is not enough even to fund the recurrent expenditure of the government. The government’s recurrent expenditure during the same period stood at 598 billion, according to the Financial Comptroller General Office. In fact, the total revenue collection is negative with the government failing to collect revenue equivalent to the amount it collected last fiscal year. During the same period in the last fiscal year, the government had collected Rs 677 billion in revenue. As debt falls under the category of compulsory liability, the government must pay the liability of loans even by slashing the budget allocated elsewhere. Through the mid-term review of the budget, the government slashed the budget size by 13.59 percent. But the debt liability like the liability for salary and pension is not part of budget cuts. “Though the budget allocated for paying internal debt is not enough, the allocated budget for paying external debt is likely to be enough,” the PDMO official said.

Nepal defeated the United Arab Emirates (UAE) by 177 runs in the second match of the final tri-series of the ICC Men’s Cricket World Cup League 2 held at TU Cricket Ground in Kirtipur on Sunday. With the win, Nepal have retained their one-day international status (ODI) status. Nepal, who chose to bat first after winning the toss, scored 248 runs in 49.2 overs by losing all the wickets. Chasing the target of 249 runs in the second innings, the UAE managed to score only 71 runs in 22.5 overs. Lalit Rajbansi took five wickets for Nepal. Likewise, Sandeep Lamichhane claimed two wickets. Similarly, Dipendra Singh Airee, Sompal Kami and Gulsan Jha took one wicket each. Captain Rohit Paudel and Bhim Sarki played an important 54-run partnership. Sarki scored 29 off 37 balls hitting four boundaries. Arif Sheikh, who came to the crease at number 5, and skipper Paudel shared an 86- run partnership. Paudel returned to pavilion scoring 77 runs off 112 balls hitting nine boundaries. Sheikh made 43 runs off 52 balls and Gulsan Jha scored 37 runs off 32 balls. Similarly, Dipendra Singh Airee returned to the pavilion adding 34 runs off 19 balls in the scoreboard.