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Signing a bilateral power trade agreement (PTA), attracting investments from Bangladesh in the energy sector, and developing dedicated transmission infrastructure will be Nepal's agenda when energy secretaries from Nepal and Bangladesh meet in May. The fifth meeting of the Nepal Bangladesh Energy Secretary Level Joint Steering Committee (JSC) will be held in the second week of May in Dhaka. The fourth meeting was held in Kathmandu on August 8-9, 2022. After seven months, the fifth meeting is taking place on May 10-11, 2023 in Bangladesh. A senior official of the Ministry of Energy, Water Resources and Irrigation said that the fifth JSC meeting will focus on three agendas. The meeting will be centered around the bilateral power trade agreement (PTA), investments, and dedicated transmission infrastructures. In August 2018, Nepal and Bangladesh signed a memorandum of understanding (MoU) on cooperation in the energy sector. The agreement also facilitated the creation of a Joint Working Group (JWG) and a Joint Steering Committee (JSC). It's been one year since talks for electricity exports from Nepal to Bangladesh gained momentum. Nepal's quest for finding a market for its electricity beyond India was further emboldened after Bangladesh expressed readiness to import 40-50 MW of power from Nepal during the energy secretary-level JSC meeting of the two countries held in Kathmandu in the last week of August. With India giving its nod for power exports from Nepal to Bangladesh in the recently concluded Nepal-India Energy Secretary Talk, the Nepal Electricity Authority (NEA) has initiated the process. NEA has planned to export electricity from the Likhu-4 Hydropower Project to Bangladesh and sent the proposal to India for approval. With no bilateral agreement for power trade between Nepal and Bangladesh, the energy ministry officials said the proposal of PTA will be proposed in the upcoming meeting. "We are planning to export 40-50 MW of electricity to Bangladesh in the upcoming season but both countries are yet to sign a PTA," said the official, "That's why we will propose signing PTA in the next meeting." Once the PTA is signed, there will be a power purchase and sales agreement between NEA and the Bangladesh Power Development Board which will enable Nepal to export power to Bangladesh. With Bangladesh keen on importing electricity from Nepal as well as developing hydropower projects in Nepal on a joint-venture model, Nepali officials will also discuss the potential Bangladeshi investments in the energy sector in Nepal. Bangladesh has already said that it would invest in the 683MW Sunkosi-3 Hydropower Project. Both sides had agreed to form a joint-venture company to develop the hydroelectric project. Energy ministry officials said the construction of a dedicated cross-border transmission line between Nepal and Bangladesh will also feature in the meeting. They said while Nepal will use the Indian transmission infrastructure to export power to Bangladesh for now, a dedicated transmission line will be required for the longer run. After the last JSC meeting in August 2022, Nepal and Bangladesh also agreed to take initiatives to reach a tripartite agreement between Nepal, Bangladesh and India to set up a dedicated transmission line between Nepal and Bangladesh using the Indian territory.

The price of gold has increased by Rs 1, 200 per tola in the domestic market on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 109, 000 per tola today. The gold was traded at Rs 107, 800 per tola on Wednesday. Meanwhile, tejabi gold is being traded at Rs 108, 500 per tola. It was traded at Rs 107, 300 per tola. Similarly, the price of silver has increased by Rs 25 and is being traded at Rs 1,260 per tola today.

The Nepal Stock Exchange (NEPSE) plunged by 15. 76 points to close at 1,933.29 points on Wednesday. Similarly, the sensitive index dropped by 2. 30 points to close at 363. 91 points. A total of 3,777,400 unit shares of 266 companies were traded for Rs 1. 33 billion. Meanwhile, Maya Khola Hydropower Company Limited was the top gainer today with its price surging by 9. 98 percent. Likewise, Bottler Nepal (Terai) Limited was the top loser with its price dropped by 7. 62 percent. At the end of the day, the total market capitalization stood at Rs 2. 79 trillion.

Provincial and local governments will receive a lower budget in fiscal equalization grants from the federal government in the next fiscal year 2023/24. Given the central government’s reduced budget allocation and spending capacity in the wake of a drastic decline in revenue collection in this fiscal year, the National Natural Resources and Fiscal Commission has recommended the federal government to downsize fiscal equalization grants in the next fiscal year than the amounts transferred in the current fiscal year 2022/23. According to the commission’s recommendation, provincial and local governments should be provided as much as Rs 146bn under the fiscal equalization grant, a drop of Rs 15.64bn from Rs 161.66bn in FY 2022/23. Of the total amount recommended for fiscal transfer, Rs 58.66bn is for the provincial governments and Rs 37.35bn is for the 753 local governments. The federal government provides grants to the sub-national governments under four headings of fiscal equalization grant, conditional grant, supplementary grant, and special grant. Of them, the fiscal equalization grant is provided to implement the provincial and local governments’ budgetary programs. Conditional grants are provided to pay the liabilities of the central government or to implement its programs. “The commission reduced the fiscal equalization grant to be provided to the provincial and local government because of downsized resources forecast for the next fiscal year by the Resource Estimation Committee,” said a senior official of the commission. The committee is headed by the vice-chairperson of the National Planning Commission. “We recommended the amount to be transferred to the sub-national government under fiscal equalization grant after the Resource Estimation Committee estimated the potential resources and spending limit,” the official said. The National Resource Estimate Committee has estimated the resources availability of Rs 1,688bn for FY 2023/24 including from the government’s revenue, internal loans, external loans, and external grants. The projected resource availability is far less than the total budget size of the current fiscal year at Rs 1,793.83bn. The budget size was trimmed to Rs 1,549.83bn through the mid-term review of the current fiscal year. The committee has estimated the federal government’s revenue to grow by an average of 14 percent in the next three fiscal years. “With the resource estimation committee not making a bold resource prediction, we also had to recommend the allocation of a fiscal equalization grant to provincial and the local governments,” said the commission official. A conservative projection of resource availability was made as the country’s economy is in a downturn contributing to sluggish revenue collection. With the economy slowing down amid reduced market demands for goods and services, both import-based revenue and inland revenue have gone down this fiscal year. According to the Financial Comptroller General Office, the revenue collection as of March 19 of the current fiscal year stood at Rs 591bn, a sharp drop from Rs 691bn during the same period last fiscal year. According to the Department of Customs (DoC), the customs offices across the country collected Rs 250bn as of March 14 against the target of Rs 433bn which accounts for around 58 percent of the target. “The impact of the policy reversal on import control has not been reflected in the customs revenue,” said a senior DoC official.  The country receives nearly half of its revenue through taxing imported goods. Import taxes on vehicles fall among the largest sources of revenue. But even after the government lifted the import ban, the automobile dealers have not rushed to import the vehicles.  The automobile dealers have not yet cleared around 2800 four-wheelers parked at the customs yards, according to the customs officials. These vehicles were imported in recent months based on a letter of credit opened before the government imposed a ban on the import of vehicles along with foreign alcohol and expensive mobile sets among others in April last year. The inland revenue collection has also remained sluggish. According to the Inland Revenue Department (IRD),  the revenue collection as of March 14 this fiscal year stood at 79.68 percent of the target. The government collected Rs 281.99bn as of May 14 against the target of Rs 353.91bn. The collection is poorer than the total inland revenue collection during the same period last fiscal year 2021/22. According to IRD, it had collected as much as Rs 284.88bn during the same period last fiscal year. Meanwhile, the commission has also set the standards for providing conditional grants to provincial and local governments. “The federal government will itself decide on the conditional grant based on the standards we set,” the commission official said.