India Sneezes, Nepal Catches Cold: Impact of Demonetization of the Indian Currency
India has decided to withdraw high-denomination banknotes in its biggest crackdown against corruption and unaccounted money or \"black money\". Indian Prime Minister Narendra Modi, in an unscheduled address to the nation, announced that all INR 500 and INR 1000 notes would cease to be legal tender with effect from November 9, 2016. People will be able to exchange their banned notes at banks between November 10 and December 30, 2016. New INR 500 and INR 2000 denomination notes will be issued to replace the ones which are withdrawn from the economy. Read more
Declining Remittance and its Impact on the Economy
Nepal is one of the highest remittance recipients in the world with remittance comprising up to 29% of Nepal\'s GDP in FY 2015/16 and remittance inflows worth USD 6.2 billion in FY 2015/16 alone. Remittance has been catalytic to Nepal\'s economic and social landscape over the past few decades and plays a pivotal role in the Nepali economy. Read more
Holiday Obsession in a Rent-Seeking Culture
Nepal is a rent-seeking society; the recent announcement of holiday on November 2 by the Nepali Government on the occasion of the Indian President, Pranab Mukherjee, visiting the country is perhaps the strongest testimony to it. What’s more? The government plans to announce one more public holiday when the Chinese President Xi Jinping visits Nepal. Read more
Can Minimum Support Price be the Answer to Our Country’s Agricultural Woes?
Despite being primarily an agricultural country, Nepal’s state of agriculture is dismal. Although almost 70% of the total labor force is engaged in the farming and forestry sector, the share of agriculture to GDP is a mere 33%. Food deficit is a recurring phenomenon as Nepal struggles to produce enough food to meet the growing demand of its citizens. Moreover, according to the Ministry of Finance (MoF), agricultural trade of the country is also in deficit and the deficit has been surging in recent years, leaving millions of people more food insecure than ever. In fact, once a net-exporter of paddy, Nepal now imports the staple crop with a staggering NPR 13 billion worth of paddy imported from India in the first ten months of FY 2015/16. Read more
Financial Inclusion a Policy Priority for Nepal
Financial inclusiveness is understood as providing and ensuring reliable and affordable financial services to all segments of society. Although access to finance is necessary for all members of society, it is particularly more important for disadvantaged and low income groups, as it provides opportunities for them to save and invest, and protect themselves from various risks such as natural disasters, illness, and loss of livelihoods. Read more
Making Access Possible
Financial inclusion has been identified as a priority by many governments around the world, and internationally as the core of the Sustainable Development Goals (SDGs); as appropriate financial services can help improve household welfare and spur small enterprise activity. Financial inclusion is seen as a major contributor to the achievement of a number of SDGs. Macroeconomic evidence shows that economies with deeper financial intermediation tend to grow faster and reduce income inequality. At a national level financial inclusion complements critical national policies, notably on poverty eradication, reducing inequality, job creation and growth, as well as supporting education and health objectives. Read more