There has been a sharp decline in foreign direct investment (FDI) inflow in Nepal in the current fiscal year. The net FDI inflow to the country has plunged by 93.4 percent in the first half of FY 2022/23. Nepal saw a net FDI inflow of Rs 749.4 million in the first half of this fiscal compared to Rs 11.34 billion during the corresponding period of the last fiscal. Nepal is one of the countries that receive the lowest FDI in the world. Despite many talks on attracting FDI in the country, the country has failed to attract foreign investors as expected. While net FDI is on the decline, repatriation is on the rise, as per NRB statistics. Foreign investors have repatriated Rs 1.80 billion in the first half of this fiscal. Such repatriation during the first half of the last fiscal stood at Rs 268 million. Not only net FDI, but FDI pledges in the country also dropped significantly during the first half of the current fiscal year. As per the latest statistics of the Department of Industry (DoI), FDI commitments dropped by 43.27 percent in the first six months of FY 2022/23. FDI commitments totaled Rs 17.30 billion in the review period compared to Rs 30.50 billion in the corresponding period of FY 2021/22. Economists attribute the decline in net FDI inflow to global economic recession.  According to them, the global economy that was coming out from the impact of the Covid-19 pandemic has been hit hard by the Russia-Ukraine conflict and the rise in prices of commodities. Economist Chandra Mani Adhikari said that foreign investment in Nepal has decreased due to the global economic recession. "The world economy has been impacted by the Russia-Ukraine conflict as it pushed the prices of commodities, especially oil, coal, and gas, and disrupted the supply chain," said Adhikari. Economists say it is necessary to improve the existing policy and structural system to bring more foreign investment into Nepal. According to them, while the immediate reason for the decline in FDI might be the global recession, there are structural and procedural obstacles in Nepal that discourage investors. The private sector says there is no coordination on policy and institutional matters regarding foreign investment. There is a trend of announcing various facilities to attract investors but not implementing them, they said. Despite introducing a one-door system in the Investment Board Nepal and Industry Department, FDI has not come in as expected. Of late, the government has eased procedures related to FDI. In November last year, it lowered the minimum threshold for FDI to Rs 20 million from Rs 50 million to attract even small foreign investors in the country. “The threshold was reduced as per suggestions from stakeholders,” said Tiwari. “The decision is expected to encourage FDI in the information and communication sector, which does not need big investments in physical infrastructure.” And, in January this year, Nepal Rastra Bank allowed a company with foreign investment operating in Nepal to borrow up to 100 percent of the paid-up capital from its parent company. Earlier, it was restricted to 60 percent of the paid-up capital. Such companies can also pay an interest rate as high as a one-year benchmark interest rate plus 3.5 percent per annum, up from a one-year benchmark interest rate plus a three percent additional rate per annum earlier. The NRB has also allowed foreign investors to record their FDI details at the central bank by mid-January 2024. Likewise, companies bringing foreign loans can also record such borrowings by mid-January 2024. Nepal’s Foreign Investment and Technology Transfer Act has permitted bringing both FDI and foreign loans. Net FDI in Nepal (First six months)

FY                                       Net FDI                 2022/23                            Rs 749.4 million 2021/22                            Rs 11.34 billion 2020/21                            Rs 7.65 billion

The adoption of digital payment systems by consumers and businesses has gained fast momentum over the last three years. As the start of the Covid-19 pandemic in early 2020 forced people to stay inside their homes for months, digital transactions took a giant leap. Backed by the increasing use of smartphones and other computing devices, consumers were fast to adopt digital modes of payments and online shopping to buy daily essential items. Primarily, the retail payment systems in Nepal consist of cheque-clearing, electronic fund transfer, card payment systems, QR code-based payment, e-money, and remittances. Digital payment instruments like mobile banking, cards, QR code, connectIPS, e-wallets, internet banking, POS machines, etc. have been extensively used owing to the fear of transmission of coronavirus from physical modes of payments such as cash and cheques. The usage of digital transactions also increased with licensed institutions working to modernize existing instruments and innovate new payment tools. The faster adoption of new payment systems has further acclimatized users to digital banking rather than branch-based banking. While payments through electronic modes have also taken a beating in this fiscal year due to a sharp slowdown in economic activities, there is no doubt digital payment will be the increasingly preferred mode of payment in the coming days. Although the momentum in digital payments took pace in early 2016 and gained prominence in 2020, the foundational arrangements for modernizing the payment systems started in 2014. The National Payment Systems Development Strategy (NPSDS), 2014 was formulated to further develop the payment system. A recent report by Nepal Rastra Bank (NRB) titled 'Payment Systems Oversight Report' shows there has been growth in the number of Payment Service Providers (PSPs), PSPs Agent, Wallet Users, connectIPS Users, and Interbank Payment System Members in the last three years. "There has been a rapid increase in the user base of e-wallets and connectIPS post-pandemic," states the report. According to NRB, the number of wallet users increased from 6.27 million in mid-August 2020 to 13.68 million in mid-July 2022. Similarly, the number of connectIPS users increased from 162,117 in mid-August 2020 to 896,341 in mid-July 2022. The number of Interbank Payment System members has also increased to 111 members. Post-pandemic, digital instruments like connectIPS, e-wallets, mobile banking, internet banking, QR code, and cards have widely been used as customers can use these instruments in self-service mode. Similarly, e-commerce and POS transactions have also gained prominence after the beginning of the pandemic. According to the report, the number and value of connectIPS transactions have grown by 109.3 percent and 127.1 percent respectively from FY 2020/21 to FY 2021/22. Similarly, QR code-based payment is the most widely used digital payment instrument in the country. The number and value of QR-based payments have surged by 382.8 percent and 366 percent respectively from FY 2020/21 to FY 2021/22. The retail payment systems in Nepal are mainly operated by Nepal Clearing House Limited (NCHL), which provides image-based cheque-clearing solutions and electronic fund transfer facilities to customers. Similarly, FonePay Payment Services Ltd. provides the platform for QR payments and mobile banking services to BFIs. Other major operators in the card payment landscape are SmartChoice Technologies (SCT) and Nepal Electronic Payment Systems (NEPS) Ltd. Internationally recognized institutions like Visa Worldwide, Union Pay International Company, and MasterCard Asia/Pacific are also operating as PSOs in Nepal. The central bank has distributed licenses to 37 institutions to operate as PSPs and PSOs. Of them, 27 are PSPs and 10 are PSOs. RTGS transactions value up by 105%  The Real Time Gross Settlement (RTGS) system has processed large value payments with 40.6 percent and 105 percent growth in the number and value of transactions respectively in 2021/22 compared with FY 2020/21. The central bank has been operating the Real Time Gross Settlement (RTGS) system for large value and critical payments since September 12, 2019. The RTGS is an electronic fund transfer system in which the transfer of funds between one bank/financial institution to another takes place in 'real time' and on a 'gross' (transaction by transaction) basis, without bundling or netting debit and credit transactions of a participant. The RTGS system has replaced the manual process to clear large value and critical payments in NRB’s General Ledger System with an automated and real-time payment process. ECC transaction value surged by 8.9% The number and value of Electronic Cheque Clearing (ECC) transactions have grown by 13.2 percent and 8.9 percent respectively in 2021/22 compared with FY 2020/21. Electronic Cheque Clearing (ECC) system allows the BFIs to accept and present interbank cheques for clearing and settlement. NCHL has been operating the ECC system, which offers high-value, express, and regular cheque-clearing options to customers. BFIs use the ECC portal to scan the cheques and present them for clearing and settlement. Use of cards for e-commerce declining While the usage of Point of Sale (POS) is increasing, a decline in e-commerce or online payments using cards has been seen. The number and value of online payments using cards have reduced by 39.1 percent and 46.8 percent in 2021/22 as compared with FY 2020/21. With many customers opting for cash-on-delivery options for e-commerce payments, there may have been a decline in e-commerce transactions through cards. Further, online sites have integrated wallets and instant payment systems for online payment, providing cardless digital payment options to customers. "A detailed study is required to identify the reason behind the decline in e-commerce transactions through cards," reads the report. NRB increases paid-up capital of PSPs and PSOs NRB has increased the paid-up capital of entities involved in the digital payment business. Issuing a new licensing policy in January, the central bank has increased the paid-up capital for payment service providers (PSPs) and payment system operators (PSOs). As per the new arrangement, the paid-up capital of PSPs operating devices other than payment cards has been fixed at Rs 50 million. The paid-up capital of PSPs operating payment cards and other devices has been fixed at Rs 250 million. Similarly, the paid-up capital of PSOs has been fixed at Rs 400 million, while PSOs handling payment transactions outside Nepal through payment instruments issued in the country have to raise their paid-up capital to Rs 800 million. NRB has set a deadline of 2028 for the existing PSPs and PSOs to meet the new paid-up capital requirement. The companies that have already obtained licenses from the central bank, have to maintain the paid-up capital as prescribed by the NRB by mid-July 2028," states the policy. Access on Payment Systems

Particulars	Mid-August, 2020	Mid-July, 2021	Mid-July, 2022
PSPs Agent	5,139	9,279	12,685
Wallet Users	6,274,129	8,885,914	13,675,993
connectIPS Users	162,117	534,615	896,341
Electronic Cheque Clearing Members	65	60	59
Interbank Payment System Members	85	103	111

Cards  

	Debit Card		Credit Card		Prepaid Card
	Number (in ‘000)	Growth (%)	Number (in ‘000)	Growth (%)	Number (in ‘000)	Growth (%)
Mid-July, 2018	5,544		105		97
Mid-July, 2019	6,709	21.0	123	17.1	67	-30.9
Mid-July, 2020	7,329	9.2	160	30.1	64	-4.5
Mid-July, 2021	8,840	20.6	192	20.0	68*	6.3
Mid-July, 2022	10,856	22.8	239	24.5	109*	60.3

  RTGS  transactions value up by 105 percent

Currency	2020/21		2021/22
	No. of Transaction	Amount (in million)	No. of Transaction	Amount (in million)
NPR	5,22,174	2,04,45,704.04	733,795	4,15,61,970.8
USD	10,364	688.04	14,774	828.12
EUR	702	161.09	1,098	222.83
GBP	426	3.23	582	4.96
JPY	175	1,891.12	348	75,633.62

Economic slowdown puts a brake on the speed of electronic transactions  With the sharp slowdown in economic activities, payments through electronic modes have also taken a beating in this fiscal year. The overall digital payments in the first six months of the current fiscal year declined by 0.54 percent. NRB data shows digital payments worth Rs 27010.414 billion took place in the first half of FY 2022/23 compared to Rs 27157.714 billion during the same period of FY 2021/22. There was a gradual decline in electronic payment transactions till the fifth month of the current fiscal. However, it improved in the sixth month (mid-December to mid-January) as electronic transactions increased by 12.12 percent. The monthly digit payments reached an all-time high of Rs 6,227.648 billion in the last month of FY 2021/22. However, electronic transactions have been on a decline every month in this fiscal year till mid-December. Electronic Payment Transactions (First Six Months)

Month	FY 2021/22	FY 2022/23
Shrawan	Rs 3612.083 billion	Rs 5688.626 billion
Bhadra	Rs 3920.982 billion	Rs 4926.715 billion
Ashoj	Rs 4705.105 billion	Rs 4605.317 billion
Kartik	Rs 4931.923 billion	Rs 3946.194 billion
Mangshir	Rs 4845.953 billion	Rs 3697.658 billion
Push	Rs 5141.668 billion	Rs 4145.904 billion
Total	Rs 27157.714 billion	Rs 27010.414 billion

Source: Nepal Rastra Bank   

Binaya Jung Basnet, founder of Action for Social Change, an organization that performs the last rites of unclaimed dead bodies among other social works, says he has incinerated 719 bodies at the crematorium at Pashupatinath Temple in the past 10 years of working in this field. Most of the corpses didn’t have any identification on them, and the ones that did had no known relatives to claim the bodies. According to Nepal Police, in the fiscal year 2021/22, there were a total of 377 unclaimed bodies, out of which only 29 were identified. Similarly, for the first four months of the fiscal year 2022/23, there were a total of 139 unclaimed bodies, out of which only 14 were identified. Most of the bodies found were of men. “Majority of the bodies found are those of the people living on the streets,” says Poshraj Pokharel, spokesperson, Nepal Police. Since every district has a hospital responsible for the post-mortem, the bodies are sent to those particular hospitals to begin the process of identification. “But rarely is there a case when we are able to identify the dead right away,” he adds. The reason behind not finding the identity of these individuals is because most of them have been living on the streets for a long time, and don’t have any known relatives in that area. “We sometimes find generic information like their first name, which is not enough for us to determine their identities,” says Pokharel. Basnet adds that there are some cases when people migrate to another district, with no one searching for them either, so the identification becomes difficult. “Some are also found to be mentally unstable, which is why no one knows who they are and where they have come from,” he says. Still, there are a few protocols that Nepal Police follows in order to identify and find some relatives of the dead, with the assistance of the Department of Forensic Medicine, in the district where the body was found. Once the body is sent for post-mortem, the forensic department first identifies the cause of death, while the police circulates images of the body within its department to check if they have been listed as one of the missing persons in the past. “In most cases, there is no registration,” says Pokharel. The forensic department keeps a record of the body’s estimated age, sex, height, birthmarks or any other distinct feature that might make the identification easier. They take photographs of the body, clothes, and other personal belongings, as well as a sample of their teeth or a bone in case someone is looking to get the DNA tested. All this is done following the Unidentified and Unclaimed Bodies Management Guideline, 2021, issued by the government. The guideline also has a protocol where some of these bodies can be sent to medical colleges for the purpose of studying and examination, if they haven’t been claimed within the timeframe issued on it. According to Dr Govinda Kumar Chaudhary, the head of department for the Department of Forensic Medicine, Tribhuvan University Teaching Hospital (TUTH), every year, around 30-40 bodies are sent to various medical colleges around Nepal, that too only from the forensic department at TUTH. Chaudhary further mentions that the main causes of death found so far are pneumonia and liver failure. “Most people we have encountered have died because of cold weather, or alcoholism, and are above the age of 50,” he says. The number of deaths is comparatively higher during the winter season. The dead bodies are kept in the morgue for 35 days to three months, before they are sent out for incineration at the Pashupati Electric Crematorium. Although Chaudhary believes there aren’t as many unclaimed bodies these days as before, there is still a problem of not having enough space at the morgue to store the dead bodies, especially outside the valley. Currently, TUTH is the only hospital that can accommodate up to 150 corpses at a time. The number is quite less for other forensic departments outside Kathmandu. Dr Srijana Kunwar, associate professor at Department of Forensic Medicine, Patan Hospital, mentions that they can accommodate only 10 bodies. The government, however, has decided to allocate more budget in order to expand the space. Because of this issue, the unclaimed bodies need to get cremated as quickly as possible. For the ones found in other districts, Pokharel mentions that the bodies can only be kept at the morgue for around 7-10 days, in order to make space for the new ones that arrive. “This is a huge problem since most bodies get cremated before they are identified,” adds Basnet. There are some rare instances where the individuals are identified, but don’t have any known relatives to claim their bodies. Basnet mentions that, in several cases, families have abandoned their loved ones after their demise at the hospital, since they don’t have money to pay for the funeral. “They end up spending all their money in treatment, and performing the last rites at the Pashupati Aryaghat costs around Rs 18,000 which they cannot afford,” he adds. People who pass away during medical treatment or from a natural cause aren’t sent for post-mortem. They are taken to the Pashupati Electric Crematorium either by the Nepal Police or Basnet and his team. Besides the ones handed over to Basnet, the Nepal Police is in charge of the incineration. Before the establishment of Pashupati Electric Crematorium in 2016, the bodies used to be cremated at the Aryaghat in Pashupati, which Rewati Raman Adhikari, spokesperson, Pashupati Area Development Fund, says wasn’t a feasible solution. “Factoring in the cost, the pollution it creates, and the number of bodies that arrive each day, electrical incineration is definitely the more viable option,” he adds. The crematorium has three incineration chambers, out of which only one is currently functional, and the rest are under maintenance. The crematorium charges Rs 4,000 per incineration, and the Nepal government has assigned a budget in order to pay for each cremation. “I pay for the ones I incinerate, whereas Nepal Police depends on that budget,” adds Basnet. Although the process of cremation is going smoothly, Adhikari mentions that there are days where the number of bodies arriving at Pashupati is above 20, in which case cremation becomes difficult. “It mostly happens during accidents with a large number of casualties, and the hospitals need to clear out their cold rooms,” he says. “In that case, the crematorium is compelled to incinerate two bodies at once.” The problem, Basnet believes, behind the unclaimed and unidentified bodies starts with the increasing number of people living on the streets. “As I also work on rehabilitating these individuals, I know for a fact that establishing a proper shelter for these homeless individuals is the only way of decreasing the number of unclaimed bodies in Nepal,” he adds. Pokharel adds that Nepal Police, along with government authorities are doing their best to tackle this problem, and claims that the number of unclaimed bodies have been slowly decreasing in the past years. “It will definitely take some time, but I’m hopeful that this issue will soon have a proper solution,” he says.

There is a village in Nepal called ‘Lukeko Gaun’,  which means a hidden village. I was curious about the origins of its name, who chose it, and why it was selected. These questions crossed my mind when we arrived at a crossroads just after Lele in Lalitpur. The road to the right led to the Pathibhara Temple, while the left went to Gotikhel. Several signboards showed different destinations and estimated distances: Lukeko Gaun (25 km), Pathibhara Temple, Simba Waterfall (27 km), and Gotikhel (31 km). Although I was born and raised in Gauradaha of Jhapa, it took me a few years to visit the Pathibhara Temple in Taplejung. I visited the Pathibhara Temple in Lalitpur with my partner a few months ago.  This time, my son Anchit and I were on our way to Baitarni Dham in Gotikhel. Anchit wanted to visit Simba Waterfall, as he has recently been drawn to village life, despite growing up in the city. During the shooting of the Nepali movie ‘Premganj’, where he played the protagonist's friend, he spent about a month in Kattike Deurali in Kavre and became attracted to the waterfall. On the other hand, I was more intrigued by the village, perhaps due to its enigmatic name. Anchit, who is currently in high school, wanted to explore rural areas during his extended holiday, and I decided to accompany him. Of the so many options available from Lele, we decided to make our way to Gotikhel, driven in part by our emotional attachment to the village. Hari Kaphle, a close friend of mine from the high school years through graduation, taught in this village. Unfortunately, he broke his leg in a bus accident a few years ago. When we reached Chapagaun, where he now serves as a headmaster of a local school, I was able to meet up with him. He gave us a tour of his school and introduced us to some of his friends. Witnessing firsthand the incredible work he is doing to produce a skilled workforce for the country, I have a great deal of admiration for him.  If we visited the Simba Waterfall first, we would not make it to Gotikhel. Additionally, we did not have enough time to visit the famous Kaleshwar Temple. Therefore, we decided to proceed straight towards the hidden village. According to Google Maps, it was a 55 km journey from our home in Gatthaghar, Bhaktapur, with a road full of ups and downs. However, Anchit, the novice driver, navigated it with ease. Finally, we arrived in Gotikhel. Despite being so close to Kathmandu, the surrounding areas resembled remote villages in Karnali. The hidden village was just another three kilometers away from here. Just before reaching Lukeko Gaun, I asked an elderly local about the reason behind the name "hidden village." He explained that it was because the village is situated in a narrow valley surrounded by hills. However, upon reaching the village, we discovered its true name—Katban Besi. When I asked Gitamaya Ghimire, a 70-year-old resident, about the name of the village, she confirmed that it was indeed Katban Besi and expressed her confusion over why it had been called a hidden village. The elders we met in the village were uncertain about whether life there was easy or hard. According to Gitamaya, "It must be hard; even we elderly have to work. We haven't experienced the comfort of city life. We have to travel to the city for medical treatment if someone gets sick." Khil Prasad Ghimire (73) expressed his dissatisfaction with the lack of development in the village, and as a former chairperson of his ward in the 1990s, he blamed the performance of people's representatives, including former lawmaker Nawaraj Silwal and the incumbent Udaya Shamsher Rana. During conversation with local elders, the reason behind the village's name became clear. Despite its potential for tourism development and its natural beauty, the village lacks the necessary infrastructure and facilities. Anchit, who has visited countries like Belarus and Australia and explored various villages through YouTube, compared this village with villages in other countries, such as Switzerland, which offer all necessary amenities. As I compared this hidden village with other remote villages in Dolpa, Humla, and Jumla, I realized that geographical difficulties cannot be an excuse for the lack of development. Countries like China have successfully attracted millions of tourists to their villages by providing necessary infrastructure and facilities. It is clear that our country lacks a vision and commitment to develop and promote tourism in rural areas. Lukeko Gaun: A Dream Project We spoke with a young man named Gopal (Bhawani) Aryal, who had recently returned to the village after spending 16 years in the city. As someone involved in community theater, Aryal had traveled to a remote African village in 2015 as part of the Dragon Dreaming Project, an artistic approach to project design. He stayed in a deserted house on the shores of the Atlantic Ocean for seven days and experienced the closeness of being with isolated nature. Aryal expressed his vision for an art village in the mountains and forests, where residential workshops could be held. He mentioned that although Nepal may not have a sea, it has an abundance of mountains and forests that could serve as a stunning backdrop for such a village. This vision was shared by all others in the team, who were mostly Europeans. While registering his venture, he was denied the name 'Lukeko Gaun Pvt Ltd'. As a result, he had to settle for 'Lukeko Gaun Arts and Farming Pvt Ltd'. He wants to link the village life, culture, tradition, and nature with the global village; he wants to heal the underprivileged people of the area. He and other helping hands are working to make this happen. There are three ways to reach Lukeko Gaun. The first is from Lele via Dalchowki, Shanku, Bhakari Danda, and Bhukhel. The second is the old trail from Lele via Nallu, Bhardeu, Chaughare, and Kataban Bhanjyang. The third one is a new track from Lele which goes along Nallu Khola to Chaughare, Thosne Khola, and Unyu Chaur. Article 26 (13) of the Constitution of Nepal, 1990, states that the State shall pursue a policy of creating conditions for accelerating rural development, keeping in view the welfare of the majority of the rural population. But people in this part of Lalitpur have yet to experience the fruits of development, though 32 years have passed since the promulgation of that charter. For the state, blacktopping the Lele-Gotikhel road is not a huge undertaking. But the state doesn't feel it is necessary. As for the locals, they neither have access to the corridors of power nor the technology and the resources to blacktop the road.