Author: space4knews

The arrival of the first commercial cargo train from Kolkata, India, to Biratnagar has sparked a wave of enthusiasm among industrialists and entrepreneurs in the Morang-Sunsari corridor. Industry leaders express confidence that the cargo train service will reduce transportation costs by up to 40 percent and eliminate the hassles associated with road transport. Initiated after the removal of policy complexities, this service is expected to facilitate the import of raw materials from third countries more smoothly and help make Nepali products more competitive. (5 Shrawan, Biratnagar)

The cargo train that departed from Kolkata on Friday arrived in Biratnagar by Monday afternoon. Under the Nepal-India Transit Agreement, it is the first time that a cargo train carrying imported raw materials from a third country has directly reached Biratnagar from Kolkata, which has excited the private sector. Operating as a regular service for the first time, this train delivered raw materials to ‘Swastik Oil Industries,’ located in the Morang-Sunsari industrial corridor. Entrepreneurs who previously paid high costs transporting goods via road claim that the cargo train will reduce transportation expenses by up to 40 percent and lower risks.

Rajendra Raut, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Koshi Province, described the arrival of the cargo train in Biratnagar as a significant achievement for the private sector and noted that the service has invigorated the business community. “The cargo train service has fulfilled long-standing private sector demands and boosted industrialists’ morale,” he said. “It will also resolve problems associated with road transport.” He explained that delays, theft, and accident risks during road imports have previously hindered businesses, but cargo train transport will enable industries in eastern Nepal to compete effectively in the market. He added that consumers will also benefit from this development.

The Ministry of Agriculture, Forestry and Environment has decided to remove Senior Veterinarian Dr. Naveen Upadhyay Ghimire from civil service. Following advice from the Public Service Commission, he has been dismissed under Section 59, Subsection (b) of the Civil Service Act 2049. Similarly, the ministry has initiated departmental disciplinary actions against 14 additional employees involved in similar cases. (5th Shrawan, Kathmandu)

The Ministry of Agriculture, Forestry and Environment completed the departmental disciplinary procedure against Dr. Naveen Upadhyay Ghimire of the Department of Animal Services and decided to remove him from civil service. According to the ministry, following the provisions of the Civil Service Act 2049, the disciplinary procedures were finalized and previous advice was obtained from the Public Service Commission. Based on this advice, the ministry issued the departmental penalty under Section 59, Subsection (b) of the Civil Service Act 2049, which bars Dr. Ghimire from future government service eligibility.

The ministry has stated that the necessary departmental disciplinary actions will be completed against the concerned employees and that the Public Service Commission will be duly informed. According to ministry sources, disciplinary procedures are underway against 14 more employees involved in similar matters, with decisions pending after completing the relevant legal processes.

Summary: Prime Minister Balendra Shah announced the removal of a 3 percent equality fee imposed on the education and health sectors. Although he claimed to have consulted the Finance Minister, the Prime Minister made the announcement via social media without following the formal economic act procedures or obtaining a formal cabinet decision. Following intense public opposition, the government decided to withdraw the tax, and discussions are now underway to amend the VAT imposed on electricity as well.

5th Shrawan, Kathmandu – Until Tuesday morning, Finance Minister Swarnim Wagle was debating in favor of the 3 percent equality fee levied on education and health sectors. However, by afternoon, Prime Minister Balendra Shah suddenly posted on Facebook and X, declaring the fee removed. Although the Prime Minister mentioned consulting the Finance Minister prior to this decision, the abrupt implementation indicates that the taxes were repealed in violation of legal procedures.

This suggests that while the Prime Minister claimed to have consulted Finance Minister Wagle, the decision to reduce taxes was announced independently. There were reports of disagreements between the Prime Minister and Finance Minister regarding some budget policies. Since the budget presentation on 15th Jestha, the Finance Minister had defended the education, health, and electricity taxes for over a month and a half. With the Prime Minister suddenly removing two major taxes, it seems there was dissatisfaction with the Finance Minister.

Moreover, although the Prime Minister announced the removal on social media, the taxes have not been legally repealed as of yet. According to the Economic Act, taxes cannot be abolished simply via a Facebook post; a formal cabinet decision is required. The Ministry of Finance must submit a proposal to the cabinet when ministers are involved. According to two senior government sources, neither of these steps have been undertaken. “So far, the cabinet has not made any decision to reduce, withdraw, or exempt taxes,” said a senior government official.

If Finance Minister Wagle had agreed with this decision, the announcement could only have been made after the ministry presented a proposal and the cabinet approved it. Given the sensitivity of tax rates, it is customary not to publicize decisions prior to formal approval. However, without any initiative from the Ministry of Finance and without cabinet approval, the Prime Minister repeatedly announced via social media, which signals his dissatisfaction with the most senior minister.

On the other hand, there has been no apparent response from the Finance Minister following the Prime Minister’s announcement. While it is possible the decision might not be implemented, the Prime Minister has the authority to make decisions within the legal and constitutional framework in the prime ministerial system. He could also present proposals to the cabinet and decide accordingly.

As the Prime Minister stated on Facebook, the additional 3 percent tax imposed on private education and health services increased the burden on citizens, sparking public opposition. Economists also opposed these taxes. Senior economist Dr. Dilliraj Khanal expressed that by increasing tax compliance and offering tax relief, greater revenue could be generated, and taxing education, health, and electricity was inappropriate. Public opposition emerged, given that service fees paid by patients were included within the tax framework. Many argued it was wrong to tax educational expenses in a context where one in five students attends private schools. Dr. Khanal said, “The Prime Minister’s decision to revoke the tax as per public expectation was appropriate, and I welcome it.”

Although the budget presented to Parliament on 15th Jestha included provisions for the education and health equality fee, implementation only started on 1st Shrawan. Upon the onset of protests, the Prime Minister decided to withdraw the tax. He stated, “This government is a people-centric government based on public trust and expectations, so the protested tax was withdrawn.”

The purpose of the tax was to provide quality education and health services to citizens in remote areas, support Dalit, marginalized, and impoverished children, and expand health insurance coverage. It also aimed to establish a structured economy by broadening the tax base. However, following public opposition, the government has taken the matter seriously and is committed to moving forward while listening to citizen demands, the Prime Minister stated on social media.

But why was this decision, purportedly in response to public expectations, abruptly made without following proper procedures? What is the legally required process for repealing taxes and modifying rates established by the economic bill passed by Parliament?

Worldwide, tax rates are considered a government prerogative. Governments can modify tax rates approved by Parliament, but must follow legally established procedures to inform Parliament. Under Section 18 of the Economic Act in Nepal, the cabinet may reduce, increase, or exempt taxes, but only after receiving a proposal from the Ministry of Finance. The cabinet then makes its decision based on the proposal.

However, regarding the repeal of the education and health equality fee, sources confirm that no proposal has been submitted, nor has any cabinet decision been made. Any change to tax rates or exemptions must then be presented to the federal Parliament, and information published in the Nepal Gazette.

According to Section 5 of the Economic Bill, any details of reduced, increased, or exempted tax rates must be submitted annually by the Ministry of Finance to the federal Parliament. Section 6 mandates publication in the Nepal Gazette.

Changes to the VAT imposed on electricity are also under consideration. Like the education and health equality fee, there has been strong opposition against the 5 and 13 percent VAT on electricity. Finance Minister Wagle imposed VAT on electricity used by both rich and poor after granting a 10 percent income tax exemption to the highest income group. Due to rising opposition, discussions are ongoing between the Ministry of Finance and the Inland Revenue Department regarding VAT modification.

According to ministry sources, “Currently, electricity consumption below 50 units is exempt from VAT. Discussions are underway to increase this exemption to 150 units or remove VAT entirely, but no decision has been reached yet.”

The provincial governments have proposed the ‘Three S’ concept—Coordination, Coexistence, and Cooperation—to the federal government to implement policies ensuring coordination among the federal, provincial, and local levels in the management of energy and water resources. A bill has been introduced that classifies rivers scientifically according to the Strahler order system and clearly delineates jurisdiction among the three tiers of government. Meanwhile, the Ministry of Energy is preparing to present legislation in Parliament to mandate energy efficiency labeling on electrical appliances and address water resource management. (5th Shrawan, Kathmandu)

The proposal was presented today at a meeting of the Subject Committee attended by energy ministers and energy secretaries from all seven provinces, focusing on the utilization, operation, and management of energy and water resources. During the meeting, the Ministry reviewed and discussed with the provincial governments two bills: the “Bill on Amendment and Consolidation of Existing Water Resource Laws” and the “Bill on Renewable Energy and Energy Efficiency.”

Provincial ministers and secretaries expressed concerns that the roles, rights, responsibilities, and management functions of provincial governments were not clearly defined in the bills. They emphasized the necessity for real implementation of coordination, coexistence, and cooperation among the federal, provincial, and local levels. Maheshwar Shrestha, Joint Secretary of the Ministry of Energy, stated that the provinces raised the issue of overlapping authority and urged its removal.

“Currently, the same river or area is managed simultaneously by federal, provincial, and local governments without proper coordination,” he said. “The provinces’ main concern is that the ‘Three S’ concept—coordination, coexistence, and cooperation—has not been effectively implemented in practice.” The ministry has committed to facilitating effective coordination, cooperation, and coexistence among the three government tiers. Suggestions from provincial and local governments will be incorporated into both the water resources and renewable energy bills.

Summary: In the absence of Finance Minister Dr. Swarnim Wagle, Prime Minister Balendra Shah has directly engaged in discussions with representatives from the private sector and securities stakeholders. There appears to be policy disagreements between Prime Minister Shah and Finance Minister Wagle regarding budget matters and the modality of government-run industries. Due to power struggles and clashes in working styles within the Rastriya Swatantra Party (Raswapa), the Prime Minister’s Office has been conducting parallel activities within the Finance Ministry’s domain. Kathmandu, 5 Shrawan.

Prime Minister Balendra Shah has been holding continuous discussions with representatives from various private sector organizations over the past few weeks. While these representatives meet the Prime Minister at his office, they often seek the presence of Finance Minister Dr. Swarnim Wagle, who, however, has not attended any of these meetings. “Though the responsibility to implement any commitments made by the Prime Minister lies with the Ministry of Finance, the absence of the Finance Minister in these meetings was noticeably felt,” said a businessman who participated in one of the sessions. “Nevertheless, we are encouraged by assurances from the highest level of government that our issues will be addressed.”

Prime Minister Balendra Shah’s separate meetings with leaders ranging from the President of the Federation of Nepalese Chambers of Commerce and Industry to CEOs of banks, without the Finance Minister’s presence, have been notable to private sector representatives. For instance, on Monday, the Prime Minister met directly with stakeholders in the securities sector. Finance Minister Wagle was also absent from this meeting. Instead, the Prime Minister summoned Dr. Gopal Bhatt, Chairperson of the Nepal Securities Board, and Amrit Lamsal, Chairperson of the Nepal Stock Exchange and Joint Secretary at the Ministry of Finance. The Prime Minister discussed investors’ feedback and questions with Bhatt and Lamsal during the session.

While Prime Minister Balendra Shah — who is a senior government minister and holds the Rastriya Swatantra Party chairmanship with Finance Minister Wagle ranked below as vice-chair — has been handling economic matters independently, the Finance Minister has been effectively sidelined. According to a government official, this approach indicates not only the Prime Minister’s lack of confidence in the Finance Minister but also reflects the ongoing power struggle within the Raswapa party. As the Prime Minister’s Office has begun conducting activities parallel to those of the Finance Ministry, Dr. Wagle has reportedly grown frustrated with the Prime Minister, according to sources close to him.

Indian Congress leaders Rahul Gandhi, Priyanka Gandhi, and Akhilesh Yadav have been detained by Delhi Police while protesting to demand the resignation of Education Minister Dharmendra Pradhan. The leaders were holding a sit-in protest in front of the Prime Minister’s residence when they were taken into custody and brought to the Parliament Street Police Station. The situation around the area has become tense. July 20, Kathmandu.

As the Kachrouch Janata Party held a protest at Jantar Mantar against Education Minister Dharmendra Pradhan, Rahul Gandhi, a leader of India’s main opposition party, the Congress, was arrested during a sit-in demonstration near the Prime Minister’s residence. On Tuesday afternoon, Congress MPs under Rahul Gandhi’s leadership began their protest outside the Prime Minister’s residence on Lok Kalyan Marg. Their primary demand was for Prime Minister Narendra Modi and Education Minister Dharmendra Pradhan to resign.

Rahul Gandhi, the Leader of the Opposition in the Lok Sabha, Congress leader Priyanka Gandhi, and Samajwadi Party president Akhilesh Yadav were taken into custody by Delhi Police and brought to the Parliament Street police station. Prior to the detention, Union Minister Jitendra Singh visited the protest site near the Prime Minister’s residence and met with Rahul Gandhi and other Congress leaders. Following the meeting, Singh posted a lengthy statement on X (formerly Twitter) regarding the matter. Singh claimed that Rahul Gandhi, the opposition leader, had promised to retract some of his statements. The Congress had also demanded that Prime Minister Narendra Modi come out of his residence to respond to the protesters. Tensions remain high at the demonstration site on Lok Kalyan Marg.

The 14th Higher Command and Management Training conducted at the Nepali Military War College concluded on Tuesday in the presence of Chief of Army Staff General Ashok Raj Shigdel. Among 35 General-ranked participants, General Prashant Vajracharya was declared the best student officer. This high-level training program, initiated in 2014 (2071 BS), has so far commissioned 410 officers in the Nepali Army.

5th Shrawan, Kathmandu – The Higher Command and Management Training, which began on 29th Chaitra at the Nepali Military War College, successfully concluded today, Tuesday, in the presence of Chief of Army Staff General Ashok Raj Shigdel. The training involved 35 General-ranked officers as participants.

At the closing ceremony, the training chief instructor, Lieutenant Colonel Madhukar Singh Karki, delivered the welcome speech. General Prashant Vajracharya was honored as the best student officer, while General Prakash Thapa received the Best Research Paper Award.

The Higher Command training is the highest-level program conducted within the Nepali Army, having been established since 2014 (2071 BS). To date, 410 officers have been commissioned through this prestigious training.